NSW Premier Chris Minns warns renewable advocates rising prices will undermine clean energy shift

Chris Minns says massive price rises would undermine the transition to cleaner energy, as he signals support for extending the Eraring coal fired power plant.

NSW Premier Chris Minns. Picture: NCA Newswire/ Gaye Gerard

NSW Premier Chris Minns has warned renewable energy advocates that public support for the transition to a green economy will vanish if there are price spikes and blackouts, as he paved the way for the life of the state’s Eraring coal-fired power station to be extended.

Mr Minns’ comments came as the CSIRO revealed a large-scale nuclear plant would take at least 15 years and about $8.6bn to build but would produce electricity substantially more cheaply than small-scale reactors promoted by many ­advocates.

Mr Minns said on Tuesday his government was keeping “everything on the table” to ensure consumers did not face huge increases in power prices, after the energy market ­operator warned of a heightened risk of blackouts during peak ­summer demand in NSW and Victoria.

The Australian Energy Market Operator blamed the worsening outlook on a series of delays, including a year-long lag in delivering the EnergyConnect power cable between NSW and South Australia as well as multiple hold-ups to battery, hydro-storage, wind and solar projects.

“I don’t want to front-run ­discussions with Eraring and Origin,” Mr Minns said.

“Our priority is keeping the lights on and power prices as low as possible, particularly during a cost-of-living crisis. We’ll keep ever­y­thing on the table to ensure con­sumers aren’t facing massive increases in power ­prices.

“I know that there’s some consternation about Eraring, particularly from renewable energy advocates. I’d just make the point that nothing will extinguish community and popular support for this energy transition (more) than a massive price spike resulting in people not being able to pay their bills.”

The Minns government and Eraring’s owner, Origin Energy, have been locked in talks over the future of the nation’s largest coal-fired power station for months, with expectations high that a deal will soon be struck. But while Mr Minns signalled an agreement with Origin was possible, federal Climate Change and Energy Minister Chris Bowen said it was standard practice for AEMO to identify reliability risks. He provided an assurance that new investments in energy generation would “come forward” to prevent shortfalls.

“It’s been well established that the NSW government was in discussions with Origin about the closure date of Eraring. That’s as it should be,” he told Sky News.

“Lots of people said there were going to be blackouts this last summer,” he said. “There were no blackouts caused by a lack of electricity … We had plenty of energy to get us through last summer, and investments will come forward.”

Australian Industry Group chief executive Innes Willox said the outlook for summer appeared manageable given the AEMO was procuring reliability reserves. But he warned the electricity system was being “held together by more chewing gum, Band-Aids and rubber bands – meaning that the risks of failure grow every year.”

“If announced coal retirements proceed on time and are replaced only by those new assets that already have final approvals and finance, Ai Group estimates that NSW and Victorian energy users will have three to 10 times more unreliability than government standards target,” he said, pointing to “hundreds of millions of dollars a year of lost value to businesses and households”.

Energy Users Association of Australia chief executive Andrew Richards said the outlook for Victoria and NSW was “alarming” and the rollout of new generation was not happening fast enough.

“It is a warning on what the future could look like should we choose to turn off existing assets if we do not have new ones ready to replace them,” he said.

Clean Energy Council chief executive Kane Thornton said a reliability gap of more than 1GW had been forecast by AEMO over the next few years due to uncertainty about the planned closures of ageing coal-fired power stations and delays to the rollout of transmission upgrades. “Only by speeding up the construction of renewable generation, storage and new trans­mission will we be able to avoid blackouts and electricity price explosions over the next decade,” he said.

Anthony Albanese acknowledged the NSW Labor government was considering extending the lifespan of Eraring, arguing it was important “to make sure that there is stability in the grid”.

The Prime Minister said the energy regulator had not called for a “transition to nuclear reactors,” accusing Peter Dutton of failing to provide details on where they would be and who would finance them. “What we know is that it is up to six times more costly than renewable energy. That’s not a plan, that’s a disaster,” he said.

The Opposition Leader said the Coalition had been “very clear that you have to have a policy where you’ve got cheaper electricity; you’ve got consistent electricity so that we don’t have blackouts and brownouts because, otherwise, manufacturing will just go offshore.”

Mr Dutton said about 90 per cent of firming capacity would leave the energy market over the next decade, forcing governments into negotiating for the extension of coal-fired power stations.