Australia’s largest coal-fired power station is unreliable and driving up electricity prices, according to a new report that argues against the viability of keeping coal plants open beyond their scheduled closure dates.
The report from clean energy consultancy group Nexa Advisory questions the wisdom of a New South Wales government deal to extend the life of the Origin Energy-owned Eraring.
Last year, the state’s Labor government struck a deal with Origin to keep the 43-year-old coal plant open for an additional two years, until August 2027.
Eraring is the largest coal-fired power station in the country, supplying NSW with about a quarter of its electricity needs.
Under the agreement, the state government agreed to cover Origin’s operational losses of up to $225 million a year from 2025.
Origin Energy has until the end of this month to opt into the underwriting deal for 2025-26.
The NSW government’s move to extend the life of Eraring followed concerns that the state would struggle to keep the lights on, after Origin announced it would bring forward the plant’s closure by seven years, to August 2025.
While Origin has said Eraring’s operations will not be extended beyond April 2029, energy experts say that timeline leaves the door open to further taxpayer support, beyond the current deal that runs until 2027.
Nexa Advisory’s report argues against further taxpayer assistance for Eraring, given the plant’s “unreliability” due to frequent outages.
Nexa analysed the performance data of Eraring and found each of its four units had experienced about 6,000 hours, equivalent to two months, of downtime annually over the last four years and that these outages had affected the plant’s availability when it was needed most.
“While there is variability across units each year, there has been a steady upward trend in overall downtime since 2017,” report author Stephanie Bashir says.
Ms Bashir is a former AGL executive and the founder of Nexa Advisory, which consults private and public clients including renewable energy firms, investors and climate groups.
“Importantly, the high outages in the second and third quarters coincide with peak demand periods, during which planned downtime would typically be expected to be minimal.
“Its frequent unplanned outages and downtime are clear indicators that it is no longer fit for purpose and that is costing consumers.”
The report on Eraring comes as a federal election looms, with the viability of keeping the nation’s aging coal-fired power stations going for longer under the Coalition’s nuclear plan among the issues on the table.
Coal outages push up energy prices
As coal plants age, planned and unplanned outages have become more frequent.
When outages occur it pushes up wholesale electricity prices because more expensive forms of power, like gas, are then relied upon to meet demand when renewables cannot.
Those price increases are eventually passed onto households and businesses.
