Origin Extends Life of Australia’s Largest Coal Plant Again
(Bloomberg) -- Origin Energy Ltd. will delay the retirement of Australia’s largest coal-fired power station by almost two years to ensure stable energy supply through the roll-out of renewable generation.
The operation of all four units at the Eraring Power Station in New South Wales will be extended to April 30, 2029, according to a statement from Origin on Tuesday. The black coal-fired plant, which supplies a quarter of the state’s electricity needs, had been scheduled to close in August 2027.
“It has become clear Eraring Power Station will need to run for longer to support secure and stable power supply,” said Origin Chief Executive Officer Frank Calabria. The decision “provides more time for renewables, storage and transmission projects to be delivered,” he added.
Eraring was initially slated to close as early as August 2025 as competition from cheaper solar and wind facilities eroded profitability, but that plan was delayed by two years after Australia’s main grid operator flagged the state would face energy reliability risks as a result. Origin shares edged higher in Sydney.
Australia’s coal-fired fleet fulfills a large part of the country’s power needs, but about 75% of capacity is set to retire over the next decade as old plants become increasingly inefficient and incompatible with emissions targets, according to BloombergNEF. However, the rollout of renewable energy has been slower than anticipated, with delays to crucial projects such as Snowy Hydro 2.0.
The extension of Eraring’s life could reduce future wholesale electricity pricing in the state, RBC Capital Markets analyst Gordon Ramsay wrote in a note, adding that the delay was “no surprise.”
“My number one job is keeping the lights on and putting downward pressure on power prices,” Penny Sharpe, the state minister for energy and climate change, said in a statement. “NSW is making real progress replacing ageing coal-fired power stations.”
Origin doesn’t intend to invest in any further major maintenance overhauls ahead of the plant’s retirement, and the extension is not expected to affect the company’s 2030 emissions reduction targets, the company said.
Eraring is about 120 kilometers (75 miles) north of Sydney and has overall generating capacity of about 2,922 megawatts, according to Origin’s website. The plant was fully commissioned in 1984.
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