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 has an official closure date of 2047. This announcement comes in light of Sembcorp’s recent acquisition of Alinta for $6.5 billion, which is expected to be completed in the New Year.
In an interview following the Sembcorp deal, Jeff Dimery, CEO of Alinta, confirmed the company’s commitment to grid security through the construction of the synchronous condenser. The battery, projected to have a capacity of 500 MW and likely to provide around four hours of storage (approximately 2,000 MWh), aligns with trends seen across Australia’s energy sector. Despite plans for these renewable energy projects, there are no immediate plans to advance the closure of the 1.2 gigawatt brown coal generator located in Victoria’s Latrobe Valley.
While the Victorian government aims for 95 percent renewable energy by 2035, the Loy Yang B facility’s closure remains uncertain. Other brown coal generators in the Latrobe Valley, including Yallourn and Loy Yang A, have reached agreements with the state regarding their closure timelines. In contrast, Alinta has not yet established such arrangements.
“What’s happening is that previously announced coal closures are being pushed back a little bit,” Dimery stated. He emphasized that the company’s focus is on integrating new energy sources rather than hastening coal plant closures. According to Dimery, Loy Yang B accounts for a significant portion of Alinta’s revenue and serves as a cornerstone for future investments in renewable technologies.
Dimery described Loy Yang B as the lowest-cost and most reliable generator in Victoria. He articulated that the current operations are crucial for funding new projects, including battery developments and onshore wind farms set to be announced in the near future. “It’s underpinning the investments that we can make in this transition,” he noted.
Reflecting on the future, Dimery acknowledged that while the official closure date is set for 2047, market conditions will ultimately dictate when Loy Yang B will cease operations. He expressed confidence in the plant’s reliability and its adaptability to incorporate other renewable sources. “It will undoubtedly be the last coal-fired power station to close in Victoria,” he asserted, underscoring the asset’s operational flexibility.
Alinta is also pursuing funding from the Australian Energy Market Operator (AEMO) for the battery project, which aims to enhance the company’s energy portfolio. Dimery indicated that Loy Yang B is capable of adjusting its output based on solar energy availability, showcasing its ability to accommodate fluctuating renewable energy generation.
In addition to the Loy Yang project, Alinta is working on various battery storage initiatives. Among these is the delayed Wagerup battery in Western Australia, projected to serve as a 100 MW and 200 MWh facility. Dimery reported that construction delays have occurred due to contractor issues, but remediation efforts are ongoing, with completion expected by April next year.
Alinta is also advancing the Reeves Plains battery in South Australia, which is set to have a capacity of 250 MW and 1,000 MWh, along with plans for an additional 50 MW battery to meet state requirements.
On the renewable front, Alinta is nearing financial closure on the 550 MW Marri wind project in Western Australia and is developing the Spinifex offshore wind farm in Victoria, along with the Ovens Mountain pumped hydro project in New South Wales. Dimery highlighted that these projects present various challenges but are essential for Alinta’s growth strategy.
As Alinta prepares for the future, it remains focused on collaborations that leverage Sembcorp’s expertise to enhance its position in the Australian market. Dimery concluded that these initiatives are crucial for navigating the evolving energy landscape and maintaining reliable energy supply.
This strategic approach reflects a broader trend in the energy sector, where companies balance the transition to renewables with the ongoing need for reliable energy sources. Alinta’s actions will likely play a pivotal role in shaping Victoria’s energy future amidst a rapidly changing global energy environment.
