Energy Company Bets Big on Australia’s Largest Battery as Major Coal Power Plant Set to Close

An Origin Energy power bill is pictured in Brisbane, Australia on June 8, 2018. (AAP Image/Dan Peled)

One of Australia’s largest coal-fired power stations—that supplies a quarter of New South Wales’ (NSW) energy needs—will soon close and be replaced by the country’s largest battery in the rush to reach net-zero.

On April 20, Origin Energy, one of the “Big Three” energy providers, servicing 4.2 million households and businesses, said it would spend around $600 million (US$403 million) to construct a battery system at the site of its Eraring Power Station.

The company said it had finalised agreements with its business partners, and construction work will commence in the next few weeks.

In the first stage of the construction, Origin plans to build a 460-megawatt battery storage system with a dispatch duration of two hours by the final quarter of 2025.

The company also reserves the option to expand the system’s capacity to 700 megawatts and four hours dispatch duration in the future.

Finnish technology group Wärtsilä will supply battery equipment, while Enerven, a subsidiary of SA Power Networks, will be responsible for the design and construction of the project.

The Department of Planning and Environment of NSW approved the project’s initial planning in May 2022.

A Fluence Cube stands adjacent to the AES Alamitos Battery Energy Storage System in Long Beach, California, on Sept. 16, 2022. (Patrick T Fallon/AFP via Getty Images)

Origin CEO Frank Calabria said the battery project was a significant step toward the company’s strategy to lead the energy transition and accelerate net zero.

“We are pleased to make this significant capital investment in Origin’s first major battery project to support the growth in renewable energy that’s occurring across the National Electricity Market, together with the expansion of our own portfolio of renewable energy developments,” he said in a statement.

Meanwhile, Origin’s head of energy supply and operations, Greg Jarvis, praised the project’s location, saying it was a strategic site that could deliver energy to major demand centres.

“Development of the Eraring battery is a key next step as we look to transform the Eraring site for the future, given our intention to exit coal-fired generation by as early as August 2025,” he said.

Eraring Power Station Shutting Down Earlier

The moves come as Origin moves to retire its Eraring Power Station early, raising concerns around energy security and prices in Australia’s most populous state NSW.

In February 2022, the company submitted a notice to the Australian Energy Market Operator saying it would shut the power station down by August 2025, seven years ahead of the original schedule.

Origin cited “increasing, unsustainable pressure by cleaner and lower cost generation” and its transition to renewable energy generation as the main reasons for the closure.

The 2,880-megawatt coal-fired power station has been operating since its inception in 1984 and supplies around a quarter of NSW’s electricity needs.

Origin acquired the power station from the NSW government in 2013 for $660 million.

As it announced the construction of the battery, Origin said it would continue to assess market conditions to determine the timing of Eraring’s closure.

Meanwhile, the NSW government acknowledged the challenge caused by the early closure of Eraring and other power stations in the state.

“We know that there’s a big challenge coming around the corner ... particularly in relation to Eraring, (with) baseload supply of power in the state of NSW,” Premier Chris Minns said.

While the government has not ruled out intervening to keep Eraring open, the premier said his government had to consider the commercial aspect of energy production.

“It’s important that electricity consumers in this state have a steady, reliable source of power, and there’s big challenges there in terms of the renewable energy revolution,” Minns told reporters.

“We believe that if we get the pathway right, we can put downward pressure on bills and make sure that energy is reliable.”