Delaying the closure of Origin Energy’s huge Eraring coal power station would prevent a surge in household power bills and reduce the risk of blackouts, the NSW government was told in modelling ahead of its decision to extend the plant’s life by at least two years.

Keeping the 2880-megawatt generator running past August 2025 – the date Origin was due to turn the plant off – would mean wholesale power prices would be about $55 a megawatt-hour lower in 2025-26, according to energy market forecasts provided to the state.