The co-owner of Queensland’s biggest coal-fired power station in Gladstone has said it could close the plant in March 2029 – six years earlier than expected.
The power station – one of the least reliable in the national electricity market – is seen as a critical part of the region’s heavy industry, providing power to Rio Tinto’s own aluminium smelter, as well as alumina refineries and LNG and cement plants in the region.
Rio Tinto, the co-owner of Gladstone power station (GPS), said it had notified the Australian Energy Market Operator (Aemo) “of the potential retirement” of Gladstone.
Aemo’s expected closure year of the power station was 2035.
Rio Tinto said: “No final decision has been made to retire GPS, which has operated since 1976, and there is potential to extend the life of the power station should market and other factors allow.
“There is no immediate impact of this notification on GPS operations. Existing power supply contracts, including to Boyne Smelters Ltd, will remain in place until their scheduled expiry in March 2029.”
The company said between now and March 2029 it would “engage with stakeholders on the energy market and on options for the future use of the site, which will inform the timeline and strategy for retirement of the facility”.
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The state’s Liberal National government is due to announce its energy plan this month, but has already said it wants coal plants to run for longer – a reversal of the previous Labor government’s plans to end reliance on coal power by 2035.
Queensland’s premier, David Crisafulli, told reporters on Wednesday he had “not seen the reports” of the closure, but was “optimistic about the future of mining and manufacturing in this state, which is why we need an energy plan that is affordable, reliable and sustainable”.
The treasurer and energy minister, David Janetzki, said the government was “actively working with our government-owned corporations to prepare the network for the eventual closure of Gladstone Power Station”.
Analysts Nexa Advisory said this month that Gladstone power station had seen an average of 4,200 hours of unplanned outages a year since 2020 – making it one of the worst performing plants in Australia.
“Queensland’s major industrial economy is at risk because of the Gladstone Power Station,” said Stephanie Bashir, Nexa’s chief executive.
“An industry which generates $6bn in economic output is relying on a power station that is offline for the equivalent of more than half the time.”
Bashir said the state government needed to establish a firm timetable for Gladstone’s closure while delivering a project to enhance the power grid in the region so renewables and energy storage projects could come online.
She said: “This is not about turning off coal tomorrow, it’s about being honest about Gladstone’s poor performance and planning for a secure, affordable and cleaner energy system.”
Bashir speculated that Rio Tinto’s announcement of a “potential” closure could be a “fishing for subsidies exercise” – an attempt by the company to pressure the government for financial support to keep the plant running.
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Rio Tinto would not comment on that claim.
Dave Copeman, the director of the Queensland Conservation Council, said Rio Tinto had “made it clear they can’t keep their Gladstone operations and smelter globally competitive relying on expensive coal power”.
“The premier can’t put his head in the sand any longer,” he said.
“He can’t ignore that the failure to replace our ageing coal power stations is jeopardising regional Queensland communities by failing to plan for the necessary transformation of our energy system and economy.
“It’s vital that governments are honest about the need to replace our ageing coal power stations, so that we get the planning right, build enough replacement renewable energy and set up new clean industries to future-proof regional economies.
“We can’t keep throwing billions of taxpayer dollars at failing and polluting coal, and cross our fingers and hope it will keep the lights on.”
Gavan McFadzean, the climate and energy program manager at the Australian Conservation Foundation, said it was “encouraging to see Rio Tinto transitioning its smelting assets in Gladstone”.
“Crisafulli should stick to the climate and renewable targets he took to the state election.
“The market is moving. The Queensland government should not hold it back.”
