Eraring Power Station’s early closure will bring forward clean up costs for NSW taxpayer

The early closure of the Eraring Power Station will bring forward clean up costs for NSW taxpayers, set to be in the hundreds of millions of dollars.

Taxpayers are set to fork out hundreds of millions of dollars to clean up the Eraring Power Station with that cost brought forward due to the plant’s early closure.

Under terms of the NSW government’s sale of the plant in 2013, the state is responsible for cleaning up contamination caused to the Eraring site before it was sold to Origin Energy.

That means that the taxpayer will foot the bill to cover the clean-up from when the power station came online in the 1980s until 2013.

Origin Energy is set to close the Eraring Power Station seven years earlier than planned, bringing forward taxpayers’ clean up costs. Picture: Liam Driver

Origin’s decision to close the plant early is set to impose the clean up costs – set to be in the hundreds of millions of dollars – years earlier than expected.

Some of the money to pay for the clean up may need to be found as part of this year’s budget process, with the plant now set to close in 2025.

Treasurer Matt Kean will need to find money to pay for the Eraring clean up as part of his state budget. Picture: NCA NewsWire / Jeremy Piper

NSW Treasury has previously identified a potential cost of $2.19 billion for decommissioning a number of privatised coal-fired power stations, but the cost of individual power stations has not been released publicly.

Origin last month estimated that if the power station continued to operate until 2032, the clean-up cost could come to $240 million.

The company hasn’t yet revised the cost considering the early closure.

In a statement, a Treasury spokeswoman said the cost to the taxpayer will “only be a portion of Origin’s total cost estimate”.

The clean up cost was “taken into account” when the power station was sold off, she said.

The total cost will only be known when studies are completed when the plant finally closed.

Labor Leader Chris Minns accused the government of trying to impose a “secret cost” on the taxpayer.

“The government sold this asset to the private sector nine years ago but weren’t upfront with this additional cost to the taxpayer of the clean-up,” he said.

“That is hundreds of millions of dollars that could have been better spent on schools and hospitals.”

NSW taxpayers were left $75 million out of pocket when the government sold Eraring to Origin Energy in 2013.

As part of the sale, the O’Farrell government paid compensation to Origin so it could get out of a contract to supply the power company with cheap coal from a new coal mine.

At the time, then-Treasurer Mike Baird said the deal had saved taxpayers from paying to develop and run a new coal mine at Cobbora, which he said would have cost “more than $1.5 billion”.