Used the right way, this methodology can propel companies onwards by bringing into focus what is required to close a power station. A well-developed decommissioning and demolition strategy minimises the cost of inaction (or late action). If a company can see a clear and transparent pathway to closure in the form of effective approaches, there is an important, and easily understood, ability to leave a positive legacy long after closure.
5 considerations when decommissioning and demolishing power stations
1. Beyond compliance
Striving for a positive legacy for the site, beyond solely compliance, brings about a range of opportunities for future value creation by applying a strategic approach to securing ongoing beneficial uses.
Environmental assessments and site surveys can identify potential hazards and pollutants. This then effective strategies for managing waste, pollution, and contamination during the decommissioning process.
For asset owners, waste management during decommissioning and demolition is complex and can be challenging. There are, however, pathways towards achieving sustainable solutions at manageable cost to the company and minimalised cost to the environment and communities. With good closure practices, works pertaining to a facility’s closure, while still in some form of operation, may negate risks associated with the licence to pollute and post-closure liability.
2. Navigate a pathway to economic optimisation
By closely examining how land can be transformed post remediation, decisions made during the decommissioning and demolishing phases may provide significant benefits for circularity of materials and products, and this has both a sustainability and economic benefit.
For instance, 98 per cent of the above ground structures at Munmorah Power Station in New South Wales were recycled when the facility was upgraded. Similarly, Battersea Power Station in England was repurposed into a mixed retail, commercial and residential precinct, receiving high praise from industry.
Any decommissioning and demolishing strategy must be nested within a transition plan, and this isn't just important for asset owners. Organisations across the whole value chain may have an important contribution to make, for instance, being able to reuse materials and assets, or remanufacture equipment in a controlled industrial process.
Organisations across the whole value chain may have an important contribution to make.
On the flip side, there are times when company leaders defer making definite decisions on the future of a site to retain optionality. It’s important to note that whilst technology advancements may assist in decommissioning and demolishing activities at future dates, sites in disrepair and decay are more difficult to reconcile and repurpose.
Reputational risk of inactivity may be on the line. The opportunity to capture environmental, social or economic value is also at risk. Notwithstanding countervailing factors with uncertain futures, there are different ideologies that must be weighed by asset owners needing to remediate sites.
3. Proactively engage
Power stations and similar assets typically attract and build communities around them. The asset will have provided generational employment opportunities and helped to support local economies.
Expectations around asset closure have changed in recent decades, now becoming the responsibility of companies to consider how to deliver a long-term a positive legacy for communities. They could, as part of a social licence, play a leading role in facilitating alternative employment and local business revenue opportunities.
For this to be achieved, extensive collaboration between the asset owner, communities, businesses and government is required. If alternative economic development and financing approaches are able to be facilitated, there is the potential to mitigate social and economic impacts early.
How companies manage their social responsibility to communities, and deliver social value through this asset end stage, will impact reputation and a social licence to operate:
Involve stakeholders in discussions and asset staging decisions. Key stakeholders such as Councils, Chambers of Commerce, community members, and local networking and social groups are important partners in this process. Transparent communication is key to address areas of concern.
Bring those affected by the transition on the journey through clear and trust-based engagement and communication, together with socially, economically and environmentally responsible workforce transition planning.
The timing and sequencing of decommissioning, and which assets are to be demolished verses what will be repurposed needs to be undertaken as early as possible. This will provide an insight into the types of economic activity and employment opportunities that may exist post closure.
Collaborate with communities to support their transition as the power station progresses towards decommissioning and demolition. This may include fiscal or other forms of support for local community programmes and initiatives that will support community well-being and resilience, both in the short- and long-term.
Recent examples of innovative asset closures include real estate around power stations being redeployed for large-scale battery storage, port facilities exploring the role of large-scale hydrogen electrolysers, an abandoned gold mine acting as a hydro pumping scheme, a mine closure becoming a mountain biking mecca, and materials manufacturing plants converting to major retail distribution centres.
4. Learn from others and start early
Although Australia has many unique aspects to its network of power stations, inspiration can be drawn from international examples.
In Germany, the government's Coal Phase-Out Act combines phased closures with support for affected regions, including retraining workers and investing in new industries. The UK has a similar plan. Its coal closure programme includes proactive community engagement, workforce transition support, and rehabilitation of former mining sites for sustainable land use. There are also numerous examples of asset-based community development in South Africa and Canada, where local communities have initiated development themselves by identifying and mobilising existing, but often unrecognised, assets.
Leading companies with interests in Australia will recognise that careful and sustained early action over time will generate greater efficiencies and lessen the risk of unforeseen issues, while simultaneously ensuring the longevity of operations until closure. For this reason, sustaining capital, engineering and planning advice provides a pathway to maintaining a facility’s social licence to operate, minimising costs and risks during the final phases of operation, maximising employee and public safety, and leaving a stable community legacy beyond closure.
