Origin Energy has proposed to accelerate its exit from coal-fired power generation, having submitted notice to the Australian Energy Market Operator (AEMO) for the potential early retirement of Eraring power station in August 2025.
Eraring, a 2880MW black coal plant on the shores of Lake Macquarie, was previously targeted to close by the end of its technical life in 2032.
A retirement of Eraring power station in mid-2025 would remove a significant proportion of Origin Energy’s Scope One emissions, delivering on their commitment achieving the goals of the Paris Agreement ahead of 2030. It also reflects the rapidly changing conditions in the National Electricity Market (NEM) as traditional baseload power stations become less suitable.
“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,” Origin Energy CEO Frank Calabria said.
“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.”
Origin Energy has well-progressed plans for a battery of up to 700MW located on the site and will participate in the NSW government’s Electricity Infrastructure Roadmap process to support the battery’s installation prior to the power station’s potential closure. Origin Energy also plans to bring additional renewable and storage capacity online.
Origin Energy’s current restoration and rehabilitation provision for the Eraring site is approximately $240 million, based on the previous closure date. These costs will continue to be reviewed and are expected to be incurred over several years after any closure, with the timing partially dependent on the battery investment and ongoing ash dam operations.
“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 (of the power station),” Calabria said.
“Businesses and the community generally can take comfort from the fact that the market operator has a well-advanced plan for the electricity system to operate efficiently as these coal retirements accelerate, and the NSW and Commonwealth governments have taken steps to secure investment in replacement generation and flexible resources,” Ai Group chief executive Innes Willox said.
“As an element in a larger transition, employees and businesses affected by the closure will need support to move into other activities.”
According to Calabria, Origin Energy will consult with the Eraring workforce regarding the timing of any potential closure and provide a generous support package during the transition period, including re-skilling, career support and redeployment into new roles.
“We acknowledge this news will be challenging for many of our colleagues, suppliers and the local community,” Calabria said. “This is only the start of the process, and we commit to consulting with our people, and supporting them, through any potential closure.”
For further information on the potential closure, click here.