Lessons learnt from the demolition of Victoria's Hazelwood power station will be fed into the decommissioning and rehabilitation of AGL's 1000 megawatt Liddell power station.
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AGL has set aside $225 million for the project.
It announced last week that it had commissioned Delta Group to undertake the first stage of closure, decommissioning and demolition planning for the ageing coal-fired power station.
Delta Group worked with French energy giant Engie on the decommissioning and demolition of the Hazelwood power station.
The project engaged about 200 contractors over several months.
AGL plans to close Liddell in stages across 2022 and 2023.
The first of the power station's four 420 megawatt units will close next year, with the remaining three units expected to be brought offline in 2023.
Among other issues, the planning process will assess the potential to recycle as much of the power station's raw materials as possible.
Asbestos removal will be among the key challenges during the demolition of the 50-year-old plant.
"We have asbestos at all of the older sites," AGL Energy's chief operating officer Markus Brokhof said.
"We have a clear view where we expect to find asbestos but there could be additional asbestos in there."
Another challenge is to ensure that the demolition process does not impact on the operation of the nearby Bayswater power station.
"From an operational perspective the biggest challenge we face is to ensure that the work we are doing at Liddell does not disturb our operations at Bayswater," Mr Brokhof said.
The demolition project will also not impact on the evolution of the AGL's energy park on the 10 hectare site.
The company is currently working through plans to develop waste to energy and solar thermal pilot projects on the site with the aim of creating one of the world's most versatile renewable energy hubs.
There are also plans to build a 500 megawatt battery on the site.
The company is awaiting further details about the NSW Energy Roadmap before making a decision on whether it will proceed with a 250 megawatt peaking plant at Tomago.
"For us it was not economically feasible to take an investment decision on this (at the moment). If you look at the wholesale market prices I think everybody would say it's a very challenging time to make an investment decision on a gas-fired power station," Mr Brokhof said
"I think everybody can calculate what is needed to make an initial return in order to make it viable and at the moment the market prices don't support this."