Environment groups and health professionals believe the closure of Liddell Power Station will result in immediate health benefits to surrounding communities through reduced exposure to mercury, sulphur dioxide, and fine particle pollution.
National Pollution Inventory data shows the 52-year-old power station recorded a 170 per cent increase in mercury pollution from 16 kilograms in 2020-21 to 45 kilograms in 2021-22.
Mercury pollution from NSW coal fired power stations surged by 18 per cent last year, with AGL's Bayswater Power Station rated the state's worst for mercury pollution (112 kilograms).
Mercury is a neurotoxin which damages the nervous system, brain and other organs of humans and animals.
Sulphur dioxide pollution from Liddell also increased by 14 per cent from 2020-21 to 2021-22. Prolonged sulphur dioxide exposure may cause inflammation of the respiratory tract, wheezing and lung damage.
Fine particle pollution (PM2.5) from NSW power stations increased by 7 per cent. When inhaled, these particles can go deep into people's lungs and bloodstream.
"Children with asthma, and elderly people with respiratory problems, will breathe easier with reduced sulphur dioxide exposure once Liddell stops burning coal," Doctors for the Environment physician Ben Ewald said.
"Reduced exposure to fine particle air pollution will lead to improved birth weight for babies within nine months, however Liddell is just one of several large sources of fine particle air pollution in the upper Hunter Valley.
"That's why it's crucial that the NSW Government continues to oversee an orderly transition away from coal fired power and coal mining to a diversified economy with renewables at its centre - which is better for everyone's health."
Only 1 per cent of the world's operating power stations are now older than Liddell.
NSW EPA chief executive Tony Liddell said the agency would take a proactive approach to ensure ageing coal-fired power stations complied with their environmental licence conditions.
"Each of these sites is a critical part of the economy today but we need to make sure they are meeting their environmental obligations," he said.
"As these plants age and become more expensive to maintain, if anything, our focus needs to heighten to make sure the plant owners are meeting their obligations even if it costs them more to do it."
"But there's a second relationship, which is equally critical. We need to work with those owners and stakeholders to ensure those sites become investment destinations, whether it's clean energy or other new industrial opportunities, which will bring enormous benefits to surrounding communities."
Environmental Justice Australia Lawyer Jocelyn McGarity said the Hunter had many assets beyond coal.
"The government should be focused on supporting jobs that have a strong future, including investing in renewable energy and requiring proper rehabilitation by operators to clean up the mess left by decades of mining and burning coal," she said.
"For too long, the health costs of generating electricity from coal have been unfairly dumped on the people of the Hunter Valley."
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