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Reimagining power stations: Next generation assets

Drawing on existing skill sets and infrastructure, old coal-fired power stations are being repurposed into renewable energy hubs and vibrant community assets as the low-carbon transition gains pace.

Australia’s pathway to net-zero is taking an unlikely twist with some of the country’s oldest coal-fired power stations set to propel the clean energy future. 


Energy giants such as AGL have announced plans to fast-track their exit from coal-fired generation, but rather than abandon their legacy assets, they are transforming them into renewable energy precincts and low-carbon industrial hubs.


Australia’s largest thermal generator, AGL is repurposing its Torrens Island gas-fired power station site in South Australia into an integrated, low-carbon industrial energy centre that includes a 250 MW battery. Its Loy Yang A coal power station in Victoria and its recently closed Liddell site in NSW also have plans to home grid-scale batteries.


French energy company ENGIE is also transforming its former Hazelwood mine and power station in Victoria with a 150MW utility-scale battery and plans to support new commercial and recreational uses. 


Origin Energy intends to shut the 2,880MW Eraring black coal generator from August 2025, seven years earlier than previously projected, with plans to install a battery with a capacity of up to 700 MW at the site. 


Meanwhile, EnergyAustralia has also announced that it will close its 1,480-megawatt Yallourn plant, in Victoria’s LaTrobe Valley, in mid-2028. Its 350 MW utility-scale battery project for the site will be completed by 2026.


Repurposing energy assets makes smart business sense as the transition powers ahead, but what does it take to reimagine a power station? 


Brown energy assets turn green 

The repurposing of coal-fired power plants is gaining momentum across the globe. 


New York’s Ravenswood power plant, for example, was recently purchased by energy giant Rise Light & Power with plans to transform the site into a renewable energy centre. Europe’s largest utility company Enel is seeking to transform 23 power plants in Italy into sustainable hubs dedicated to science, art and new industrial activities. 


London is home to two shining examples of adaptive reuse. The Bankside Power Station is now home to Tate Modern Art Gallery, following its decommission in the early 1980s. Battersea Power Station, also decommissioned in the 1980s, is now the centre of the city’s largest new developments, comprising new residential and commercial spaces and parkland.


“Battersea Power Station is a great example of what can be achieved,” says David Scrivener, Managing Director, Head of Energy, Infrastructure and Resources at Westpac Institutional Bank. “It was dormant for decades and now it’s a vibrant urban hub. The difference we’re seeing today is that companies are not wasting any time in transforming, rather than abandoning, energy assets.”


Along with their proximity to the high-voltage transmission network, access to major transport and existing water infrastructure, these energy assets have long employed a skilled workforce with deep knowledge of industry operations.


“These kinds of sites are already industrial-use zones and they’re already connected to the grid,” adds Scrivener. “And, if you want to build something like a big battery, that’s what you need.”


Driving decarbonisation change

For AGL, the repurposing of energy assets like Torrens Island presents an opportunity to create what its Chief Operating Officer Markus Brokhof describes as a “low-carbon industrial energy hub with a circular economy”.


AGL began progressively closing Torrens Island ‘A’ Station in September 2020, after more than 55 years in operation. During this time, it supplied approximately 200 million MWh of energy to the South Australian market. AGL also last year announced the closure of Torrens Island ‘B’ Station in 2026.


“With the last of Torrens closing mid of 2026, we developed a master plan that includes the kinds of industries we could attract to the site,” says Brokhof. “This journey started a year ago and we signed various memorandums of understanding, which now need to be converted into firm commitments.”


Brokhof says AGL is seeking to attract industries such as agriculture and manufacturing with a focus on renewables. 


“Wind turbine producers, battery manufacturing and the entire recycling industry,” he says. “We have signed a memorandum of understanding with Solar Recovery Corporation, which recycles end-of-life solar panels. Hydrogen is also a component of our energy hub strategy.”


For energy giant ENGIE, the decision to close its Hazelwood site in 2017 coincided with the company’s global strategy to exit coal fire generation and transition to clean energy. Demolition and rehabilitation activities are currently underway to return the Hazelwood site to a safe, stable and sustainable condition and to enable a range of potential new uses. 


“It’s in our best interest to drive change in areas of decarbonisation, not only because it drives value, but because it's what our customers are expecting us to do,” says Lawrence Kim, General Counsel and Executive General Manager, External Relations at ENGIE. 


“And, when we were in the last stages of ownership of coal-fired power stations, the challenges of trying to secure project financing or funding for growth or extension of life for those types of assets was incredibly difficult, and I'm glad we're not in that space anymore.”


