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Newcastle Herald
Newcastle Herald
Matthew Kelly

Eraring output hits five-year high amid slow renewables roll-out

Eraring power station supplies about a quarter of the state's energy needs. Picture by Peter Lorimer.

Eraring power station's output hit a five-year high last financial year in response to government initiatives to put downward pressure on power prices.

The 2880-megawatt generator ramped up output by 2.1 terawatt-hours to 14.3 terawatt-hours in the year to June 30.

Origin's quarterly report noted that it ran harder in the June quarter due to a "drought" in wind generation early this winter.

Eraring was among a number of ageing coal-fired power stations that ran harder in response to a prolonged stretch of cold weather that drove up energy demand for heating.

The state government had no option but to enter into an agreement with Origin in May to extend Eraring's life by two years until 2027 because of the slow roll-out of renewables.

Under the deal, Origin can be compensated up to $225 million a year if the plant runs at a loss, and will pay the government a portion of its operating profits, capped at $40 million, if it makes money.

Eraring ramped up output by 2.1 terawatt-hours to 14.3 terawatt-hours in the year to June 30.

Eraring's increased output in 2023-24 was also driven by the government's decision to cap the price of black coal last year, in an effort to incentivise power supply and protect consumers from rising energy costs resulting from Russia's invasion of Ukraine.

"In energy markets, Origin's generation fleet performed strongly during the year, with high levels of reliability. Output from Eraring rose by 2.1 TWh to 14.3 TWh, supporting policy aiming to increase generation to help put downwards pressure on electricity prices, while the gas peaking fleet increased output and continued to play an important role supporting the grid and maintaining reliable supply for customers," Origin chief executive Frank Calabria said on Tuesday.

A coal supply crisis was averted in June when Origin and Centennial Coal, which owns the Myuna and Mandalong collieries, stuck a short-term deal to supply Eraring for six months following the end of the last contract.

The short-term agreement leaves Origin open to continue to negotiate with Centennial on a longer-term deal or chase coal supplies from other mining companies beyond this year.

Mr Calabria said the company had also continued to rapidly expand battery storage, having now committed to 1.5 GW of owned and tolled battery projects.

Origin approved the second stage of its large-scale battery project at Eraring power station last month.

The $450 million second stage will add a 240 megawatt four-hour duration grid-forming battery to the 460 megawatt two-hour duration first stage development under construction.

The first stage is expected to come online at the end of the 2025 calendar year.

The combined energy storage of the two batteries will be more than two gigawatts, enabling Origin to help keep the grid stable and support more variable renewable energy coming into the system.

Origin has executed agreements for equipment supply and construction, with works on the second stage scheduled to begin early in the 2025 calendar year.

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