SYDNEY, AAP — Origin Energy has come under fire from the federal government for accelerating the shutdown of Australia’s largest coal-fired power station.
The Eraring power station at Lake Macquarie will close in August 2025, up to seven years ahead of schedule, and will be replaced by a full-scale battery.
“This decision is bitterly disappointing for all energy consumers – from households to small businesses to heavy industry – who rely on affordable and reliable energy to thrive,” the federal energy minister said Thursday. Angus Taylor.
“It is also bitterly disappointing for the 400 workers and communities in the Lake Macquarie region.”
Origin Energy has told the Australian Energy Market Operator that it plans to close the Eraring power station before 2032, when the asset is expected to reach the end of its technical life.
This cannot be done any faster than 2025, due to the need to give advance notice to the market operator.
Chief executive Frank Calabria said the federal minister, whom he spoke to last night, was aware of the plans.
“We both have common goals to make sure the transition is successful,” he said on a conference call.
“We’re very focused on what we think is the right thinking to do over time for customers and Origin.”
Mr Calabria said there was “more than enough” supply in the electricity market to offset Eraring’s exit.
“It’s a rapidly transitioning market.”
He said closing the factory would allow Origin to deliver on its commitment to help meet the Paris Agreement’s emissions reduction targets “well before” 2030.
“We have been clear about our strategy and our ambition to lead the energy transition.”
The Origin boss said the 240 workers on site would receive one-on-one support to retrain or upgrade their skills, redeploy through Origin, and would be on the front line to play a part in dismantling the factory and restoring it. drums.
Origin will also work with contractors, is in talks with unions, and also plans to create a local community fund.
Mr Calabria said the influx of renewable energy sources has changed the market and the traditional base coal that came online in the early 1980s will no longer be suitable.
“The reality is that the economics of coal-fired power plants are under increasing and unsustainable pressure from cleaner, lower-cost generation, including solar, wind and batteries.”
A world beyond Eraring will see a lower cost of energy and its supply will also be less capital intensive, he said.
The Eraring site will remain in the hands of Origin, which will install a large-scale 700 MW battery to operate beyond the shutdown date.
Plans for the battery are “well advanced” as the company sees the site as the best location, but the timing is not yet certain.
Mr Calabria insisted the plans were “not forced” by state government energy policy, but rather by the rapid transition and the need for security of electricity supply.
He said Origin was working closely with the NSW government on how the timing of the factory closure would fit into the overall energy transition roadmap.
Mr Taylor said the early and sudden shutdown would leave a huge gap in reliable generation in the national electricity market, accounting for more than 20% of NSW’s generation output.
“It is likely to increase prices, like the 85% increase we saw after the Hazelwood power station closed, and a less reliable grid,” he said.
Mr Calabria said the increase in renewable energy generation was affecting wholesale electricity prices.
“Our energy cost should be more economical through a combination of renewables, storage, and Origin’s peaking power plant fleet,” he said.
Australasian Center for Corporate Accountability spokesman Dan Gocher said Origin had finally recognized market signals on power generation.
“Origin’s plans to install a 700MW battery at the Eraring site confirm that the future of the power grid will be dominated by battery-backed renewables and pumped hydro – not gas” , did he declare.
Origin expects the cost to restore and rehabilitate the Eraring site to be approximately $240 million.
Eraring is a 2880 MW black coal power plant and has four units. It became fully operational in 1984.