Origin Energy’s decision to extend the life of the Eraring power station to 2029 has underscored the urgent need to accelerate investment in renewable energy, storage, and transmission infrastructure. According to the Clean Energy Council, this move highlights the importance of a smooth energy transition to ensure system security as Australia’s ageing coal-fired power plants continue to retire. The Clean Energy Council is the peak industry body representing the wind, solar, pumped hydro, and energy storage sectors. It advocates for policies that support the growth of clean energy in Australia.
Chief Executive Jackie Trad emphasised the increasing unreliability and costliness of older coal power stations, which directly impacts consumers through heightened volatility. She noted that the average age of coal-fired generators in the National Electricity Market is 38 years, nearing the historical retirement age of 44, thus increasing the risk of operational failures. Recent wholesale price spikes have been significantly influenced by unexpected outages of large coal units, some with a capacity of 1500 MW.
These outages have contributed to substantial market volatility, with wholesale electricity prices in New South Wales surging from approximately $70 per MWh in October to $220 per MWh. RBC analyst Gordon Ramsay commented that Origin’s decision aligns with its strategy to manage its largest generation asset, considering the slower-than-anticipated deployment of renewable energy projects.
Ramsay suggested that the extension of Eraring’s operations could potentially mitigate future wholesale electricity price increases in NSW, which might have been more pronounced had the plant closed as initially planned in August 2027.
