Coal power station retires to fond farewell as massive battery project steps in to take its place

At Gannawarra, a 25MW / 50MWh Tesla battery energy storage system (BESS) is located next to a 50MW solar farm. The project has been operational since 2019 and reports after a year of operation found it to be a success so far. Image: Australian Renewable Energy Agency.

Australian energy retailer EnergyAustralia has said that it will build a 350MW, four-hour standalone battery energy storage system (BESS) project to enable one of its coal-fired power plants to be retired “after decades of faithful service”.

Yallourn coal-fired power station has been in operation in its current state since 1974, although the site, in Victoria, has housed a power station since 1921. The 1,450MW facility is fuelled by Australia's largest open cut mine, which is on an adjacent site, burns 18 million tonnes of brown coal annually and generates enough power to meet around 22% of the state of Victoria’s electricity demand and around 8% of the Australian National Electricity Market’s demand. 

However, it also contributes hugely to emissions - EnergyAustralia said that its retirement would lower the company’s carbon dioxide emissions by more than 60% relative to today’s figures once it retires in mid-2028. EnergyAustralia is targeting carbon neutrality by 2050, while the Yallourn coal plant is also costing the company around AU$200 million (US$155 million) to AU$300 million per year of investments just to keep it running.

Instead, the 350MW / 1,400MWh utility-scale battery project, to be built by 2026 ahead of the Yallourn plant’s closing down, will help ensure reliable electricity supply continues while allowing growing shares of renewable energy to be deployed and used effectively. The battery system will also be built in Victoria’s Latrobe Valley area, where Yallourn is.

The coal power plant had originally been scheduled for decommissioning in 2032, but yesterday EnergyAustralia announced the bringing forward of the plan by four years and said that a AU$10 million support package will be offered to the area to support the Yallourn plant’s workforce and local community.

The energy company acknowledged that the transition to clean energy needs to happen in a way that does not leave the 500 permanently employed staff at Yallourn, as well as another 500 or so staff that are employed temporarily when major unit outages occur at the plant’s four giant turbines, which EnergyAustralia can happen up to about four months of most years.

“The energy transition is too important to leave to chance – a plan that supports people, the Latrobe Valley and locks in energy storage capacity before Yallourn retires will ensure the smoothest transition possible. Our AU$10 million support package, coupled with seven years’ advance notice, means our power station and mine site people will have time to plan, reskill or retrain,” she said.

“EnergyAustralia is determined to demonstrate that coal-fired power can exit the market in a way that supports our people and ensures customers continue to receive reliable energy,” Catherine Tanna, managing director of EnergyAustralia said.

In a statement sent to Energy-Storage.news, non-profit group Environment Victoria pointed out that the closure of Yallourn marks the end of just one of more than 20 coal-burning power stations in Australia, which the group's CEO Jono La Nauze said are "the single biggest source of pollution that causes climate change and threatens public health". La Nauze said that all of them need to close by 2030 to be replaced with clean energy sources like solar, wind and battery storage.

"We can’t leave such an important task to the market to decide," La Nauze said.

"Just this week, the Secretary General of the United Nations called on developed countries to phase out coal power by 2030 – this is the task before us, and our state and federal governments need to rise to this challenge. Are we going to have 20 separate closure announcements, each one dictated by an energy company based on the whims of the market, with months of speculation beforehand? Governments across Australia need to step in and create a timeline to phase out all coal power stations by 2030 in order to reduce pollution and address the climate crisis." 

La Nauze said that given the fast pace of change in Australia's power market and the high costs of running Yallourn, the facility could even close earlier than 2028 - "the last possible date" the power plant can remain open. Environment Victoria believes that clarity is needed from the Victoria government on the closure of Yallourn and other coal plants, particularly in light of the need to help communities economically dependent on them and said the state needs to accelerate its transition to clean energy to meet climate goals. La Nauze added that at a national level, Federal Enery Minister Angus Taylor "continues to ignore that Australia is moving beyond coal".

"Workers and communities need a comprehensive plan and tangible support that will ensure local families and businesses have a certain future with thriving local economies," he said.  

Australia's renewables era looks set to be underpinned by some of world's biggest battery facilities

EnergyAustralia was behind two of Australia’s first grid-scale battery projects, both in Victoria. One is at Ganawarra solar farm, Victoria (25MW / 50MWh, supplied by Tesla) which commenced operations in March 2019 and another to support a large transmission substation in Ballarat (30MW / 30MWh, supplied by Fluence) completed in December 2018. Reports on their operation after each had been in service for over a year found both to have been successful in technical, economic and environmental terms in lowering electricity costs and reducing carbon emissions and fossil fuel use.

While EnergyAustralia’s latest endeavour represents a big step up in scale from those two, it’s the latest huge battery project planned in Australia, several of which are planned as direct aids to the retirement of coal generation. Another major Australian utility, AGL, said in November that it is developing a 200MW grid-scale battery in the Latrobe Valley in a pipeline of 850MW of batteries that it intends to build. AGL has said that it has picked leading system integrators Fluence and Wartsila as preffered suppliers for its expected build-out, which could rise to as much as 1,000MW. 

Although EnergyAustralia’s Yallourn replacement battery system would be larger than the world’s largest battery project in operation today, a 300MW / 1,200MWh system in Moss Landing, California, it isn’t even the biggest battery project proposed to replace coal in Australia: at the beginning of this year, integrated energy company Origin Energy issued a call for suppliers and contractors to work on a potential 700MW / 2,800MWh battery project to be deployed as Origin’s only coal plant, the Eraring 2,880MW plant, is scheduled to retire.

To add further context to Australia’s narrative of building large-scale battery storage that just seems to get bigger and bigger, other huge projects are being planned to support the integration of renewables, but are not necessarily directly linked to the retirement of a particular fossil fuel plant. Specialist renewable energy fund CEP. Energy said in early February that it wants to build a battery system of “up to 1,200MW output” in an industrial redevelopment zone in New South Wales.

Later that month, the national Clean Energy Finance Corporation (CEFC) agreed to provide AU$160 million of debt financing to the Neoen 300MW / 450MWh Victorian Big Battery for which France-headquartered developer Neoen will partner with battery system supplier Tesla once again, the pair having worked together on the famous Hornsdale Power Reserve project in South Australia. Neoen is also planning a "Great Western Battery" 500MW / 1,000MWh project in New South Wales. These mega-projects are joined by several other planned large-scale battery facilities around the country, included some paired directly with solar and wind facilities. 

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