An investor lobby group has told AGL Energy Limited (ASX: AGL) to “wake up” and permanently close its Liddell coal-fired power station after a worker was injured this week.
On Thursday, a staffer was seriously injured from an incident with a transformer at the site’s unit 3 generator. The generator was immediately shut.
The company announced to the market on Friday morning that the unit could be down for up to 2.5 months. This would skip over the entire summer, when power demand peaks from air conditioning usage.
The exact outage period is yet to be confirmed as investigations are currently taking place.
The almost half-century-old Liddell site in NSW is due to be closed in 2022 or 2023.
The Australasian Centre for Corporate Responsibility (ACCR) urged the company to bring forward the closure.
“Today’s closure shows that AGL is operating in a high risk environment to its workers, its shareholders and also the reliability of the NSW grid,” said ACCR director Dan Gocher.
“These types of incidents will become commonplace and investors must demand that AGL get serious about de-risking its portfolio.”
AGL has indicated it would inform the ASX by Wednesday about the impact of the closure to its bottom line.
The AGL share price was up 0.92% as of 2.00pm AEDT, trading at $13.23.
It’s expensive to keep coal power plants running
Maintenance costs for ageing coal power plants grew from 25% of AGL’s total capital spend in 2013 to 74% in the 2020 financial year, according to Gocher.
“Investors must question whether this expenditure is in the long-term interests of shareholders,” he said.
“AGL intends to operate Bayswater beyond 50 years, and Loy Yang A beyond 64 years. It’s ridiculous and completely out of step with Australia’s climate goals and it will continue to risk the safety of its workers.”
The Australian Financial Review reported that the closure of the Liddell unit on Thursday caused the wholesale electricity price in NSW to hit the maximum $15,000 per megawatt-hour.
The Australian Energy Market Operator was then forced to call upon its emergency reserve to prevent a blackout in NSW on Thursday afternoon.
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.