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Newcastle Herald
Newcastle Herald
Matthew Kelly

Eraring power station's life may be extended again, Origin chief suggests

Eraring Power Station may stay open beyond 2027.

Eraring power station may need to stay open beyond 2027 in order to meet a forecast increase in demand for baseload power, the head of Origin Energy Frank Calabria has suggested.

Origin finalised a deal with the NSW government in May to keep the coal-fired generator open for an extra two years, by which time it is hoped enough clean energy infrastructure will be in place to support the grid.

But the impact of electrification, the uptake of electric vehicles and the rise of data centres meant demand for baseload power was rising rapidly, an Origin investor update on Thursday heard.

Mr Calabria was asked during update about the possibility of keeping the 2880-megawatt plant running until April 2029, given it covers a quarter of the state's power.

He said volatile markets meant Eraring could run "for as long as it is needed" and "at least" until August 2027, with that closure date to be reviewed in coming years.

"It would require us to be assessing the market, and also the government as well," he said.

Origin announced in 2022 that it was bringing the closure date, which had been slated as 2032, forward by seven years.

Under the recently settled deal with the state government, 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.

The Newcastle Herald reported earlier this month that Eraring's output hit a five-year high last financial year in response to government initiatives to put downward pressure on power prices.

Frank Calabria.

The plant 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.

Thursday's investor briefing also heard pipeline constraints meant not enough Queensland gas was getting to NSW, Victoria and South Australia. As a result, Mr Calabria warned the industry eyeing import terminals at Port Kembla, Geelong and Port Adelaide.

"We'll need more supply into the market, particularly to supply those southern states ... we certainly feel that LNG imports are going to play a major role," he said.

Mr Calabria said the company's balance sheet remained strong, with good cash generation supporting higher dividends and investments in big batteries, wind and solar.

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.

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