Essay by Eric Worrall
“… after warnings the shift to renewable energy has fallen off track.”
NSW to pay Origin up to $225m a year to keep Eraring open
Ben Potter Senior writer
May 23, 2024 – 9.29amThe NSW government will extend the life of Origin Energy’s Eraring coal-fired power station for at least two more years until August 2027, at a cost of up $225 million a year, after warnings the shift to renewable energy has fallen off track.
Under the deal, Origin will seek to generate a minimum of six terawatt hours a year – about 3 per cent of total generation in the eastern states’ National Electricity Market – from the giant plant on the shores of NSW’s Lake Macquarie.
Origin will pay the government a fifth of any operating profits up to a maximum of $40 million a year should the plant operate at a profit during the extension period.
But if Eraring is run at a loss, Origin can call on the state to subsidise the plant’s operating and capital costs, capped at $225 million per annum.
Origin may run the plant until 2029 if it chooses but the state will not pay any compensation after August 2027.
…
Read more: https://www.afr.com/policy/energy-and-climate/nsw-to-pay-origin-up-to-225m-a-year-to-keep-eraring-open-until-2027-20240523-p5jfxc
Just as well renewables are the cheapest energy ever, otherwise all these enormous subsidies for all different forms of power would be costing NSW taxpayers a heap of money.
I wonder if other coal plant operations will notice how easy it is to squeeze big money out of desperate, net zero obsessed politicians? Politicians who are barely beginning to wake up how badly they have stuffed up?
Just as well the government has decreed everything will be back on track by 2027.
Do I need a /sarc tag?
Duplicitous wind and solar at 20%, more or less, grid penetration adds significant firming and imposed costs to conventional sources that will inevitably require subsidizing both the RE (Ruinous Energy) and conventional sources. Battery storage for the full output of any wind or solar array is forever, yes, forever too expensive, >10 times too expensive. It’s not complicated.
Maybe the politicians will finally wake up to the fact that they are going to be the people holding the bag of crap when it all falls down.
The recipients of billions will be long gone, and the people will want some retribution. I’m just glad there are going to be people here who can say “I told you so!”
The politician is only ever held responsible, outside of a serious crime according to established law, when it is acceptable for a gang of peers to provide retribution using one knife each.
That’s why carbon is your friend.
nice- I’m gonna steal it!
I can’t wait for Mr. Stokes to stop by and explain that it’s certainly not what it looks like.
I dont miss him. In fact, i get rather annoyed by the accelerating to and fro between him and other posters. I would rather see him ignored, like u dont make eyecontact w an agressive drunk..
I think Nick Stokes adds value, at least some of the time.
Having someone on a discussion thread who disagrees with you helps keep things sharp.
We need to be evidence based above all else. Accepting and responding to criticism, putting evidence ahead of belief, is what makes us better than our opponents.
Totally agree Eric.
However, Nick et al often demonstrate a compulsion to ignore indisputable facts about the limitations of wind & solar to provide reliable utility-scale electricity needs for modern societies.
Hence “some of the time” 🙂
I really want to see the woke governments explaining these kinds of deals, that shore up the grid by guaranteeing supply, by saying to the climate fanatics “don’t worry! Wind and solar are the cheapest to build and use and there’s no problem at all with them, so the coal plants will never be used! Just trust us!👍”
Eraring was fully commissioned in 1984. It is now 40 years old. The average age of coal fired steam generation retirement in the US is 42 years. So it is approaching typical retirement. The question is what will replace it after, as it supplies about 25% of NSW electricity. Cannot be renewables.
This is what hitting the wall looks like.
In the UK, no new CCGT plants have been started for the last 15 years, with the result that over 9GW (1/3 total) capacity is over 25 years old and is fast approaching retirement, and most of the rest is 20 years old or more.
So over the next 5 years or so they’re going to lose 1/3 of their dispatchable capacity, and they’re struggling to meet demand on low wind days already.
Is there an economy in tear down for maintenance and upgrades to get another 40+ years?
How much of the physical building and local infrastructure would need maintenance/upgrades as part of it?
Can it be done in phases?
My understanding is that end of life for coal generation is multiple things all growing problematic at the same time. Probably engineered that way.
I know of no coal plant in the US that got maintenance and upgrades to last another 40 years beyond the 42 average retirement age. FERC has a list of existing coal by capacity and age. Nothing reaches 50.
What happens here (US) is that the old end of life plant gets torn down, and new CCGT is placed on the site. That is what FPL did with two 40+ year old oil fired steam generating stations in south Florida. Replaced a total of 4GW in 4 units in two locations with two new CCGT, each old location got 2.25 GW new capacity comprising 3 gas turbines feeding one steam turbine. Warrantied by GE to last more than 40 years. Reused all the location transmission infrastructure with some upgrades.
The problem is that all options are expensive, and are not economically viable in the current environment.
