Media release on the NSW Government decision to extend Eraring coal power station
Melbourne, May 23, 2024 — Today the NSW Government and Origin have announced the extension of the 42-year-old Earing coal power station. The NSW people will pay up to $450 million to extend the ageing power station for 2 years to 2027.
This decision comes as the NSW government seeks to ensure reliability in the state following the reliability gaps identified by Australian Energy Market Operator (AEMO).
In its latest update to the 2023 Electricity Statement of Opportunities (ESOO), AEMO the predicts a reliability gap following Eraring Power station’s exit of 510 MW in 2025-26, up from 191 MW in the 2023 ESOO. Crucially however, AEMO indicates that the Federal Government’s expanded Capacity Investment scheme (32 GW) and State Governments’ Renewable Energy Zones can largely mitigate this reliability gap.
Nexa Advisory is deeply disappointed with the NSW government’s decision to extend the operation of the Eraring coal power station until August 2027, with the potential for a further extension to 2029. This move is a band aid solution that has far-reaching implications for investor sentiment, renewable energy targets, and the energy transition overall. We are yet to see practical action to expedite the transition and get the New South Wales Electricity Roadmap back on track.
Stephanie Bashir, CEO of Nexa Advisory, says that ending up here is unnecessary and that the New South Wales Government needs to speed up the transition to renewables, providing confidence in their ability to meet legislated renewable targets.
This extension is a desperate move, driven by the government’s inability to learn the lessons of the earlier Liddell closure.
Nexa Advisory’s recent analysis reveals that energy consumers in New South Wales are set to pay an extra $106 each per year by 2027 than they would if the state government had enabled a faster, orderly rollout of renewable energy generation and storage.
The announcement today of up to $450 million payment to Origin over 2-years, is an additional burden on New South Wales taxpayers.
The NSW Energy Roadmap was a leading light on progressing the clean energy transition, but today that Roadmap lies in tatters as the NSW government panics and takes a huge backwards step.
We call on the NSW government to act with urgency and ambition to get the NSW Roadmap back on track.
See our full media release here: NSW Govt to Get on with the real on- Nexa Advisory Media release 23052024
