The NSW Government has secured an extension for the Eraring Power Station.

The state has reached an agreement with Origin Energy to extend the operation of the Eraring Power Station until August 2027. 

This move aims to ensure a reliable energy supply while the state transitions to renewable energy sources. 

Originally slated to close in 2025, the extension is deemed necessary to manage energy reliability and price risks.

“Today's decision delivers certainty for households and businesses. The people of NSW now have certainty that the NSW Government has a plan to ensure we have reliable energy while we transition the workforce and the economy to net zero,” Premier Chris Minns stated. 

“The best way to undermine the renewable energy transition is to have the lights go out in 2025. I'm not letting that happen.”

The agreement stipulates that the NSW Government will not make upfront payments to Origin Energy. Instead, an underwriting arrangement has been established. 

Origin must decide by 31 March in 2025 and 2026 whether to opt into this arrangement for the following financial year. 

If it opts in, Origin will share up to $40 million per year of any profits from Eraring and can claim up to 80 per cent of any operational losses, capped at $225 million annually.

Origin Energy is required to ensure Eraring generates at least 6 terawatt hours of electricity annually, equivalent to the output of two of its four generating units. 

Additionally, the agreement mandates that Origin maintain its current workforce of approximately 220 employees, adhere to a maintenance plan, and comply with environmental protections stipulated in its licence conditions.

Minister for Climate Change, Energy, and the Environment Penny Sharpe highlighted the state's commitment to the renewable transition while recognising the need for interim measures. 

“NSW is stepping up the transition to cheap, clean, reliable renewable energy. But to keep the lights on and prices down, we need to make sure new renewable infrastructure and storage capacity is online before coal-fired generators reach the end of their life,” Sharpe said.

The extension aims to provide a stable energy supply and prevent electricity outages and price spikes as the state continues to develop its renewable energy infrastructure. 

Origin has revised its closure notice for Eraring to the Australian Energy Market Operator (AEMO), setting a new expected closure date of 19 August 2027. 

The power station must permanently close before April 2029, aligning with NSW's 2030 emissions reduction target. 

The extension has received mixed reactions. While the Mining and Energy Union welcomed the decision for job security, environmental groups and some local residents expressed disappointment. 

This agreement is set to be tabled in Parliament in the next sitting week to ensure transparency and provide a detailed summary of the arrangements involved.