Australia's largest coal-fired powerplant to remain open

The life of Australia's largest coal-fired power station will be extended for at least two years in order to prevent power shortages and blackouts in NSW.

Origin Energy has been in talks with the NSW government about extending the life of the Eraring power station after a review warned the scheduled August 2025 retirement could result in electricity shortfalls and price hikes, leaving a 25 per cent gap in NSW's power requirements.

In a statement on Thursday, the state government described the agreement as 'temporary and targeted' in order to guarantee a minimum supply of electricity until the new expected closure date.

australia's largest coal-fired powerplant to remain open

The Eraring power station (pictured) was due to close in mid-2025, seven years earlier than planned

'A temporary extension of Eraring will provide time to deliver the renewable energy, storage and network infrastructure projects required to replace the power station,' it said.

The NSW government and Origin have agreed to an underwriting arrangement under which the state will not make any up-front payments to the energy company to operate Eraring.

Instead, Origin will need to decide by March 31 in 2025 and 2026 whether it wishes to opt in to the underwriting arrangement for the following financial year and share up to $40 million per year of any profits it earns from the facility.

If the power station operates at a loss, Origin will be able to claim no more than 80 per cent of the sum from the state government.

Those claims will be capped at $225 million each year, if the company does opt in.

Environmental groups and progressive think-tanks have long railed against Eraring receiving any lifeline.

'To keep Eraring open beyond its closure date will make the national job of decarbonising our energy grid all that much harder,' Australian Conservation Foundation climate policy adviser Annika Reynolds said.

Federal Energy Minister Chris Bowen in March said delaying Eraring's retirement would not imperil Australia's 2030 emissions reduction target.

Eraring was privatised under the former coalition government in a 2013 deal that resulted in Origin being paid $75 million to take over the ageing asset.

australia's largest coal-fired powerplant to remain open

Opened in 1984, the Eraing operation is Australia's biggest coal power plant (pictured)

NSW Energy Minister Penny Sharpe emphasised today's decision was a 'temporary and targeted agreement' to ensure reliability, however she said the state was still prioritising a transition to green energy.

'NSW is stepping up the transition to cheap, clean, reliable renewable energy. But to keep the lights on and prices down, we need to make sure new renewable infrastructure and storage capacity is online before coal-fired generators reach the end of their life,' she said.

'This temporary and targeted agreement will provide financial support only if it's needed, and only for as long as needed, during an orderly exit of coal-fired power.

'This is a proactive and sensible step to ensure a plan is in place, if needed, to avoid electricity outages and rising power prices.'

The government has stressed Thursday's announcement would protect NSW taxpayers.

'This agreement gets the balance right. It means the clean energy transition can continue without exposing families and businesses to extreme bill shocks during a severe cost-of-living crisis,' said NSW Treasurer Daniel Mookhey.

'Taxpayers are well-protected. We won't be handing over a $3 billion cheque to Origin as some said we would. Instead, this agreement incentivises Origin to only use the underwrite if there is a sudden change in market conditions.

'Had Eraring remained in public ownership, an agreement like this would not have been necessary.'

Read more

OTHER NEWS

31 minutes ago

Everything You Need to Know About the 6th House in Astrology

31 minutes ago

RBA likely to hold rates as price pressures loiter

34 minutes ago

The city Aussies are fleeing in droves - and the new location they are calling home

36 minutes ago

Southgate and Kane look ahead to Serbia match

36 minutes ago

Brian Masaba on Uganda's 9-wicket hammering by New Zealand

36 minutes ago

He once rode in the Titan submersible but didn't realize how close he came to death until a year after its fatal dive

36 minutes ago

Johns backs Moses-Walker pairing to level Origin series

36 minutes ago

The Requiem For Methuselah Scene Star Trek's DeForest Kelley Refused To Film

36 minutes ago

Should There Be A Cause For Concern Following Boston's 38 Point Loss?

37 minutes ago

Israeli military announces “tactical pause” in southern Gaza to allow deliveries of humanitarian aid

37 minutes ago

Israeli military announces 'tactical pause' in attempt to increase flow of aid into hard-hit Gaza

37 minutes ago

Taoiseach Simon Harris offers support to Rhasidat Adeleke over online abuse

37 minutes ago

5 Seconds of Summer singer Luke Hemmings rocks the stage as he plays his first ever solo show in his hometown Sydney

40 minutes ago

Dodgers' Yoshinobu Yamamoto leaves start vs. Kansas City after 2 innings due to triceps tightness

40 minutes ago

Environment Canada issues rainfall warnings for parts of northeastern B.C.

40 minutes ago

Andrew McCarthy Credits Molly Ringwald for Getting His Role in ‘Pretty in Pink'

40 minutes ago

Amid goading by Opposition, JD(U) backs BJP pick, TDP bats for ‘NDA face’

40 minutes ago

Residents and communities preparing for heat wave that will envelop Midwest and Northeast next week

40 minutes ago

Catherine returns as the Royal family unite at a Trooping like none before

40 minutes ago

Ukraine-US 10-year security deal: 5 key takeaways

40 minutes ago

WATCH: Browns Show Off 'Normal' Watson's 50-Yard Throw

40 minutes ago

France's Thuram urges fellow citizens 'to fight daily' to prevent far right from taking power

40 minutes ago

England keep T20 World Cup hopes alive after rain meant Scotland could have gone through instead

40 minutes ago

Games Inbox: Is the Elden Ring DLC too difficult for its own good?

40 minutes ago

Israelis take to streets of Tel Aviv to demand new elections and to protest against government

40 minutes ago

Toronto's largest Pow Wow shares Indigenous culture

40 minutes ago

Oilers’ McDavid, Draisaitl break dry spells on brink of elimination

40 minutes ago

Wildfire north of Los Angeles spreads as authorities issue evacuation orders

40 minutes ago

Conor McGregor in ‘good spirits’ after dropping out of UFC 303 with injury

40 minutes ago

Latrell Mitchell wins NSW spot in the centres for Origin II

40 minutes ago

Fire still burns for Ledecky as she makes fourth Olympics

40 minutes ago

Gleneagles’ little-known journey from hotel to nursing home to hospital

42 minutes ago

‘No place for antisemitism’ at Trinity College – university vows to strengthen messaging after bursary withdrawal

45 minutes ago

'Blue Collar' Wilson Reveals Impressions of Steelers, Queen

45 minutes ago

It’s no revolution, but five extremists will take seats

45 minutes ago

Serbia coach sees 'unbelievable' Bellingham as a future Ballon d'Or

45 minutes ago

Steelers Waiting On Cam Sutton's Punishment: 'There's A Specific Process In Place'

45 minutes ago

Troy Renck: Easy to see Broncos coach Sean Payton more comfortable in second season

45 minutes ago

Halfway Through The 24 Hours of Le Mans, Toyota Leads Porsche Under a Safety Car as Rain Continues

47 minutes ago

Desperate search is launched for missing sailor after boat overturned off Lady Elliot Island leaving his two passengers clinging to the side