Australia’s largest energy retailer Origin Energy has given its clearest hint yet that it may not close the country’s biggest coal fired generator, Eraring, in August, 2027, as flagged.
Origin chairman Scott Perkins on Wednesday described August, 2027, as a “potential stop” date, with a “hard stop” date of April, 2029. “We remain in discussions with the NSW government about market considerations,” he told the annual general meeting.
The comments will heighten speculation that the 2.88 GW Eraring coal generator will not be closed in August, 2027, as currently advised to the Australian Energy Market Operator. The coal generator is generating profits, Perkins confirmed, and Origin has done nothing to replace its capacity with new wind and solar before then.
Origin in 2022 announced the planned “early” closure of Eraring in August, 2025, but the NSW state Labor government – concerned by a potential shortfall of supply, or more likely higher prices – agreed to underwrite a two year extension to the closure date.
NSW offered up to $450 million to Origin but the company says the generator is so profitable that it has not tapped into that government support (it would have to share profits above a certain level with the state government).
“At the moment Eraring is profitable,” he said, but added that “over the medium term”, it is “economically very very challenging.”
Earlier, he said: “We will continue to assess the market requirements over time.”
The big question is if Eraring will be closed on August, 2027, or in April 2029. It is a crucial question for AEMO, for the state government, for other coal generator owners, for the developers and owners of big batteries, and those trying to build new wind and solar.
Origin has vowed to build 4-5 GW of new renewables and storage by 2030 – compared to the more than 12 GW by 2032 proposed by spurned suitor Brookfield – but has largely focused on battery storage, which helps it balance its portfolio and control prices.
This includes the Eraring battery, to be the biggest in the country – at least for a while – at 700 MW and 2,800 MWh, and the smaller 300 MW, 650 MWh Mortlake battery, as well as battery off-take agreements for the Supernode battery in Queensland and the Summerfield battery in South Australia.
The only renewable project it has advanced to any great extent is the Yanco Delta wind project in the south-west of NSW. It has won grid access rights, but Origin is still not yet committed to building it, and won’t make a decision until 2026.
That means the 1.4 GW project has no hope of being completed before August, 2027, and possibly not by April, 2029. Origin is also developing a major wind project and battery called Northern Tablelands in New England, but that will also not be completed before the early 2030s.
“Until there is sufficient renewable generation …. Eraring is playing a vital role in the stability and security of the NSW energy system,” Perkins said in response to a question from Nature Conservation Council energy and climate expert Jacqui Mills.
Earlier, Perkins had said noted the “contrast” between an increase in announced renewable projects and the realities of further delays in project delivery which he said was driven by regulatory approvals, cost inflation, and the timing of enabling infrastructure.
“The level of investment, activity and change is also creating additional complexity in the energy market, affecting communities, and putting upward pressure on energy and network costs to consumers,” he said.
“It has become clear that the energy transition will neither be easy nor linear and it will be a multi-decade challenge with the hardest part of the journey ahead.”
Origin’s updated Climate Transition Action Plan received support from nearly 95 per cent of votes cast at and before the AGM.
The NCC’s Mills later issued a statement, accusing Origin of holding climate targets and customers to “ransom” with expensive, polluting energy generation.  Â
“Their failure to rule out closing Eraring coal fired power station in 2027 kills renewable energy investment,” Mills said.  “Whilst Origin Energy executives tout their climate action plan, the reality is that the company does not have a single operational solar or wind farm. ”
Stephanie Bashir, the CEO of Nexa Advisory, said extending Eraring beyond its used by date would lock in higher costs for consumers, more emissions, and greater uncertainty for investors in NSW.
“The State government should be focused accelerating renewables, focusing on transmission solutions in areas beyond the Renewable Energy Zones and deploying virtual transmission – such as batteries,” Bashir said.
“Nexa Advisory is calling on governments and market participants to mobilise the massive pipeline of clean energy projects waiting for approval and investment in New South Wales — including 44GW of large-scale solar and wind, and 16GW of battery storage.
“If the government doesn’t do this, its Plan B isn’t Eraring – it will be gas, which comes at a significant cost to energy consumers.”
