Government advisors believed that Origin was “socially responsible” and wouldn’t shut the plant down in 2025 if the market needed the supply. Two months later, the energy giant flagged plans to close the plant.
The NSW government considered a pitch to buy the loss-making Eraring Power Station in secret talks with Origin Energy last year. But the deal fell apart amid government concerns that underwriting a plan to keep the coal-fired power station open longer could “crowd out” other investments in energy.The Eraring coal-fired power plant in the federal seat of Hunter, NSW.
“The market shift to renewable energy coupled with commitments to build more dispatchable capacity means Eraring is already loss making and this position will deteriorate over the decade,” an Origin briefing pack to the government stated.“We recognise the implications of the Eraring closure and we have developed a proposal to support the state in minimising disruption and mitigating the impacts on security and pricing.
Part of the deal included Origin committing to a building an 800MW, two-hour battery next to the plant and potentially expanding a Shoalhaven pumped hydro facility.By November, the government said it could decide ahead of Origin’s half-year results in February. But by December the deal had fallen over, and Origin walked away citing uncertainty about the retirement date and other issues.
A note prepared by the Department of Planning, Industry and Environment on December 8 reasoned that the power station was “not expected to be needed for price or reliability beyond June 2025” and that extending its operation beyond 2025 could expose consumers to unnecessary costs while “outcrowding” other investments.
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