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AGL to shut power plant due to costly gas, oversupply


Source: AFR, 10 Dec 2014

Rising east coast gas prices and a soft wholesale electricity market will trigger the shutdown of the older part of AGL Energy’s gas-fired power plant in South Australia, confirming gas is being priced out as a fuel in the power sector.

AGL will shut four older units at its Torrens Island gas-fired power plant in 2017. The units, known as the “A station”, comprise about 480 megawatts and were already shuttered between July and September this year, with no effect on customer supply, AGL said.

A downturn in electricity demand, combined with the start-up of new wind farms and a surge in the popularity of solar panels, has resulted in an oversupply of generating capacity, depressing wholesale power prices.

Energy sector experts predict the trend will continue where old-style cheaper power plants burning coal are better positioned than gas-fired plants, purely on the basis of economics.

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