NSW’s bid to keep Eraring coal power station going a backwards step

At a time when energy bills are soaring, we deserve to understand why the government is spending taxpayer money to keep an ageing coal-fired power station running.

Eraring power station may run for four years more than expected.

When I was NSW’s energy minister, our government laid out a clear path to a future powered by reliable, affordable and clean energy. We said no to spending billions of dollars of taxpayers money to keep the ageing Eraring coal-fired power station running longer than was necessary.

But Chris Minns’ Labor government is crumbling where we stood firm. If reports this week are true, this government could be about to strike a deal to pay Origin Energy to run Eraring for up to four more years. And they’re selling out the people of NSW, our economy, and the environment to pay for it.

We developed a road map with a mission to put NSW on the path to have the cheapest and most reliable energy anywhere in the world. To do this, we legislated the strongest reliability standard in Australia and commissioned the biggest super battery in the southern hemisphere to keep our energy security safe and secure. We sent a clear signal to investors who wanted to invest in NSW, bring down emissions and make energy affordable for consumers. Subsidising an ageing coal-fired power station to run for years longer would be a step backwards, and undo much of this good work.

The independent advice I received as energy minister was that if we delivered the Waratah super battery, and several other projects, we could keep the lights on without slugging taxpayers for the cost of propping up Eraring.

If the situation is different now, then the very least the Minns Government could do is come clean to NSW taxpayers about what has changed, rather than negotiating in secret with Origin Energy. That’s why the opposition will be using every means at our disposal to ensure the public gets to see the advice the Minns government has received. One recent estimate from an independent energy think tank calculated that it would add up to $150m to energy bills in NSW for every year the Minns government wants to subsidise Eraring. At a time when energy bills are soaring, and so many people are under pressure balancing the household budget, we deserve is to understand why the government is taking this decision.

And with NSW poised to lose its AAA credit rating, the last thing this government should be doing is wasting public money and wading into the energy market in a way that could chill investment in a massively growing clean energy industry.

At a time when we are in the midst of a cost of living crisis, directing taxpayer funding to keep a coal-fired power station open is not a decision to be made unless every other alternative has been thoroughly explored.

Eraring’s emissions are roughly equivalent to those produced by the 4.4 million cars on NSW roads, and if the Minns government inks a deal with Origin, what’s to stop every other coal-fired power station operator lining up for their own handout by threatening to close early? We’ve already seen Delta Electricity wade into the public debate this week, with hints they could be looking to bring forward the closure date of their Vales Point coal power station.

For decades coal-fired power stations have been the backbone of our energy grid, but as they age, they become less reliable. In 2021, an explosion at a central Queensland power station left nearly half a million homes and businesses, from Cairns to the Gold Coast, without power. The Callide C Power Station was built in 2001 and the year before the explosion, it broke down eight times. Just last month Eraring had two power units trip simultaneously, and we have no guarantee that there aren’t more to come. The power station is more than 40 years old, it’s reaching its use-by date and it’s time to draw a line under the sand to be clear that our future will be powered by clean energy.

My advice to the Minns government? Stand up for taxpayers by not spending a cent more than is absolutely necessary, pursue all other options before doing a deal with a big energy company and be transparent with people about why any intervention in the energy market is required. Then get on with the job of transitioning NSW to a clean, reliable and affordable energy future.

Matt Kean is the former NSW Energy Minister