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Australia’s largest coal-fired power plant, Eraring, will stay open for an extra two years until 2029, amid concerns about the national energy grid’s ability to support demand ahead of the station’s planned retirement.
The operator of the plant in Lake Macquarie, Origin Energy, had previously agreed a deal with the New South Wales government to extend Eraring’s closure from 2025 to August 2027. While the state environment minister said the new extension would contribute to NSW’s emissions reductions, climate advocates described it as a “disaster” for emissions targets.
In a statement on Tuesday morning, the environment minister, Penny Sharpe, confirmed Origin had notified the NSW government, the Australian Stock Exchange (ASX) and the Australian Energy Market Operator (Aemo) that it would operate Eraring until April 2029. All four units of the power station will continue to be used.
“Origin’s decision gives certainty to workers, the market and energy consumers across the state, as well as contributing to NSW’s 2030 emissions reduction target,” said Sharpe.
“My number one job is keeping the lights on and putting downward pressure on power prices. NSW is making real progress replacing ageing coal-fired power stations. Since the election, we have increased the amount of renewable energy capacity in operation by almost 70%. That’s equivalent to Eraring’s capacity.”
The decision comes after Aemo’s Transition Plan for System Security, released last month, warned of energy grid “strength deficits across New South Wales” for 2027-28 under Eraring’s previous retirement date.
Sharpe said current energy security projections showed NSW would have sufficient energy supply when Eraring closes in 2029, “thanks to new renewable generation and storage coming online”.
Origin’s chief executive, Frank Calabria, said the decision to keep Eraring open would “provide more time for renewables, storage and transmission projects to be delivered, and reflects uncertainty regarding the reliability of Australia’s aging coal and gas fleet”.
“Good progress is being made on the delivery of new energy infrastructure including major transmission works and projects like our large-scale battery at Eraring, but it has become clear Eraring power station will need to run for longer to support secure and stable power supply,” he told the ASX on Tuesday.
The NSW Greens said the move was a “disaster for NSW and Australia’s climate targets”. Environment spokesperson Abigail Boyd said “keeping any coal power station open longer is a cost-of-living and human health disaster”.
“Despite persistent warnings that NSW is already not on track to achieve our legislated climate targets, the NSW Labor government has been continuing on a business as usual trajectory.”
Boyd claimed a further two years of full production “of 16TWh” at Eraring would “contribute to taking us upwards of 50% further away from our legislated emissions reduction targets each year of operation, or around 3.5% of our total emissions budget”.
The state government has legislated emissions reductions targets of 50% below 2005 levels by 2030, 70% by 2035, and net zero by 2050.
Advocacy group the Total Environment Centre’s Jeff Angel acknowledged the difficulties of the energy transition and noted the government was not offering further finanical assistant to the plant, but said the “decision increases the urgency to act faster on the green energy future”.
“How will the government do that?”
The NSW opposition said the announcement “provides a reprieve for the state’s energy security” but claimed it showed a “broader failure” by the Minns government to secure the “social license” for the renewables transition.
“We have seen project after project delayed, while regional communities are being ignored and steamrolled by a government that doesn’t listen.”
Origin said the extension is not expected to affect its 2030 emissions reductions targets and 2050 net zero plans. The 2,880MW black coal plant on the shores of Lake Macquarie has been fully operational since 1984.
About half of the national electricity grid is powered by black coal-fired power stations such as Eraring.
– with AAP
