The New South Wales (NSW) State Government has entered talks with Origin Energy to discuss extending the life of Australia’s largest coal-fired power station. The move comes after the nation’s grid operator flagged concerns of energy shortfalls over the next ten years as it retires 62% of its coal power fleet.
The Eraring Power Plant, located 120km north of Sydney, has a generating capacity of 2,922MW and accounts for 25% of NSW’s power requirements. In February 2022, Origin notified the Australian Energy Market Operator of the potential retirement of Eraring in August 2025. The latest round of talks could lead to this being delayed for an unspecified amount of time.
The NSW Government said that this is motivated by the need to shield Origin customers from volatile global energy prices and maintain sufficient supply. Chris Minns, the NSW Premier, stated: “One of the biggest challenges facing NSW is ensuring that we can keep the lights on, while managing the biggest change in energy mix and consumption in the shortest period of time in our nation’s history.”
Since the retirement of the Lidell coal-fired power plant in April this year, NSW has just four stations producing 70% of the state’s electricity. However, since 1 July, electricity prices have risen between 14% and 21%, prompting the government to address the burgeoning supply issue.
When asked about the cost of the extension, NSW Energy Minister Penny Sharpe refused to comment. Former Energy Minister Matt Kean estimated the plans will cost the government A$3bn ($1.91bn), but Sharpe refuted this figure.
Tim Buckley, director at the think tank Climate Energy Finance, was critical of the proposals for the Eraring plant stating: “The idea that a 50-year-old plant can just be extended without serious risk of catastrophic failure is ridiculous.”
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David Ritter, Greenpeace Australia Pacific’s CEO, also criticised the proposal: “Propping up an old polluting power station with public money during both the climate and cost of living crises is bonkers. The Minns government must immediately rule this out.”
Minns insists that the government is on track with its climate targets, regardless of the Eraring decision.