Scenarios for the replacement of the Liddell power station

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RepuTex has been engaged by Greenpeace Australia Pacific to analyse the impact of scenarios to replace the Liddell power station on wholesale electricity prices, energy reliability and greenhouse gas (GHG) emissions through financial year ending (FY) 2026.

Specifically, analysis considers the relative impact of the addition of 1,000 MW of gas-fired capacity on the NSW electricity market (prior to the summer of 2023-24) versus the addition of 1,000 MW of zero-emissions dispatchable capacity under the NSW Electricity Infrastructure Roadmap, such as large-scale battery storage and aggregated distributed energy resources (virtual power plants and demand response capacity).

Should 1,000 MW of zero-emissions capacity be added to the NSW system, the addition of very fast charging and generation capacity is forecast to improve reliability in the two year period between the closure of Liddell and the commissioning of the Snowy 2.0 and HumeLink projects. The wider supply-demand balance is projected to translate into lower wholesale electricity prices (relative to our Reference Case), averaging $54/MWh over 2021-26, declining to $35/MWh in 2026.

Comparably, the addition of 1,000 MW of new gas generation is also estimated to reduce wholesale electricity prices, yet not as far as zero emissions dispatchable capacity. Under this scenario, NSW wholesale electricity prices are expected to average $57/MWh over 2021-26, declining to $42/MWh in 2026.

While 1 GW of peaking gas is forecast to be beneficial to the system in terms of extended-duration reliability and lower maximum pricing, the long-term return on investment for new gas plants may ultimately be dependent on the closure of further coal-fired plants before replacement capacity is available.

Comparably, battery capacity is modelled to be faster, more flexible and precise in responding to peak pricing and volatility events.

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