Maintaining coal-fire assets like Hazelwood would also have required significant capital expenditure that Kim says ENGIE would “never see a return on”.


“It just didn’t make economic sense,” says Kim. “It’s been a long journey, and it isn’t over by any stretch of the imagination.”


Finding opportunities and managing challenges

Breathing new life into a power plant requires decommissioning, demolition and rehabilitation of the site, as well as extensive community consultation and a final regulatory green light.


“Decommissioning takes a period of six to eight months,” says Brokhof. “Then the demolition takes one to two years, followed by a period of rehabilitation. There are legacy waste dumps that need to be rehabilitated, and there are materials that contain asbestos that need to be carefully removed. We also have other potentially hazardous legacy substances that need to be properly handled to meet modern-day standards.” 


Another challenge, says Brokhof, is that these activities are rarely sequential. “We are decommissioning and demolishing half of one power station, while finishing a battery and running two gas-fired power stations [at Torrens Island] in parallel,” he says. “There are various activities of a totally different nature running at the same time, and this needs to be coordinated in parallel, which is also quite challenging. 


“It needs proper planning, it needs proper accountabilities and, of course, safety is a big part of this.”


ENGIE’s plan for Hazelwood is currently going through an environment effects statement process, which is the pathway for regulatory approval. 


“We're also working with the technical reference group, which includes representatives from various government departments covering mine, earthworks, water and environmental planning, to work through the scope of what studies need to be undertaken,” says Kim, adding that a clear timeline for the project is based on community feedback and environmental studies. 


“For a project like this, we need to understand all the geotech limitations, hydrogeological limitations, flora, fauna – the whole works,” says Kim. 


“We then need to develop a strategy on an end-product, which will take some time, and we’ll also continue to engage with the community for their feedback. From there, we’ll wrap it all up together and put a proposal to government.”


Seeing the potential

While energy companies are reimagining their power stations, retired sites are also presenting opportunities for a new breed of developer. 


The multi-purpose transformation of the former Wallerawang power station near Lithgow in NSW, for example, is currently underway. The site had been dormant for almost six years before Greenspot purchased the asset from Energy Australia in 2020. 


A privately owned investment company with a focus on disused traditional energy sites, Greenspot is partnering with Shell Energy on a 500MW/1,000MWh battery energy storage system, which will connect to the adjacent 330kV TransGrid Wallerawang Substation. 


Greenspot CEO Brett Hawkins says a further 200 hectares of the 620-hectare site will be used to attract “future backbone industry” to Lithgow.


“Our overriding objective is to seek zoning and uses that will attract a level of high-density employment and that will, in turn, create a multiplier effect to support SMEs in the area and the community as a whole,” he says. “We’re looking to accommodate commercial and industrial uses together with residential, tourism and recreational uses across an integrated precinct.


“What we are seeking to do is to bring these types of assets down the risk curve in order to attract the investment required to transform these regions and economies.”


An issue at the top of the risk curve, says Hawkins, is that dormant sites like Wallerawang were not previously recognised as major opportunities for redevelopment.


“There may also be zoning constraints and environmental issues that are sometimes difficult for institutional investors to come to grips with in an expeditious way,” says Hawkins. 


“Then you’ve got the whole process of decommissioning, demolishing and rehabilitating. Also, precinct development is complex, and even more so in a transitioning economy where orthodox property fundamentals don’t necessarily apply.”


A workforce in transition

For companies like AGL, energy transition also requires a transition for its workforce. 


“We have to attract new talent and without a vision for the future of our sites, it’s going to be very challenging,” says Brokhof. “And we will do our utmost to provide our workforce with employment in the future. That's the target for AGL, and the community also expects that we continue to be a large employer.“


Currently AGL employs about 140 people at its Torrens Island plant which is supplemented by a contractor workforce.


“There’s also a lot of secondary employment created, because people need accommodation and to buy food and so on,” says Brokhof. “If we were just shutting down, that would create unemployment in the region.”


Sustainable employment is also a goal for ENGIE’s Hazelwood site, says Kim.


“We've got people in and around the Latrobe Valley who are very familiar with electricity markets and networks and construction, so if we can create more jobs for people in the area, then that’s great.”


As the complex shift to net-zero gathers pace, Scrivener describes sites like Torrens Island and Hazelwood as beacons for the energy transition.


“The repurposing of energy assets is quite new for Australia, and Westpac has always been a partner for change,” he says. “We’ll continue to support our energy clients as they transition, and it’s exciting to be part of it.”


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