Energy Giant AGL will close the Loy Yang A coal-fired power station in Victoria's east and the Bayswater station in the New South Wales Hunter Valley at least three years ahead of schedule.
The Loy Yang A power station is one of Victoria's newest coal-fired power stations and produces 2,210 megawatts (MW) of electricity, about 30 per cent of the state's total.
It was initially slated to close by 2048, but in a half-yearly update to its shareholders, AGL announced it would get out of coal between 2040 and 2045.
The company also used the financial update to bring forward the closure of the Bayswater plant in NSW.
The power station near Muswellbrook in the Upper Hunter generates enough electricity to power 2 million homes.
The target date for closure was 2035, but AGL is now aiming to close the plant sometime between 2030 and 2033.
Environment groups in Victoria had hoped the company would announce a quicker exit from coal and have slammed the decision.
"What this means is that AGL is going to continue or wants to continue having its power stations pollute for another 23 years, which is completely unrealistic," Environment Victoria's campaigns director Greg Foyster said.
He said the rapid growth in renewables meant AGL would likely have to bring its closure dates forward again in years to come, creating uncertainty in coal communities.
The Australian Energy Market Operator (AEMO) has forecast all coal plants could be shut across Victoria by 2032.
AGL to split into two companies
AGL is in the process of splitting its business into two companies — AGL Australia and Accel Energy.
Its coal-fired power stations will be housed in Accel Energy, which will also own 15 per cent AGL Energy.
Environment Victoria said AGL's planned new structure is a form of "green washing", as it separates its high-polluting assets from its retail business.
But AGL chief executive and managing director Graeme Hunt told shareholders the company was making strides towards cutting its emissions.
He said the new AGL Australia would be carbon neutral upon listing and planned to achieve net-zero by 2040.
A vote on the proposed split is expected in June.
AGL posted an after-tax profit of $194 million for the first half of the 2022 financial year, down 41 per cent on the same time a year ago.
Early closure for Bayswater
About 600 people are employed at the Bayswater thermal coal plant, which is close to AGL's Liddell Power station, set to shut next year.
Johanna Bowyer from the Institute for Energy Economic and Financial Analysis says there are plenty of new renewable projects on the way to fill the void after the closure of the two major power stations.
The NSW government has a number of clean-energy storage projects under its electricity roadmap.
"That is a plan to put in 12 gigawatts of renewables by 2030 and 2 gigawatts of storage," Ms Bowyer said.
"So there are lots of plans in place to start installing new generation assets to replace these ageing generators."
"AGL is acknowledging that closures could occur sooner than 2033 as well. It depends on the readiness of the entire system to operate without the baseload generation."
Going through an 'incredible transition'
Upper Hunter MP Dave Layzell said he wasn't surprised by AGL's announcement that the Bayswater power station would close two years earlier than first planned.
"We're going through this incredible transition in our energy market and it's becoming tougher and tougher for coal generators to compete with renewables."
Mr Layzell said some of the 600-strong workforce were "probably anxious" about the news.
"My job is to make sure we've got a strong industry in the Valley where there's plenty of jobs those people can go to."
