Australia’s biggest coal-fired power plant to shut years ahead of schedule

Australia’s largest coal-fired power station will close seven years earlier than planned, joining a growing list of plants forced offline in the country by the proliferation of cheap wind and solar energy.

The plant’s owner Origin Energy, a major utility and gas producer, said the 2.88 gigawatt Eraring power plant, located in the coal-rich Lake Macquarie region north of Sydney, was unable to compete with the “influx of renewables” and would close in 2025 .

“Australia’s energy market today is very different from the one when Eraring was brought online in the early 1980s,” Origin chief executive Frank Calabria said. “The reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower cost generation, including solar, wind and batteries.”

The federal government, which has attempted to prolong the life of the country’s coal plants on the grounds that they provide necessary baseload power, called the decision “bitterly disappointing”.

Environmental and renewables groups welcomed the decision, but called for a more co-ordinated national approach to ensure an orderly transition.

“These accelerated coal retirements need to be co-ordinated to ensure our electricity system remains stable through this rapid transition, and so that we maximize opportunities for local economies,” said Kane Thornton, chief executive of the Clean Energy Council.

Last week, utility giant AGL Energy announced it was bringing forward the closure of two of its coal plants. EnergyAustralia, the third of the big three utilities, said last year it would retire a coal plant in Victoria five years earlier than planned. All three companies have seen earnings from coal generation plummet in recent years.

Australia depends on coal-fired power for nearly 60 per cent of its electricity, making it one of the world’s highest carbon-emitting nations per capita, according to World Bank data.

The country’s rapid exit from coal has raised concerns there will not be enough available power to back up intermittent wind and solar, leading to a scramble among state and federal governments to plug the gap with batteries, pumped hydro power and gas plants.

The federal government has failed to develop a coherent national energy policy, said Tony Wood, an energy analyst with think-tank the Grattan Institute.

“In Australia more so than most countries, even the US, we’ve seen the politicisation of climate change. It’s becoming a key political weapon and when politicians have political weapons they use them, ”he said. “Australia has abandoned more climate change policies than almost any country in the world.”

This meant Australia’s transition from a coal-dominated grid was looking increasingly disorderly, Wood added. “It doesn’t mean the lights are going to go out, but it means it will be messy, ugly, unpredictable, and it probably does not mean it’s going to be more expensive,” he said.

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