Life of nation’s largest coal power station extended
Australia’s largest coal-fired power station will operate for about two years to support the national grid during the energy transition, the operator said.
Origin Energy said on Tuesday that extending Eraring’s operation to 2029 would reduce risks to system security highlighted by grid operator AEMO in a recent report.
Origin CEO Frank Calabria told the ASX the decision provides more time for renewable energy, storage and transmission projects to be delivered.
This also reflected uncertainty about the reliability of Australia’s aging coal and gas fleet.
“We made the decision to expand Eraring’s operations after considering a number of factors, including our customers’ needs, market conditions and the important role the facility plays in the NSW energy system,” Mr Calabria said.
The 2880-megawatt plant, Australia’s largest in terms of energy production, is located on the shores of Lake Macquarie south of Newcastle and was originally scheduled to close in 2025.
But that date has been pushed back to August 2027 after the NSW Labor government agreed a $450 million risk-sharing deal for the aging coal-fired plant.
Under the agreement, NSW will cover some of the losses, up to $225 million per year, provided advance notice is given by Origin.
NSW Labor said allowing the power station to close in timetable 2025 would put huge pressure on the grid, energy prices and households.
But positive market conditions mean Origin does not need to activate its security blanket, which will rupture in August 2027.
Extending Eraring’s life is not expected to impact Origin’s 2030 emissions reduction targets, the company said.
Origin paid $75 million to take over the power station between Sydney and Newcastle when it was privatized in 2013.
The site is being converted to host a 700 MW battery that is expected to provide an average of 4.5 hours of storage capacity by mid-2027.
About half of the national power grid is powered by black coal-fired power plants like Eraring.
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