> The problem is that all options are expensive, and are not
> economically viable in the current environment.
I agree that is what is reported and may well be true.
I just wonder if the financing arrangements for doing such work are discouraged because the lending institutions who used to financed upgrades or new systems have been captured by politics/media/activists who demand ESG principles and so getting the finance is so much more difficult than it used to be.
I think, more simply, the capital costs of building or refurbishing a CCGT plant will never be repaid in a market where the asset might expect 30% (and falling) usage and a likely artificially shortened lifespan due to regulation.
Rud Istvan: “My understanding is that end of life for coal generation is multiple things all growing problematic at the same time. Probably engineered that way.”
Friends who were working power plant replacement projects two decades ago in 2004 told me that after 40+ years, a coal-fired plant has become so consumed by corrosion issues and by a variety of other problems it becomes cheaper just to replace everything except the railroad tracks into the plant and the grid connections.
After 2010, all their planning work shifted towards looking at gas-fired technology as the preferred replacement for a coal-fired plant. And then later at wind & solar as various state-mandated CO2 emission targets came into play. None of the engineers I know personally are now doing work on new gas-fired capacity. It’s all wind & solar.
Thanks for that . The gas fired plants are 2 types. The peaker plants based on aircraft gas turbines which have short operating periods but at a quick response. The downside is higher maintenance costs/overhauls
The heavy duty gas plants are for base load long duration cycles and cost more to install but not as much maintenance for their output GW
Agreed Rud, let’s not forget the catastrophic Callide generator failure in 2021.
Sometimes the choice of when end of life happens for decrepit coal generators is taken out of our hands. The real failure is the failure to build new coal plants.
“The real failure is the failure to build new coal plants.”
That’s what I was going to say.
No matter, I’ll say it anyway. The real failure is the failure to build new coal plants.
Or keep up with the planned redundancy due to State sponsored fickles dumping. Bearing in mind large coal power stations have multiple boiler/generators with one down for refurbishement/replacement. If fickles are cutting their lunch and they’re not wanted long term naturally they run them all down to eke the last revenue out of them.
And NSW needs the coal at the moment. Coal is sourcing 97% of its power and only 2% from wind. It is 4am Friday with a big fat high pressure system sitting over most of Australia. A few more hours before solar kicks in.
Will these politicians never learn? And it will be the taxpayers who will pay the subsidies through our taxes and power bills.
Access live power generation by source here: NEM-Watch
https://www.nem-watch.info/widgets/reneweconomy/
Oh dear.
I’m surprised that a renewables religious outfit like reneweconomy would let those electricity supply tables be published.
Publicly admitting to such dismal renewables performance is usually career-ending in the world of climate catastrophism.
Although it says “reneweconomy” in the suffix of the link..
I not sure that propaganda group actually has anything to do with Nem-Watch.
ok further reading finds this statement..
“surprised that a renewables religious outfit like reneweconomy would let those electricity supply tables be published.”
You are right , but they ignore these sorts of numbers and chose to only use annual output numbers when for the 2/3 year wind and solar ‘look better’
Another trick is talk about nameplate capacity for wind- when only 20% of that could be useful for despatchable power. Further diminished by talking about wind farm out put for “households”, which might only be 1/3 of the demand ignoring industrial, commercial etc and even the losses over the grid which might be up to 10%
Yes, and these facts keep getting put right in front of the eyes of wind & solar advocates, but they deliberately ignore or deny them, and rely instead on their “belief” in the efficacy of w & s.
It’s a classic religious position, isn’t it?
Actually, none of wind output is dispatchable
Sometimes it seems like nothing is career-ending in the world of climate catastrophism. Sometimes? Always.
Nem-Watch is good for seeing comparisons between states demand and fuel usages, but doesn’t show transfers
Use it in conjunction with AEMO | NEM data dashboard which shows transfers in the “dispatch overview” and “fuel mix” by % in each state.
Oh and because of the low wind conditions…
South Australia currently using 6% diesel generated electricity…
At least diesel is renewable… just go out and buy some more.
Strange that the Labor / Greens / Teals politicians are never heard crowing about their always-reliable diesel generated electricity supplies.
Do these generators need back-up or storage as well?
I’m sure hamster wheels will soon have to be in the mix for renewables back-up & storage measures.
I doubt the Labor/Green/Teal politicians are even remotely aware that SA often has to turn on their diesel gens on cold winter mornings.
Those clowns live in their own little make-believe world, well away from reality.
GAS is the main reliable source in SA.. diesel is an addition when things get “tight”.
They may even get 20 minutes or so from their battery at times… if it is fully changed.. using gas.
ps here is their current supply
battery is purple, diesel is orange. gas is aqua
(why does it show up all blurry.. click to enlarge)
See what happens if you start with a much higher pixel count, that should get rid of the blurrs
trying again…
nope. didn’t work.
