Out-Law News 1 min. read

350MW battery to replace Yallourn coal plant

Energy generation company Energy Australia has planned to close its Yallourn coal plant in Australian Victoria state in 2028 and build a 350-megawatt (MW) battery by 2026.

The battery will provide energy for four hours at a time and will be “larger than any battery operating in the world today”, according to Energy Australia’s managing director Catherine Tanna.

The company will work with the Victoria state government on a A$10 million support package to reskill about 500 affected workers, it said.

John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “Being part of the team that brought Yallourn into Energy Australia over two decades ago, it is with some nostalgia I note its planned closure. However, this has been an inevitability for some time and needs to be viewed in the context of other such closures, planned or already implemented. The world two decades ago was far less informed on the need to decarbonise, and even renewable energy was viewed as a fringe business for energy companies. Today, renewable energy is mainstream and it is almost impossible to finance a new coal fired power station. The next 20 will likely be equally transformative, with the combination of intermittent power and storage being increasingly important. However, an interesting economic consideration is the extent to which the arbitrage value of storage will be affected by the decreasing amount of base load coal fired power plants on the system.” 

“Here in Asia, while coal’s role is no doubt fading, the role of battery storage is less clear. Asia’s different regulatory structures mean the regulation of storage and the role it could play will vary from jurisdiction to jurisdiction. Nevertheless, the increasing role of intermittent generation from solar, and some extent wind, in Asia means firming capacity will need to follow. Regulation of storage will therefore have been addressed and clarified,” he said.

The shutdown of Yallourn will reduce Energy Australia’s carbon dioxide emissions by over 60%. The generation capacity of the coal plant is 1480MW and it supplies 22% of Victoria’s electricity, or 8% of Australia’s.

The Victoria’s state government allocated A$540m in its 2021 budget for the first stage of development of renewable energy zones (REZs) in February.

In January, Australia’s energy retailer Origin Energy announced to build a 700MW capacity battery at a coal-fired power plant in Eraring in the Hunter region of New South Wales.

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