AGL is a minority investor in the largest brown coal-fired power station in Victoria, the Loy Yang A power station. Our 32.5% equity investment is structured through the Great Energy Alliance Corporation (GEAC) which owns Loy Yang Power which owns and operates both the power station and an adjacent mine.

AGL’s equity capacity in the Loy Yang A power station is 689 MW. Due to its fuel source and substantial size, Loy Yang A is one of the largest point source emitters of carbon dioxide in Australia, accounting for about 7% of national stationary sector emissions.

Importantly, the Loy Yang A power station is the most efficient of all the existing brown coal-fired generators in Australia. It produces competitively priced energy and has the lowest emission intensity of generators using brown coal in Australia.

However, while the power station is relatively efficient, AGL is working hard with Loy Yang Power to consider potential emission reductions. As a participant on the environmental sub-committee of the GEAC Board, AGL works to ensure that Loy Yang Power’s environmental performance is both consistent with and complementary to AGL expectations.

Construction of a small coal drying pilot plant was completed at Loy Yang A power station in July 2008. The coal drying process, known as Mechanical Thermal Expression, is a relatively new technology which involves applying pressure to remove moisture from brown coal prior to the combustion process. On 9 November 2007, the Hon Peter Batchelor, Minister for Energy in Victoria, launched the pilot plant. The pilot plant has been co-funded by Loy Yang Power, other industry participants and the Australian and Victorian Governments. The plant demonstrates how greenhouse emissions can be reduced if the moisture content of the coal is lowered.

In 2006/07, AGL unsuccessfully applied for funding to build and operate a carbon separation plant which could be used in a wide-scale geosequestration project in the future. The $98 million project sought funding from the Commonwealth Government Low Emission Technology Demonstration Fund. While this result was disappointing, AGL continued to work with technology partners to deliver further results for Loy Yang Power and the broader brown coal community in the Latrobe Valley.

Loy Yang Power has joined a research project to investigate technologies that capture greenhouse emissions from brown coal power stations. Loy Yang Power is working with CO₂CRC, International Power and CSIRO on the $5.6 million Latrobe Valley Post Combustion Carbon Capture (LVPCCC) Project which has received $2.5 million from the Victorian Government. Capturing and storing emissions from coal-fired power stations has the potential to significantly reduce the amount of CO₂ emitted to the atmosphere. In a first for Australia, carbon dioxide was captured from power station flue gases in a post-combustion capture pilot plant at Loy Yang Power. The LVPCCC project provides Loy Yang Power with opportunities to advance knowledge of carbon capture and storage technologies which will assist in enabling deployment of commercial CCS technologies by 2020.