The owner of the Loy Yang B coal-fired generator in Victoria, Alinta Energy, has announced plans to develop a synchronous condenser and a 500 megawatt battery at the site. Despite these initiatives, the company is not rushing to set an early closure date for the coal generator, which currently operates with an official closure date of 2047. This announcement follows Alinta’s recent agreement to be acquired by Singapore’s Sembcorp in a deal valued at $6.5 billion.
Alinta’s CEO, Jeff Dimery, who will continue in his role post-acquisition, emphasized that the focus is not on hastening coal plant closures but rather on introducing new capacity. In an interview with Renew Economy, Dimery noted, “What’s happening is that previously announced coal closures are being pushed back a little bit.” He described the situation as a “cold, hard reality” that the company faces, given its significant reliance on coal-generated income.
The Loy Yang B facility accounts for approximately one quarter of Alinta’s overall income. Dimery highlighted its role in the company’s expansion from zero to 700,000 customers on the east coast of Australia. He stated that the plant is currently the lowest cost and most reliable generator in Victoria. “It’s underpinning the investments that we can make in this transition,” he explained, referencing the funding of battery developments and onshore wind farms as part of their future strategy.
While Alinta has plans for both the synchronous condenser and the battery, it has not secured a closure deal with the Victorian government. Other coal generators in the Latrobe Valley, such as Yallourn and Loy Yang A, have established agreements regarding their closure timelines. Dimery remarked, “We didn’t need an agreement with the government in South Australia… we just knew when it was time to close,” indicating that Alinta will make similar assessments regarding Loy Yang B.
The energy landscape is evolving, and Dimery recognizes the necessity of maintaining the reliability of Loy Yang B. He stated that the plant is flexible enough to adapt to changing market conditions, operating at reduced output when rooftop solar generation is high. “It will undoubtedly be the last coal-fired power station to close in Victoria,” he asserted.
Alinta is also pursuing funding from the Australian Energy Market Operator (AEMO) to enhance its energy storage capabilities. The Loy Yang battery project aims to add flexibility to the company’s portfolio, aligning with the growing trend in battery storage across the country. Dimery pointed out that the company is actively developing other battery projects, including the delayed Wagerup battery in Western Australia and the Reeves Plains battery in South Australia.
In terms of renewable energy projects, Alinta is nearing financial closure on the 550 MW Marri wind project in Western Australia. Additionally, it is working on the Spinifex offshore wind farm in Victoria and the Ovens Mountain pumped hydro project in New South Wales. Dimery emphasized the importance of these projects in the context of transitioning to renewable energy, stating, “They are bringing the muscle to help us get ahead of the curve in Oz.”
As Alinta navigates its future in a rapidly changing energy sector, the integration of renewable energy sources and battery storage remains a critical focus. The company’s commitment to maintaining its coal assets while expanding its renewable capabilities illustrates the complex dynamics of the energy market in Victoria and beyond.
