The New South Wales (NSW) Government is set to announce that it will extend the operation of Eraring power station for as long as four more years.

Taxpayer money will be used to subsidise Australia’s largest coal-fired power station for two years, with permits to run for two more, several people briefed on the plans told the Guardian.

On Friday, the cost of the subsidies is due to be discussed by the NSW Government’s executive review committee.

Origin Energy, the Sydney-based energy company that runs the plant, does not have long-term contracts for the operation of the four-unit facility. The subsidy would be used to cap the price of coal and to expand the plant’s coal-ash dams.

Speaking to the Guardian, a spokesperson for Australian Energy Minister Chris Bowen said: “The NSW government believes Eraring should close not a day earlier or a day later than it is needed. Both governments are focused on ensuring a reliable and affordable transformation of the electricity sector.”

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.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In September, the NSW Government entered talks with Origin to discuss extending the plant’s life. At the time, the NSW Government said that the move was motivated by the need to shield Origin customers from volatile global energy prices and maintain sufficient supply.

NSW Premier Chris Minns said: “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.”