NSW Energy Minister’s bizarre Ukraine rant amid power crisis

NSW Energy Minister Matt Kean has declared he “didn’t invade Ukraine” and couldn’t “control the weather” in a bizarre on-air rant while under fire about the ongoing power crisis.

NSW Treasurer and Energy Minister Matt Kean has refused to confirm whether or not Origin Energy made an offer to keep Eraring power station open longer or sell the plant to the state government during a meeting in July 2021.

Pressed with questions by 2GB’s Ben Fordham, Mr Kean refused to provide a clear response on the issue.

“Let me be very clear. We engage in good-faith discussion with companies like Origin. We consider a number of options,” Mr Kean said.

Accused of dodging the question, Mr Kean pressed on by saying he was “being very clear”.

“We engage with market participants,” Mr Kean said.

“We considered a number of scenarios that were put to us. When we consider a range of scenarios … we consider the cost. We do so in a way that weighs up in the best interests for taxpayers and for electricity.”

NSW Treasurer and Energy Minister Matt Kean. Picture: Jeremy Piper

In acknowledging that the energy crisis was a result of a “confluence of events”, Mr Kean outlined his responsibilities and made it clear that he wasn’t in control of all impacting factors.

“I always take responsibility, but let’s be very clear. I didn’t invade Ukraine. I didn’t make the generators (into) old equipment and I certainly didn’t make the weather cold,” he said.

“So I’ll take responsibility for making sure that we’re doing everything possible to keep the lights on and prices as low as possible.”

It comes as Origin Energy would have kept two of Eraring’s four generators running until 2028 while building up to 800 megawatts of replacement capacity as part of a proposal designed to reduce the risks posed by closing the entire plant early.

The secret proposal dubbed “Project Emu” was made to the NSW government last year but never went ahead.

The proposal would have kept up to 1440 megawatts of baseload coal-fired power generation running at the Lake Macquarie plant for longer, keeping wholesale power prices low and giving the workforce more time to adapt.

Origin Energy's Eraring power station will close in 2025, seven years earlier than planned.

As part of the top-secret “Project Emu” proposal, Origin would have closed two of Eraring’s four generators in February 2025 but kept the plant open at 50 per cent capacity until June 2028, while building extra low-emissions capacity to replace the lost power generation.

According to modelling provided by Origin to the state government, the staged exit proposal would have avoided a spike in wholesale power prices from 2025.

A full closure of Eraring in 2025 would have led to wholesale prices being up to 33 per cent higher than under the Project Emu proposal, the NSW government was told.

The highly-confidential Project Emu progressed so far that draft terms were prepared and provided to the state government.

The deal would have required the NSW government to pay 90 per cent of any losses Origin incurred by running two of Eraring’s four generators from 2025 to 2028.

Project Emu was outlined in previously confidential documents released to NSW parliament.

The documents reveal that Origin Energy indicated as early as July last year that it wanted to close Eraring early.

“On a commercial basis, we would submit our notice now and retire the plant in early 2025,” a document prepared by Origin dated July 2021 said.

It comes as huge swathes of Australia are in the grip of a power crisis. Picture: Andrew Henshaw

That’s despite Energy Minister Matt Kean telling parliament this year that he first found out about Origin’s decision to close Eraring “a day or two before it was announced”.

While the company’s preference was a “full closure” in 2025, an alternative was proposed to mitigate against “substantial capacity risks” posed by any delay major renewable energy projects including Snowy 2.0.

In the documents, Origin said Project Emu’s staged shutdown would provide “certainty and security to the market and a managed transition path for the workforce and local community”.

It would also build “Australia’s largest battery … before Eraring exits”.

Origin had proposed to replace Eraring’s capacity with either an 800MW battery with a two-hour “dispatch duration,” or 520MW of battery capacity alongside a 235MW expansion of Origin’s Shoalhaven pumped hydro facility.

Eraring is due to close in 2025. Picture: Nick Cubbin

“Origin undertook extensive discussions with the NSW government to identify what options might exist for the future of the plant, however these concluded when no agreement could be reached,” a spokesman said.

Mr Kean did not directly respond to questions about why Project Emu was not pursued, but said the current energy crisis is “being driven by external factors, not future closure dates”.

“Eraring will not close until 2025 at the earliest, as announced to the ASX by Origin Energy.

“Origin was obliged to alert the ASX once the decision was made in February this year, which was when Origin made the decision,” he said.

Labor leader Chris Minns called on Mr Kean to come clean on when he first knew Origin planned to close Eraring and “explain why he kept telling us prices were going to go down when he knew they were going up”.

Originally published as NSW Energy Minister’s bizarre Ukraine rant amid power crisis