‘Origin will feel the wrath’: Treasurer’s warning on Eraring

Set to start talks with Origin Energy to keep Eraring power station open, the NSW Treasurer has put the power provider on notice: it will feel taxpayer ‘wrath’ if it games the costs.

Eraring owner Origin Energy has been warned it will “feel the wrath” of the NSW people, if they try and gouge the taxpayer after Tuesday’s announcement the government was seeking to extend the life of the coal-fired power plant.

NSW Treasurer Daniel Mookhey said on Wednesday Origin could expect some “tough” conversations with the government in negotiating the extension.

“I want to send a very clear message to Origin … they will feel the wrath of the people of NSW if they see this as an opportunity to game the system,” he said.

‘We’re going to have some tough conversations with Origin in the near term.

“Origin have done very well from the previous government’s failed privatisation.”

COST STILL UNKNOWN

This comes as the cost of keeping Eraring power station open is still ­up in the air after the Minns government was unable to clarify how much taxpayers would have to fork out or how long the plant would stay open for.

The government revealed on Tuesday it had accepted all but four of the 54 recommendations from a review into NSW’s energy market, including that “engagement begin with Origin Energy” regarding an extension of the plant’s life.

Origin Energy's Eraring power station could have its life extended.

Energy Minister Penny Sharpe ruled out the government buying back Eraring as an option but could not say how much it would be willing to pay to keep the plant open or for how long.

“I’m not going to speculate on what the cost would be. We start from the beginning of zero, we go from there,” she said. “I can’t give you a time and I can’t give you a cost.”

The Daily Telegraph understands there will be no economic impact of the decision in the budget to be released later this month.

Any money the government may pay to Origin to extend the life of Eraring is set to be ­accounted for in next year’s budget.

Energy Minister Penny Sharpe said the NSW government can’t give a time or cost for the project.

As revealed by The Daily Telegraph in July, the report confirmed renewable project delays would result in significant reliability issues in the electricity grid prompting the government to look at extending the life of the Eraring plant.

The NSW Electricity Supply and Reliability Check Up report recommended Eraring stay open to ensure NSW would have enough power and to keep electricity prices down.

Despite talk of an extension, Origin Energy maintained it wants to exit coal generation as soon as renewable energy can pick up the slack, noting that the Eraring coal-fired power station faces “economic challenges” that need to be ­navigated to keep the plant open longer.

Origin’s position indicates that the government will need to put money on the table to keep Eraring open beyond ­August 2025.

“We acknowledge the recommendations regarding Eraring’s closure and as we have consistently said, we will continue to engage with the NSW government to find a path forward that can help navigate the economic challenges facing the plant and avert any risk to the reliability of electricity supply in the state,” an Origin spokeswoman said.

Eraring Power Station requires substantial investment to keep it operational.

One of the recommendations accepted by the government was for the creation of an Energy Security Target Monitor (ESTM), which will scrutinise the exit plans of the remaining private coal-fired power stations to make sure the lights stay on at the lowest cost.

Origin will be forced to provide proof to the new ESTM of any claims of “economic challenges” the company may ask taxpayers to fork out for.

Former energy minister Matt Kean said there was no need to keep the plant open and argued the associated costs would be too high.

“If the renewable road map is delivered there will be no ­energy supply shortfall,” he said on Tuesday.

“And I note today the Energy Minister confirmed road map projects were on schedule, including the Waratah Super Battery.”