It wasn’t just Loy Yang A (and the STA) in the news this week…with (the following day – Tuesday 22nd August) rumours circulating that the Eraring Power Station might need to continue operating beyond what’s always seemed to be (as noted in February 2022) a ‘might close as early as 2025’ mooted earliest possible closure date.
That image is of the article on Tuesday 22nd August, Samantha Hutchinson and Angela MacDonald-Smith noted that ‘Giant coal-fired power station should stay open, NSW review finds’ … noting that:
‘The country’s largest coal-fired power station, Eraring in NSW, could stay open beyond its target shut down date in two years after a state government review recommended extending its life to shore up reliability during the energy transition as replacement projects run late.
A confidential cabinet document obtained by The Sydney Morning Herald revealed the review had recommended the 2880-megawatt power station stay open beyond the August 2025 closure date Origin set in February last year, after accelerating the shutdown by seven years.
The review reportedly found NSW might need to rely on traditional power sources, including coal and gas, to avoid electricity shortfalls as the state transitions to renewables.
Ms Sharpe on Tuesday confirmed she had received the energy reliability check-up report and said the government was weighing up its next steps.’
This article seems to refer to articles published in the SMH as recorded below…
(A) Where is the ‘Electricity Supply and Reliability Check Up ’?
I’ve had a quick scan for the Electricity Supply and Reliability Check Up report, but have been unable to find it … which makes sense, as the news articles above have noted that it’s not yet been released.
However Google does help me find this page on the Department of Energy’s website, which is where I assume the report will be published (whenever it’s actually released):
Also on that site are these 4 pages of Terms of Reference:
… which notes (at the end) that …
‘The Check Up will take approximately 8 weeks and a final report is required to be delivered to the Government by 04 August 2023’
Note that Friday 4th August is more than 2 weeks before the reports in the SMH (noted below, and referenced in AFR above) were published.
(B) In the media over the past week
In the week that’s followed this rumours/reports about Origin Energy’s Eraring station, I have seen a number of different articles about this, such as:
1) Here on WattClarity®:
(a) There’s this note, obviously
(b) But it’s also worth reminding readers of how we wrote ‘We’re not building enough replacement dispatchable capacity’ back on 14th May 2023 with reference to the GenInsights Quarterly Updates for 2023 Q1 that we’d released beforehand.
2) In the SMH I have seen…
(a) At 05:00 on Tue 22nd August, Michael McGowan noted that ‘Eraring should remain open beyond 2025: Minns government energy review’ … noting that:
‘The Minns government’s review of the NSW electricity network has recommended the life of Australia’s largest coal-fired power station be extended by making a deal with operator Origin Energy.
After months of speculation over the future of Eraring, the Herald can reveal an Electricity Supply and Reliability Check Up review commissioned by the new Labor government to assess the state’s transition to renewable energy has recommended the power station’s operations should be extended beyond its existing 2025 closure date.’
The confidential cabinet document says that a deal with Origin should be temporary and coupled with an exit policy.
Industry experts estimate prolonging Eraring’s operations could cost between $200 million and $400 million a year. The move is likely to be welcomed by industry, but any extension would pose a political risk for Labor because it would require the use of taxpayer funds to support a high-polluting coal plant.’
The Minns government paid consultancy group Marsden Jacob Associates $217,000 to conduct the energy check-up, which was headed by Cameron O’Reilly, a Keating-era Labor staffer and a former senior energy bureaucrat in NSW.’
(b) Also on Tue 22nd August, the Editorial noted that ‘It would be reckless to close Eraring and expose NSW to energy shortfalls’ … noting that:
‘While Premier Chris Minns, Treasurer Daniel Mookhey and Environment and Energy Minister Penny Sharpe are yet to make a final call on what to do, a lifeline for Origin has been in the works for months.
…and there are probably more, as well.
3) In the AFR I have seen…
(a) One article is noted above, but also …
(b) on Thu 24th August, Samantha Hutchinson and Angela MacDonald-Smith noted that ‘Alinta eyes bid for Eraring as NSW transition falters’ … noting that:
‘The Electricity Supply and Reliability Check Up review found NSW might need to rely on traditional power sources, including coal and gas, to avoid electricity shortfalls as the state transitions to renewables.
However, it is expected some in the government will oppose a sale to Alinta, owned by Hong Kong-listed Chow Tai Fook Enterprises, and would prefer to negotiate with Origin if the generator needs to run for longer.’
