Move comes as EnergyAustralia speeds up a push towards cleaner energy and as experts say Australia's coal-fired power plants will become increasingly financially strapped
By Sonali Paul
MELBOURNE, March 10 (Reuters) - Australia's third largest power retailer EnergyAustralia said on Wednesday it will shut its ageing Yallourn coal-fired power station in 2028, four years earlier than previously flagged, stoking concern about electricity supply and price increases.
The move comes as EnergyAustralia speeds up a push towards cleaner energy and as experts say Australia's coal-fired power plants, which generate around 55% of the country's electricity, will become increasingly financially strapped due to an influx of wind and solar farms which have driven down power prices.
"The energy market transition is real, and it's happening fast. It's fair to say it's happening faster than most people forecast," EnergyAustralia Managing Director Catherine Tanna told reporters.
EnergyAustralia, a unit of Hong Kong's CLP Holdings, will shut the 1,480-megawatt (MW) Yallourn power station by mid-2028. The 100-year-old plant is the oldest power station in Victoria state and supplies about one-fifth of its electricity.
The company also plans to build a 350 MW battery with four hours of capacity, which would be bigger than any battery operating in the world today, at its Jeeralang site in Victoria by 2026 to boost supply of "dispatchable", or steady and flexible power.
The shutdown of Yallourn will cut EnergyAustralia's carbon emissions by 60% from today's level, helping it meet its target to be carbon neutral by 2050, Tanna said.
Ahead of Yallourn's retirement, Australia's top power producer AGL Ltd is set to shut its 2,000-MW Liddell coal-fired power plant in 2023. Both companies have given several years' notice, allowing time for other power sources to be built to help fill the gap.
"While the Commonwealth Government understands this is a commercial decision, the exit of 1,480 MW of reliable energy generation brings with it reliability and affordability concerns," Energy Minister Angus Taylor said in a statement.
He pointed to the sudden closures of two coal-fired plants in South Australia and Victoria in 2016 and 2017 which led to an 85% jump in wholesale power prices.
(Reporting by Sonali Paul; Editing by Leslie Adler and Muralikumar Anantharaman)
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