Minns urged to take action on coal-fired ‘back-up’ Eraring power station

Pressure is mounting on Premier Chris Minns to decide if the government will intervene in the slated closure of the Eraring power station as two major green energy projects are hit by delays.

Delays to the Snowy Hydro and Kurri Kurri gas plant renewable energy projects means Chris Minns has no choice but to intervene to keep coal-fired power station Eraring open, according to experts.

With Eraring’s fellow black coal-powered facility Liddell set to close in less than a fortnight, Tony Wood, the energy program director at the Grattan Institute, said the NSW Government needed to keep the state’s largest power station Eraring as a “back-up option” beyond its scheduled shutdown date of 2025.

“You don’t have to commit absolutely to keeping it open, but you want the flexibility to make sure if things go worse than they might, you have the option to keep it open,” he said.

“There’s a circumstance in which closing Eraring in 2025-26 is a real problem and circumstances where it won’t be a problem.”

He added the bumpy transition to renewable power – highlighted by the energy market regulator warning earlier this year that NSW faced supply shortfalls by 2025 – had created an “uncomfortable” scenario.

Origin Energy's Eraring power station.

“I think it should be kept as a back-up option … We should absolutely. We’re at a point where everyone’s feeling a little uncomfortable.”

The Telegraph revealed last week that a tunnel boring machine working on the Snowy Hydro 2.0 remained at a standstill, four months after it came to a grinding halt after hitting soft ground while tunnelling in December.

Snowy Hydro 2.0. Tantangara site where a tunnelling machine is currently bogged. Picture: Jane Dempster

The boring machine temporarily restarted work earlier this month only to be suspended again as work continues to shore up the ground around the tunnel, with federal energy minister Chris Bowen “deeply concerned” about the delays.

Mr Wood said further blowouts on that project and the building of the Kurri Kurri gas-powered plant – which is now forecast to open in late 2024 – meant “belts and braces” had to be put in place to protect baseload power supply.

“Plan A was Snowy Hydro and Kurri Kurri (providing renewable power) and that’s not going the way we expected. Plan A has been delayed, so do we need to put in place extra belts and braces … I think we should be doing that,” he said.

NSW Treasurer Daniel Mookhey on Monday revealed he’d met with Eraring’s prospective owners, Brookfield Asset Management, for briefings on the future of the plant, saying “all options remain on the table when it comes to the future of the power station”.

Treasurer Daniel Mookhey. Picture: Tim Pascoe

Premier Chris Minns on Tuesday said the talks with Brookfield were part of a suite of measures the government was attacking to keep the lights on as coal-stations shut down and renewable power is put in place.

“We know that there‘s a big challenge coming around the corner, however, independent of Liddell, particularly in relation to Eraring (and) baseload supply of power in the state of New South Wales,” he said.

“It’s a big challenge when it comes to energy, but we’re getting the policy pieces in place to ensure we can manage the renewable energy revolution.”

LOSS OF LIDDEL ‘WILL BE COVERED’

Energy Minister Penny Sharpe has insisted the closure of Liddell won’t impact energy supplies and prices when it shut downs on April 28, despite the coal-fired power station supplying 10 per cent of the state’s energy production.

The final three units at Liddell will be progressively shut down by technicians over next week, after the first unit was taken offline last year.

The closure of the Hunter Valley power station will strip the NSW energy market of 10 per cent of its current capacity, but Ms Sharpe and the Australian Energy Market Operator (AEMO) have insisted the shortfall will be covered.

The Liddell power station in the NSW Hunter Valley. Picture: Ray Strange

Ms Sharpe said in 2022 the ageing Liddell made around 1260MW available, with renewable energy projects able to cover its removal from the market.

She said smaller-scale renewable projects in place to cover Liddell’s exit include 2060MW of solar and 840MW of wind-powered energy already being produced in the state.

Liddell’s shutdown was first announced in 2015, while it was only confirmed last year that Eraring would shut down by 2025.

“Liddell has served NSW well for more than 50 years. But it’s not our energy future. NSW is already transitioning to a renewable energy future and that will continue,” Ms Sharpe said.

NSW Energy Minister Penny Sharpe. Picture: Gaye Gerard

“The government is focused on ensuring that more projects are coming through the pipeline – coupled with transmission, firming, and large-scale batteries to maintain reliability of supply.”

It was only last winter when special reserve supplies had to be tapped into in NSW, with high demand and baseload power shortages leading to a power shortfall, even with Liddell still operating.

Liddell is the first of five coal-fired power stations, which currently supply 13 per cent of the total power to the entire Australian energy network, scheduled to shut down by 2029.

In a February update, AEMO said projects such as the Waratah Super Battery being built on the Central Coast would add reliability to the state’s power grid, even with the shutdown of coal-fired power stations.