Origin Energy is proposing to accelerate its exit from coal-fired power generation, announcing the intended early closure of Eraring Power Station—Australia’s largest coal plant—in 2025.
Origin CEO Frank Calabria said, “Origin has today submitted notice to AEMO for the potential early retirement of Eraring Power Station in August 2025.
“Origin’s proposed exit from coal-fired generation reflects the continuing, rapid transition of the NEM as we move to cleaner sources of energy. Australia’s energy market today is very different to the one when Eraring was brought online in the early 1980s, and the reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower cost generation, including solar, wind and batteries.
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“To enable Origin to support the market’s continued transition to renewables, we intend to utilise the Eraring site beyond any retirement of the coal-fired power station, with plans to install a large-scale battery.
“We have carefully weighed Eraring’s future for some time, which has included extensive consultation with the NSW government to identify what options might exist for the future of the plant. Eraring is a high-quality asset, run by a skilled and dedicated team, that has worked tirelessly to supply reliable and affordable energy in NSW for four decades. However, it has become increasingly clear over the last few years that the influx of renewables has changed the nature of demand for baseload power.
“At the same time, the cost of renewable energy and battery storage is increasingly competitive, and the penetration of renewables is growing and changing the shape of wholesale electricity prices, which means our cost of energy is expected to be more economical through a combination of renewables, storage and Origin’s fleet of peaking power stations.
“The mechanisms are now in place to guide future investment in supply, including the NSW Roadmap, and firm commitments have been made for other dispatchable capacity to come into the market over the coming years, as well as new transmission infrastructure, which are expected to more than compensate for any exit of Eraring.
“We will continue to assess the market over time, and this will help inform any final decisions on the timing for closure of all four units.
As part of any replacement plan for Eraring, Origin has well-progressed plans for a battery of up to 700MW located on the site. Origin looks forward to participating in the NSW Government’s Electricity Infrastructure Roadmap process, as appropriate, to support installation of as much of this battery as possible, before any closure of the Eraring coal-fired power station. Origin will also seek to bring online additional renewable and storage capacity, including a potential expansion of the Shoalhaven pumped hydro scheme, through the NSW Roadmap process.
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Dr Madeline Taylor, Climate Councillor, Senior Lecturer at Macquarie University, School of Law and energy expert, said, “Coal is not a commercially viable industry any longer. Just like AGL last week, this is a commercial decision made by Origin Energy to close its Eraring coal power station seven years early.”
“Some of Australia’s biggest power companies are not able to compete from a price perspective and policy perspective, as the states and territories cash-in on a net zero future, bringing with it cheaper renewable power, economic investments and new clean jobs. The newly announced Hunter-Central Coast Renewable Energy Zone (REZ) is set to provide 100 Terawatt hours of power by the mid 2020s, which is almost double the generation of NSW’s entire coal fleet. The new Hunter REZ is just one of the state’s four proposed REZs.”
“Coal is not going to cut it anymore when we have cheap and reliable renewable energy and storage that’s already powering over a third of Australia’s largest electricity grid and providing almost 25 per cent of NSW’s power.”
