Climate Energy Finance

Tim Buckley, director of independent public interest think tank Climate Energy Finance released the following statement on the announcement today of a 2 year extension to the operation of the Eraring coal power station on the NSW central coast, Australia’s largest.

“The news today that the NSW government has committed to pay up to $450m of public money to cover likely losses by coal operator Origin Energy to keep Eraring power station open to 2027, 2 years beyond its planned August 2025 closure date, is the devastating consequence of a decade of government planning failure.

“This is essentially Coalkeeper 2.0 – yet another massive coal subsidy funded by electricity users in NSW, with the NSW Government committing to pay Origin to keep all 4 units of the 2.88 gigawatt (GW) Eraring open for another two years.

“It represents the decade long failure of the NSW Government to accelerate the evaluation and approval of key new replacement generation capacity ahead of the closure of coal power generation assets that are known to be at the end of their design life, putting at risk energy security for the people of NSW. Clean energy infrastructure projects have been left for years languishing in the development pipeline.

“It stands as a symbol of the failure of privatisation of key strategic assets like the biggest coal fired power plant in the country without consumer protections.

“It shows the failure of the Australian Energy Market Operator (AEMO) to respond to the climate and energy crisis and accelerate the approval and grid connection of key new generation and firming assets to the grid.

“And it highlights the failure of Origin to ensure a viable long term coal supply for the single largest coal power plant in the country or to invest in zero emissions solutions ahead of closure.

“Critically, this decision is a powerful disincentive to clean energy investors that sends exactly the wrong signal. It will act as a deterrent to private capital looking for opportunities to invest in the energy transition as the world rapidly decarbonises.

“Instead of action to position the state as a clean energy investment destination, we now are lumped with CoalKeeper 2.0, with households taking the hit to put the end of life coal clunker on life support.

“This is a mighty blow to the people of NSW crushed under fossil fuel energy price hyperinflation and cost of living pressures.

“This will be another cost borne by each and every residence in the state to both fund the subsidy and wear higher wholesale power prices as new firmed renewable electricity capacity is crowded out and undermined by the policy back-flip.

“That’s $450m that could be going into the pockets of people struggling to pay energy bills, like in QLD where every household will receive a $1,000 Cost of Living Rebate on power bills.

“That’s half a billion that could be used to incentivise new solar on more roofs across the state, and to subsidise batteries and heat pumps for homes, apartments, renters and businesses, permanently reducing their energy bills.

“That’s ten times the amount NSW has committed to energy upgrades (solar, heat pumps and insulation) on community and government social housing across the state .

“The NSW government has now left action on transition and a decision so late that they have no other option than to capitulate.

“The solution is and always has been to pivot state public capital investment to expedite firmed renewables and prioritise approvals of the multitude of private investment proposals for new generation capacity, including battery firming.

“We call on NSW Energy Minister Penny Sharpe to commit public funds at speed and scale to an accelerated roll out of consumer energy resources, such as rooftop solar and batteries, particularly in the lagging commercial and industry sector, leveraging the 50% decline in solar module and battery export prices out of China in the last 12 months. This can be done at speed and scale within the existing grid network system.

“And we need NSW Planning Minister Paul Scully to explain how many of the 18 new project assessments he promised the people of NSW in 2024 have been, met five months into this year. And to then give a weekly update on his department’s progress in permanently solving the rolling NSW energy crisis by accelerating low-cost zero-emissions firmed energy solutions.

“We call for an immediate pause on all new export coal mine approvals and a reallocation of the state’s clearly limited planning capacity to focus on the clean energy solutions needed for NSW citizens as the only priority.

“We have a combined energy, climate and cost of living crisis. There is zero excuse for any further delay. Energy consumers have had enough and want solutions to permanently reduce energy prices and ensure energy security in the state now – solutions consistent with slashing emissions and meeting the state’s emissions reduction targets as the climate crisis mounts.

“And investors want policy certainty from governments demonstrably committed to energy transition.”

Tim is

/Public Release.