Australia’s largest coal-fired power station will close in 2025 – several years ahead of schedule – operators announced on Thursday, saying the facility was no longer viable given the low cost of renewables.
Origin Energy has told investors that the “influx of renewables” is “sapping the economy” of the sprawling, decades-old Eraring plant just north of Sydney.
Australia is one of the world’s largest coal producers and the climate-polluting fuel is a major source of export revenue, with the current administration backing more such plants.
“Today we signaled the possibility of accelerating the Eraring shutdown through mid-2025,” Origin Energy CEO Frank Calabria said, acknowledging the move would be “difficult” for hundreds. of employees.
The plant has been operational for nearly 40 years and was scheduled to be decommissioned in 2032.
“The reality is that the economics of coal-fired power plants are under increasing and unsustainable pressure from cleaner, lower-cost generation, including solar, wind and batteries,” Calabria said.
The plant currently includes four 720 megawatt coal-fired generators and one 42 megawatt diesel generator, supplying New South Wales’ most populous state with around a quarter of its electricity.
The company has a 240 million Australian dollars (173 million US dollars) plan to repurpose the plant and install a large 700 megawatt battery.
Origin is the latest Australian energy producer to announce the early closure of coal assets, despite the Conservative administration’s insistence on backing new coal projects.
Several coal mines and factories are also located in hotly contested electoral seats, meaning the government and opposition Labor Party have tried to avoid angering pro-coal voters.
The mining and energy union said Eraring workers had been “blindsided” by the decision.
“For the many families in Lake Macquarie and Hunter Valley who depend on the Eraring Power Station for their livelihoods, today’s announcement creates uncertainty for the future,” said union representative Robin Williams.
– “A dying industry” –
Pro-coal governing coalition MP Matt Canavan said the shutdown “is going to be a disaster”, predicting high energy prices.
Energy Minister Angus Taylor, who has backed ratepayer investment in new coal plants, has pledged to ensure a “like-for-like replacement” for the plant.
The move “jeopardizes accessibility and reliability,” he tweeted.
Monash University energy expert Ariel Liebman said that while Origin Energy’s decision was made for commercial reasons, it signaled a wider shift in how Australians get their energy.
“Everything aligns to continuously accelerate the energy transition to renewables,” he said.
Any price spike resulting from the shutdown is likely to be short-lived, he added.
“Rising energy prices are unlikely to last long as this announcement will advance several major wind and solar projects. It may even finally spark an offshore wind revolution in Australia.”
Environmental groups applauded the news, but other experts warned it underscored the need for Canberra to face the reality that coal-fired power stations will soon be a thing of the past.
“These decisions are entirely economic and closures inevitable,” said Richie Merzian, climate and energy expert at the left-leaning think tank Australia Institute.
“There are thousands of workers in Australia’s coal-fired power stations. They deserve certainty,” he said.
“Australian policymakers must plan to care for communities and workers in coal-burning regions, rather than sell false hopes trying to prop up a dying industry.”