EnergyAustralia accelerates closure of Mt Piper coal plant ahead of ministers meeting

EnergyAustralia says it has brought forward the closure of the Mount Piper coal-fired power station in NSW by three years, as part of a plan to accelerate its exit from coal.

EnergyAustralia had originally indicated that the 1,400MW Mount Piper coal power station – near Lithgow – could operate until at least 2043.

But in a new Climate Change Statement published on Thursday, EnergyAustralia says it will now aim to transition entirely out of its coal generation assets by 2040.

This will see the power station close three years earlier than originally planned, and follows a decision by EnergyAustralia to bring forward the closure of the Yallourn power station in Victoria by four years, starting in 2028, after striking a deal with the Victorian government.

“The energy transition has significant impacts for our power station workers and our local communities,” EnergyAustralia managing director Mark Collette said in a statement on Thursday.

“While Mt Piper’s ultimate retirement date will be determined by several factors, we are committed to long term planning and supporting the transition for our workers and our local communities.”

“For our customers we need to ensure that we can maintain reliable, affordable and low emissions energy as the system transitions. This is a real-world challenge that we must meet by employing a range of technologies.”

The new statement details specific emissions reduction targets for EnergyAustralia, including a goal to reach net zero emissions by 2050 and an interim target of reducing its direct carbon dioxide emissions by more than 60 per cent by 2028-29.

Most of the interim target will be achieved through the closure of the brown coal fuelled Yallourn power station, which ranks as one of Australia’s most emissions intensive generators.

EnergyAustralia said that it would also look to invest in low emissions replacement infrastructure, including a 350MW four-hour big battery at the Yallourn site.

“We have, and will continue to make, significant investments as part of our commitment towards reaching net zero emissions. This includes projects such as our carbon neutral gas and hydrogen power plant in New South Wales, Tallawarra B, and the Wooreen battery at Jeeralang in Victoria,” Collette said.

EnergyAustralia has also signed an offtake agreement with the Kidston pumped hydro project, currently being constructed by Genex in Queensland.

“Our approach continues to be one of long-term planning, where we consult with governments and communities as we design and deliver our transition – while ensuring our 2.4 million customers maintain access to reliable and affordable energy,” Collette added.

Pointedly, the announcement comes just a day before federal, state and territory ministers are to meet to discuss proposed reforms to the National Electricity Market, including a controversial ‘capacity market’ proposal that would be designed to prevent the early closure of coal fired power stations.

It is understood that EnergyAustralia has been one of the strongest advocates for a proposed capacity market mechanism – as one of Australia’s largest operators of coal power stations.

The announcement, and its timing, will likely be seen as a means of placing pressure on a number of state and territory energy ministers who have spoken out against a capacity mechanism that is intended to keep coal plants operating for longer.

That mechanism is being opposed by energy ministers from the ACT, New South Wales and Victoria.

NSW energy minister Matt Kean says he favours bilateral talks with companies to manage coal exits, just as Victoria had done over Yallourn.

You can read RenewEconomy’s preview of Friday’s meeting of energy ministers here.