AGL Energy and VIC Govt entered into ‘Structured Transition Agreement’ relating to Loy Yang A

Six days ago (on Monday 21st August 2023) AGL Energy announced that they had …

‘entered into a Structured Transition Agreement (STA) with the Victorian Government (the State) relating to arrangements for the operation, maintenance and retirement of the Loy Yang A Power Station (LYA PS) and the associated mine.’

Here is the announcement:


In particular, they wrote:

‘The STA provides for AGL and the State to collaborate on the orderly closure of the LYA PS by a scheduled closure date of 30 June 2035…’

‘Avoiding an unplanned closure of the LYA PS before the scheduled closure date through a risk sharing mechanism that will apply in the event of adverse market conditions transpiring before the scheduled closure date (if deemed necessary by the State including to maintain system reliability);

‘Continue to operate the LYA PS in accordance with certain agreed operational and performance availability levels and consistently with generally accepted industry standards; and


I’ve noted this here, because it’s likely we’ll be referring back to this in the coming weeks, months and years…


(A)  Also from the main stakeholders

From Energy Minister (Lily D’Ambrosio) via the site formerly known as Twitter, I noted this release on the same day:


… and via Facebook as well:


… with the Facebook post referencing this Media Release ‘Agreement Secures Transition For Loy Yang A’ on the Premier’s website:


Incidentally, I did see that Norton Rose Fulbright reported here their advice to the Victorian Government on the orderly closure in June 2035 of the Loy Yang A Power Station.


Via their weekly newsletter on Thursday 24th August 2023, the AEMO made a small note that AGL …

‘intended to cease being the Registered Participant as Market Scheduled Generator in respect to Loy Yang A Power Station, Units 1-4 from 30 June 2035.’

as follows:




(A)  In the media over the past week

In the week that’s followed the AGL announcement, I have seen a number of different

1)  Here on WattClarity®:

(a)  There’s this note, obviously

(b)  But it’s also worth reminding readers of how we wrote We’re not building enough replacement dispatchable capacity back on 14th May 2023 with reference to the GenInsights Quarterly Updates for 2023 Q1 that we’d released beforehand.

2)  In the AFR I have seen…

(a)  on 21st August, Angela Macdonald-Smith wrote  ‘Vic to support AGL’s Loy Yang coal plant in hush-hush deal’ noting within…

‘It provides unspecified state assistance for the 2210-megawatt plant ahead of its shutdown in the event of low wholesale prices that might otherwise drive an earlier closure.’

(b)  with references in other articles later that week as well…

3)  In the Australian I have seen …

(a)  On Monday 21st August, Colin Packham and Rachel Baxendale wrote ‘Victoria strikes deal with AGL to manage exit of Loy Yang coal power station’, including the comment that:

‘The Andrews government has agreed to underwrite the state’s biggest electricity generator, removing a risk that could have seen the energy plant shut down years earlier if low wholesale electricity prices eroded its profits.

Victorian Climate Action, Energy and Resources Minister Lily D’Ambrosio refused to be drawn on the details of the risk- sharing mechanism agreed with AGL, the second secret deal struck to prop up coal after a similar pact with EnergyAustralia’s Yallourn station two years ago.

(b)  Nothing further, at this point.

4)  In the Guardian I have seen …

(a)  On Monday 21st August, Peter Hannam and Benita Kolovos wrote ‘AGL agrees to keep Victoria’s Loy Yang A power station available until mid-2035’.

(b)  On Thu 24th Aug, Adam Morton mentioned the developments at Loy Yang A and Eraring in relation to clean energy development in the article  ‘Solar and windfarm investment is drying up – and Australia needs a wake-up call on the future of the electricity grid’..

(c)  I’ve not seen anything else at this point.

5)  In SMH and the Age I noted …

(a)  On Thu 24th August, Mike Foley wrote Why we won’t quit coal – just yet.

(b)  Nothing further, at this point.

6)  In RenewEconomy I have seen …

(a)  On 21st August, Giles Parkinson wrote Closure deal on Australia’s dirtiest power station kills hopes of early 100pct renewables.

(b)  then on Tue 22nd Aug, Giles Parkinson wrote ‘Eraring and Loy Yang A coal closure wrangles show need for hard renewable targets’.

(c)  Nothing further, at this point.

7)  In PV Magazine I have seen …

(a)  Nothing at this point.

8)  In the ABC I have seen …

(a)  Nothing at this point.

9)  In the New Daily I have seen …

(a)  on Mon 21st Aug, someone wrote ‘Door ajar for earlier closure of coal power station’..

(a)  Nothing further


As a reader here, if you come across any other useful commentary, feel free to add as a comment below.


(B)  Social Media

Noting the irony of the Victorian Minister’s refusal to accept supply from fossil-fuelled generation in the ESB’s earlier attempt to design a capacity market, in Spectator Australia I noted how Rebecca Weisser wrote on Saturday 26th August ‘Who’s the Coalkeeper now?’.




With the release of the 2023 ESOO slated for later this week, there will be many looking for clues (there, here, and elsewhere) about what this all means about the ongoing need for ‘keeping the lights on’ services

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

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