Biggest Australia coal plant to shut early as renewables surge

Eraring Power Station. Credit: Wikipedia

Australia’s biggest coal-fired power plant is set to close seven years early, the latest fossil fuel retirement prompted by a surge of renewables that have driven down electricity prices.

Origin Energy Ltd. could shutter the Eraring facility, in a coal-mining region north of Sydney, as soon as August 2025 with the plant’s financial viability under threat. It follows rival AGL Energy Ltd., which last week announced plans to bring forward the closure of two of its coal plants.

“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,” Frank Calabria, Origin’s chief executive officer, said in a Thursday statement. 

Sydney-based Origin is assessing plans to install a giant battery with capacity of as much as 700 megawatts at the site, more than double the size of the country’s largest existing facility, Neoen SA’s Victorian Big Battery. 

Origin’s announcement is in line with a requirement to give three-and-a-half years’ notice before closing a major plant. The continued increase in renewables generation and strong uptake of rooftop solar is likely to worsen the attractiveness for existing coal and gas generators, BloombergNEF said Thursday.

The early closure of Eraring puts the affordability and reliability of the grid at risk, Energy Minister Angus Taylor said in a statement. Prime Minister Scott Morrison’s government is a staunch supporter of fossil fuels.

The 2,880-megawatt black coal plant about 120 kilometers (75 miles) north of Sydney can meet around a quarter of the power needs of New South Wales, Australia’s most populous state. It became fully operational in 1984. The proposed Eraring battery would be 460 megawatts in its first phase, rising to 700 megawatts, compared with AGL’s plan for an 850-megawatt battery by 2024 at the site of its Lidell coal plant. 

“Planned additional transmission capacity — including the announced battery — will give the state access to enough electricity generation to meet the Energy Security Target at the time Eraring closes,” Daniel Westerman, the chief executive officer of the Australian Energy Market Operator, said in a statement.

(By James Thornhill)

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