Operation of Australia’s Largest Coal Power Station Extended to 2029

Origin Energy has extended the deadline for the closure of the Eraring power station. It was originally slated to shut down in 2025.

Eraring coal-fired power station, the largest in Australia, on the shores of Lake Macquarie southeast of Newcastle in New South Wales, Australia. Nick Pitsas/CSIRO

The 2,880-megawatt Eraring coal-fired power station will continue to operate until 2029, operator Origin Energy has announced.

The facility is the country’s largest power station by output and is situated on the banks of Lake Macquarie, north of Sydney in New South Wales (NSW).

In an announcement to the ASX (pdf), Origin said the move would reduce risks to system security, highlighted by the Australian Energy Market Operator (AEMO) in its recent Transition Plan for System Security.

That report warned that, in NSW alternative energy assets required to “maintain system security are not currently scheduled to be operational before the announced retirement date of Eraring Power Station.”

“We’ve taken the decision to extend Eraring’s operations after assessing a range of factors, including the needs of our customers, market conditions and the important role the plant plays in the NSW energy system,” Origin CEO Frank Calabria said.

“Good progress has been made on the delivery of new energy infrastructure, including major transmission works and projects like our large-scale battery at Eraring, but it has become clear Eraring Power Station will need to run for longer to support [a] secure and stable power supply.”

The decision is aimed at providing more time for the delivery of renewables, storage, and transmission projects, he said. It also reflected uncertainty about the reliability of Australia’s ageing coal and gas fleet.

The company originally planned to close it in 2025, then extended it to August 2027 after the NSW Labor government struck a $450 million risk-sharing deal for the ageing facility, which committed the state to covering a percentage of losses up to $225 million per year if given advance notice by Origin.

About half of Australia’s national electricity grid is powered by black coal-fired power stations such as Eraring.

Government Welcomes Extension

The state’s Minister for Energy Penny Sharpe welcomed the announcement in a statement.

“My number one job is keeping the lights on and putting downward pressure on power prices. NSW is making real progress in replacing ageing coal-fired power stations. Since the election, we have increased the amount of renewable energy capacity in operation by almost 70 percent. That’s equivalent to Eraring’s capacity,” Sharpe said.

“Current energy security projections show NSW is expected to have sufficient energy supply when Eraring closes in 2029, thanks to new renewable generation and storage coming online.

“The agreement reached with Origin in 2024 gets the balance right and has so far not cost NSW taxpayers a single dollar.”

The guarantee is due to expire in August 2027.

Extending Eraring’s life is not expected to affect Origin’s 2030 emissions reduction targets or its long-term ambition to achieve net zero by 2050, the company said.

Beyond 2029, Eraring will remain a part of the National Electricity Market thanks to its battery, the first stage of which commenced commercial operation in 2025, with the final stages expected to come online in the first quarter of 2027. Once all stages are complete, the battery will deliver 700MW, providing an average storage capacity of 4.5 hours.

The power station first started operating in 1984, and Origin paid $75 million to take it over when it was privatised in 2013.