Origin Energy hopes keeping Australia’s largest coal-fired power plant open longer will add to grid stability without compromising its emission targets.
This week Origin Energy announced it would continue operations from all four units of the Eraring coal-fired power station until April 2029 as part of the option in its agrrement with NSW Government.
This is a 20-month extension from the previous closure date in August 2027 – a decision that “reduces risks to system security” as outlined in the Australian Energy Market Operator’s (AEMO) Transition Plan for System Security report.
“We’ve taken the decision to extend Eraring’s operations after assessing a range of factors, including the needs of our customers, market conditions and the important role the plant plays in the NSW energy system,” Origin chief executive officer Frank Calabria said.
“Good progress is being made on the delivery of new energy infrastructure including major transmission works and projects like our large-scale battery at Eraring, but it has become clear Eraring power station will need to run for longer to support secure and stable power supply.”
Origin said that given it has made “significant investment” in the maintenance of Eraring’s four units over many years, it doesn’t intend to make any further major maintenance overhauls on the plant.
The company said the extension wouldn’t impact its 2030 emissions reductions targets and its goal to reach net zero by 2050.
“The decision to close all four units in April 2029 is consistent with the terms of the existing agreement reached with the NSW Government in May 2024,” Origin said.
Battery work continues
The Eraring BESS extends the role of the Eraring site beyond 2029, Origin said, with commercial operation commencing in late 2025 (stages one and three).
In December, Origin committed $80 million to build a fourth stage of the Eraring BESS, with construction to commence by the end of 2025 and the BESS to be operational by the first quarter of 2027. This will support a 700MW/3160MWh operation.
The 2880MW black coal-fired Eraring power station first commenced operations in 1984.
Mixed reactions: ‘Uncertainty’
While the NSW Environment Minister Penny Sharpe released a statement saying Origin’s decision gave “certainty to workers, the market and energy consumers across the state” not every one was happy with
“NSW needs to move faster on renewables and transmission to make sure coal is replaced in a timely manner. Clear, credible coal closure dates are essential if we want new clean energy built on time.
“Extending coal plant lifespans before fully utilising lower-cost, cleaner options like energy efficiency and appliance upgrades in NSW homes is a missed opportunity.”
RBC Capital Markets analyst Gordon Ramsay told the ABC it was “no surprise” to the market Origin had decided to extend the life of the plant.
He said the decision was a “result of the slower than expected rollout of renewables in Australia (other than rooftop solar)” longer than the federal government’s forecast and increased concern of the reliability of Austrlia’s remaining coal fire plants beyond Eraring’s closure.
Actions to take now
Schneider Electric’s Sustainability Advisory Services Principal and Senior Director Lisa Zembrodt said the postponement was also an opportunity for better resilience building.
“The extension of Eraring reflects the reality that parts of the energy system, particularly large-scale storage, transmission and grid stability services, are still scaling to meet the pace of change and maintain reliability. It also underlines the need to progress our energy transition.
“The solutions for businesses to reduce emissions, improving energy efficiency and resilience, are already available and can improve their bottom lines. Demand flexibility, microgrids, battery energy storage systems, renewable power purchase agreements, fleet electrification and smarter energy management can all be deployed now.
“By accelerating these actions, organisations can strengthen their own resilience, manage costs and, importantly, help reduce pressure on the grid while broader infrastructure continues to be built. This kind of parallel progress — system-level investment alongside faster implementation at the demand side — is what will enable a more reliable and orderly energy transition.”
Mixed reactions: ‘Unreliable and expensive’
Clean Energy Council CEO Jackie Trad said the decision underscored the urgent need to accelerate private investment in renewable energy, storage and transmission across NSW
She also noted that coal-fired power failures, including a recent one at the Callide C coal plant in Queensland, showed “extending the life of ageing coal plants is far from ideal”.
“Continued reliance on ageing coal power stations is increasingly driving unplanned outages, wholesale price spikes and higher electricity costs for households and businesses,” Trad said in a CEC statement.
In the 12 months to 31 October 2025, an average of 24 per cent of coal-fired generation was unavailable in NSW and Queensland.
From late October to late November last year, there were seven unplanned coal outages and wholesale electricity prices surged from around $70/MWh in October to $220/MWh in NSW with the analysis recording 128 unplanned coal breakdowns – eight times more than expected by the market operator.
“An orderly transition matters, but the reality is that old coal power stations are increasingly unreliable and expensive, and that volatility flows straight through to consumers,” Trad said.
“The average age of coal-fired generators in the National Electricity Market is now 38 years, with the historical retirement age just 44 years, placing much of the fleet firmly in the high-risk phase of its operating life.”
