Australia’s largest power station will stay open until at least August 2027, after it was scheduled to close in 2025.
The Eraring Power Station is a black coal-fired station near Newcastle, NSW. It generates almost 20% of the state’s power supply.
In 2022, its operator Origin Energy announced plans to close the site as part of the company’s renewable energy transition.
However, the planned closure has been pushed back to 2027 after Origin and the NSW Government reached a two-year extension deal.
Eraring extended to 2027
The NSW Government said the delayed closure will avoid projected supply shortages as the state transitions to renewables.
Origin could be compensated up to $450 million for keeping Eraring open until June 2027. The State Government could receive up to $80 million of Eraring’s profits over the next two years, if it’s profitable.
Eraring must shut entirely by April 2029, as part of the Government’s plan to reach a 50% emissions reduction target by 2030.
Origin Energy
In a statement to shareholders on Thursday, Origin CEO Frank Calabria said the extension agreement “strikes the right balance” between the interests of the NSW people and Eraring.
“Origin does not shy away from the need to exit coal generation as soon as there is sufficient renewable energy… available.”
Energy shortages
The Eraring extension comes two days after the Australian Energy Market Operator (AEMO) forecast national power supply shortages in the coming years.
AEMO specifically mentioned the planned 2025 closure of Eraring as a factor that could worsen energy supply vulnerabilities.
It also flagged delays to renewable projects in NSW as concerning.
NSW Government response
NSW Energy and Environment Minister Penny Sharpe said keeping Eraring open would “ensure the lights stay on” in NSW and help the state avoid supply chain uncertainties.
Sharpe said the plan would also prevent a surge in electricity prices and blackouts in NSW across the coming years.
Opposition response
NSW Opposition Leader Mark Speakman said the Government has mismanaged the state’s energy supply.
Shadow Energy Minister James Griffin said the Eraring extension was poorly negotiated by the Government.
He called it “a good deal for the operator of the power station but not a good deal for citizens of this state”.
The Climate Council and the Australian Conservation Foundation both raised concerns about the environmental implications of the decision.