(c) then the next day (Friday 25th August), Angela MacDonald-Smith and Ben Potter noted that ‘Alinta makes offer to NSW to retail Eraring electricity’
(d) Nothing further, at this point
4) In the Australian I have seen …
(a) On Tue 22nd Aug 2023, Colin Packham wrote ‘Extend Eraring power station, report urges’, including the comment that:
‘The new NSW government commissioned an independent report, which was delivered this month, and The Australian understands it urged the Labor government to enter into negotiations with Origin to prolong its life to prevent any reliability gaps and guarantee no adverse impact on prices. The Australian also understands the report recommended the creation of a mechanism to manage the retirement of coal power stations.
The Australian understands the report did not recommend how long Eraring should remain open for or detail specific about how much generation would be required to ensure sufficient reliability.
The NSW government is likely to be guided by the Australian Energy Market Operator report that is due at the end of the month about how long to seek an extension for.
The Australian reported earlier this week that the market operator is expected to heighten its warning about Australia’s energy transition as notable infrastructure and grid-scale renewable energy projects fail to be delivered on schedule.
(b) On Thu 24th Aug 2023, Colin Packham wrote ‘Alinta interested in buying coal-fired Eraring before its closure, but it’s considered a long shot’, and then …
(c) on Friday 25th Aug 2023, Colin Packham wrote ‘Alinta tips in retail offer for Eraring extension’.
5) In the Guardian I have seen …
(a) On Thu 24th Aug, Adam Morton mentioned the developments at Loy Yang A and Eraring in relation to clean energy development in the article ‘Solar and windfarm investment is drying up – and Australia needs a wake-up call on the future of the electricity grid’..
6) In RenewEconomy I have seen …
(a) On Tue 22nd Aug, Giles Parkinson wrote ‘Eraring and Loy Yang A coal closure wrangles show need for hard renewable targets’.
(b) then on Wed 23rd Aug, Sophie Vorrath wrote “Massive retrograde step:” Renewables industry says “no case” to extend Eraring.
(c) On 24th Aug, Giles Parkinson wrote ‘Greens push for 2035 net zero target in NSW as Labor sweats over Eraring closure’.
(d) Nothing further, at this point.
7) In PV Magazine I have seen …
(a) Nothing at this point.
8) In the ABC I have seen …
(a) On Sat 26th August there’s an article by Daniel Mercer ‘Why governments are standing behind ‘coal clunkers’ despite record high power prices’ which notes ….
‘Revenue at Eraring, like so many other generators across Australia’s biggest electricity market, has been soaring thanks to record wholesale power prices.
In spite of the results, the talk this week once again centred on why Eraring is scheduled to close in just two years and why the New South Wales government is under growing pressure to throw the plant a lifeline.
So why is there such a disconnect between the apparent financial health of power stations such as Eraring and the reality behind the decisions to close them down?’
… and starts to explore the answer to that question.
9) In the ESD News I have seen …
(a) On 24th August there’s an article ‘CEC: Eraring extension speculation will scare off investors’ that references the Clean Energy Council.
As a reader here, if you come across any other useful commentary, feel free to add as a comment below.
(C) Elsewhere, including Social Media
Understandably these rumours have caused some consternation amongst the greener-left stakeholders on that side of the Emotion-o-meter … far too many conversations to cover here. However I thought it was especially worth highlighting the Origin Energy response to the laughably simplistic conspiracy theory being peddled by Simon Holmes a Court here:
Also raising questions about the extension to operations, is this 3-page PDF which says ‘Delays will cost consumers, build the climate crisis, and undermine investor certainty’ on Tuesday 22nd August.
Towards the extreme right-hand-side of the Emotion-o-meter I also noted the IPA media release ‘O’Reilly Review Makes It Clear Australia Needs Minns To Keep The Lights On’.
With the release of the 2023 ESOO slated for later this week, there will be many looking for clues (there, here, and elsewhere) about what this all means about the ongoing need for ‘keeping the lights on’ services …
PS1 – Delays to a decision (on Mon 28th Aug)
Worth adding a note that on Monday 28th August, Giles Parkinson wrote that:
‘The state government was to have delivered its verdict this week, but RenewEconomy understands that it has decided to take more time – several weeks – in what is clearly a devilishly complicated situation.’
The article has other useful context:
This was also discussed by Colin Packham in the Australian on the same day:
‘An independent report into the future of the state’s largest electricity generator will not be publicly released this month as scheduled after the NSW state government delayed the publication in order to give it more time to determine its response.’
and later in the article…
‘…sources confirmed the report will now not be issued until September at the earliest.’