Australia’s largest coal power plant to operate for an additional two years which green groups say is a ‘disaster’ | Energy

Eraring, Australia’s largest coal-fired power station in New South Wales, will remain open for another two years until 2029 due to concerns about the ability of the national energy grid to support demand.

Origin Energy, the operator of the plant at Lake Macquarie, had previously reached an agreement with the state government to delay the closure of Eraring from 2025 to August 2027. The state’s environment minister said the new expansion would contribute to NSW’s emissions reductions, while climate campaigners described it as a “disaster”.

Environment minister Penny Sharpe confirmed on Tuesday morning that Origin had notified the NSW government, the Australian Securities Exchange (ASX) and the Australian Energy Market Operator (Aemo) that it would operate Eraring until April 2029. All four units of the power plant will continue to be used.

“Origin’s decision provides certainty for workers, the market and energy consumers across the state, as well as contributing to NSW’s 2030 emissions reduction target,” Sharpe said.

The original agreement also included an option to extend until 2027.

“My number one job is to keep the lights on and put downward pressure on electricity prices. NSW is making real progress in replacing aging coal-fired power stations. Since the election, we’ve increased the amount of renewable energy capacity in operation by almost 70%. That’s the equivalent of Eraring’s capacity.”

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The decision comes after Aemo’s System Security Transition Plan, published last month, warned of “power vulnerabilities in New South Wales” on the energy grid for 2027-28 under Eraring’s previous retirement date.

Sharpe said current energy security projections showed NSW would have adequate energy supply when Eraring closed in 2029 “thanks to the introduction of new renewable energy generation and storage”.

Origin’s chief executive Frank Calabria said the decision to keep Eraring open “will provide more time for renewable energy, storage and transmission projects to be delivered and reflects uncertainty around 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 such as our large-scale battery at Eraring, but it has become clear that the Eraring power station will need to operate for longer to support a safe and stable power supply,” he told the ASX on Tuesday.

A 700 MW battery is expected to provide an average of 4.5 hours of storage capacity on site by mid-2027.

The NSW Greens said the move was “a disaster for NSW and Australia’s climate ambitions”. “Keeping any coal power plant open for longer is a disaster for the cost of living and human health,” said Abigail Boyd, the party’s environment spokeswoman.

“Despite persistent warnings that NSW is not currently on track to meet our statutory climate targets, the NSW Labor government is carrying on with business as usual.”

Boyd claimed two more years of full production of “16TWh” at Eraring would “contribute to moving us up to 50% away from our statutory emissions reduction targets in each year of operation, or approximately 3.5% of our total emissions budget.”

The state government has legislated emissions reduction targets of 50% below 2005 levels by 2030, 70% by 2035 and net zero by 2050.

“Far from supporting the transition, Origin’s decision will eliminate investment in the clean, modern production sources we need to transition to,” said Jacqui Mumford, CEO of the Nature Conservancy Council of NSW.

Johanna Bowyer, of the Institute for Energy Economics and Financial Analysis, said expanding Eraring’s scope “undermines certainty at a time when a new generation of investors needs clarity”.

Jackie Trad, chief executive of the Clean Energy Council, said recent coal-fired power outages, including one at the Callide C coal power station in Queensland last week, showed “extending the life of aging coal plants is far from ideal”.

“An orderly transition is important, but the reality is that older coal plants are becoming increasingly unreliable and expensive, and this volatility is passed directly on to consumers,” he said.

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” to transition to renewable energy.

“We have seen project after project delayed, with regional communities ignored and oppressed by a government that does not listen.”

Origin said the extension is not expected to affect its 2030 emissions reduction targets and 2050 net zero plans. The 2,880 MW black coal power plant on the shores of Lake Macquarie has been fully operational since 1984.

About half of the national power grid is powered by black coal-fired power plants like Eraring.

– via Australian Associated Press