Australians $3000 better off if Eraring coal power station closes on schedule: Nexa

Building enough renewable energy generation to be able to close Australia’s largest coal power station in 2025 is expected to save consumers up to $3000 over the next 10 years.

Building enough renewable energy generation to be able to close Australia’s largest coal power station in 2025 as scheduled will save consumers up to $3000 over the next 10 years, a new report has found, as pressure builds to hasten the transition away from fossil fuels.

The future of Origin Energy’s 2880MW Eraring coal power station is in the national spotlight amid concerns about how the closure of a generator that provides about 20 per cent of NSW’s energy needs will affect household and business bills.

NSW Energy Minister Penny Sharpe has said the state would allow Eraring to close only if there was no risk to supply. With Australia struggling to build renewables quickly enough to compensate for the loss of coal, there is a growing expectation that the NSW state government will have to strike an agreement to extend the lifespan of Eraring.

But Nexa Advisory chief executive Stephanie Bashir said Australia could accelerate the transition to avoid prolonging the lifespan of Eraring, and doing so would be economically beneficial to consumers.

”We can close Eraring and other coal-fired power stations on time, if we act now and work fast. Our report highlights short and long-term recommendations that if implemented now could accelerate the current slow build trajectory we are on and avoid the serious implications of delaying ageing coal power plants such as Eraring. We just need to be smarter, not work harder,” Ms Bashir said.

Nexa Advisory said research from Endgame Economics indicated consumer bills would be $2250-$3000 higher over the next 10 years if the closure of Eraring and smaller generator Vales Point was delayed.

 

The findings will strengthen the case for Australia to hasten the transition, a key pillar in the federal Labor government’s plan to meet a national target of being net zero by 2050.

Nexa said many of the catalysts for weaning the nation off fossil fuels already existed.

Ms Bashir said NSW should be more aggressive through the capacity investment scheme, the centrepiece of a harmonised plan by federal, states and territory governments to ensure sufficient power generation is available as traditional coal-fired power stations retire.

In the scheme, the government underwrites revenue for a mix of zero-emissions dispatchable generation and storage projects.

NSW last month became the first state to use the scheme, announcing plans to target nearly one gigawatt of capacity and eradicating a forecast shortfall in 2028-29 flagged by the Australian Energy Market Operator.

Ms Bashir said NSW should also complement the state’s so-called Renewable Energy Zones with new generation.

NSW’s energy transition road map envisages the development of energy precincts, known as renewable energy zones, which would reduce the need for new transmission lines, which are the biggest choke point in Australia’s energy transition.

The country’s energy market operator has called for more work to be done on new lines to connect zero-emissions sources to the National Electricity Market and allow the transport of cheap electricity between states.

However, the construction of new high-voltage lines has been slowed down by community opposition.

Australia needs more than 10,000km of new high-voltage power lines.

While Australian states have offered ever larger financial compensation to win favour, pockets of landowners have refused to sell – raising the prospect of compulsory acquisitions.

Originally published as Australians $3000 better off if Eraring coal power station closes on schedule: Nexa