Thank goodness.
I thought my cataract had turned itself up to 11.
10am in Qld. Nationally, FF sources supplying 73% to the grid.
A Guardian headline reporting this would bray –
“RENEWABLES DELIVERING A WHOPPING 27% OF ELECTRICITY TO THE NATIONAL GRID”
27% on going 24/7 x 365 days?
Renewables are crowed about if they supply a large percentage of demand for one minute.
It’s generally half hour periods for wind in the UK. 🙂
Can it get any worse paying subsidies to both so called renewables and fossil fuel generators.
The lunatics are well and truly in charge.
Yes. It can get worse. They will also pay subsidies to the consumers of electricity.
Let’s get the politicians and so called climate scientists OUT of the energy business.
Let engineers assisted by financial professionals take over.
One minute, governments are accusing these companies of wrecking the climate, next, they’re paying them millions to keep the lights on.
It’s almost like they don’t actually believe “the science” they tell us says we’re on the brink of climate catastrophe, but that we’re expected to believe without question.
Money is no problem; the peasantry will cough up
Yet another example of how incompetent government is. Get the government out of the energy business. Build new fossil fuel and nuclear generators and remove all wind and solar from the grid.
Story Tip
Silent and Deady – Pedestrians may be twice as likely to be hit by electric/hybrid cars as petrol/diesel ones
https://www.bmj.com/company/newsroom/pedestrians-may-be-twice-as-likely-to-be-hit-by-electric-hybrid-cars-as-petrol-diesel-ones/
There are already automobiles sporting sound systems to the outside that mimic high powered gasoline engines. By and by the world will become still noiser.
A wannabe V8 🙂
Now that EVs have become popular, they have to find some other excuse to kill off personal transportation for the working class.
Separate note on generating economics. For countries with abundant natgas (US, Aus) CCGT is the way to go. For countries without (China) ultra supercritical coal is probably the way to go. Imported coal is cheaper than imported LNG.
We have a good US comparison. There is 1 newish USC coal plant in the US, Turk in Arkansas. 600MW, took 4 years to build, cost $1.8billion or about $3000/kwe. Compare the new FPL Port Everglades CCGT. Took 2.5 years and cost (FPL numbers) $670/kwe. Plus when comparing to inexpensive Powder River Basin sub-bituminous steam coal (fuels Turk), any nat gas price under about $8/mmbtu is a cheaper fuel.
The build costs should include the maintenance costs and the fuel costs.
Coal is cheaper than gas – when the plant is close to the supply
the longer build time for the coal plant means a much longer production life.
A GT plant life will never be 40 years
Read the comments above, coal plants corrode away, at least the old ones now nearing retirement.
Why can nuclear basically go a century (with refurb at 60 and 80 years) and nothing else comes close? In spite of all the radiation?
Or, is it designed for long life from the beginning because it’s so capital intensive, and fuel costs are negligible in comparison?
Makes you wonder why wind and solar are built so cheaply (check out the latest tornado and hail videos) in spite of their fuel being free. Just in for the subsidies and credits?
China has an interesting take on this, some of their coal plants are actually gas plants, the coal is put through a gasifier before being combusted. Maybe the best of both worlds.
“…after warnings the shift to renewable energy has fallen off track…” And what track would that be? Think about how much power/money was required to force this bad decision involving something so critical to their well being when even an engineering 101 class would prove it wrong.
This works out at less than $2/MWh. Consumers currently pay $46/MWh to WDG owners above the price they get in the wholesale market. Mandated theft via the RET with retailers as the bagmeen.
.
Transitioners will no doubt be pleased to know-
Construction of the South Australian component of Project EnergyConnect, the new high-voltage transmission line between South Australia and New South Wales, has been completed.
Construction complete on South Australian side of new electricity interconnector – ElectraNet
For rational South Australians it’s a case of HELP!!!
Electricity to and from Broken Hill or Mildura…..
…. Whoopy Doo !!
SA interconnects are a pittance compared to NSW and Victoria demands.
Middle of the day, and South Australia is running on 73% GAS, 7% diesel. !
So much for their much ranted about wind and solar !!
Scintillating stuff as SA having gone all in on fickles early naturally wants a NSW interconnector to Hunter black coal to add to the existing one to Vic brown. That way SA can dump excess fickle energy east and get reliable insurance back. Naturally NSW is Eraring to go from their perspective as they’re supposed to be going all out with fickles too just like Vic is.
Welcome to the lefty hive mind. They’re going all in to try and disprove a fundamental axiom of engineering- namely you can’t build a reliable system from unreliable componentry. I don’t make this up. These people are experts with letters after their names and they’re going to change the weather with this stuff.
….plus the Gummint will dole out more taxes to well off homeowners to buy Chinese coal fired batteries-
Battery bonus for solar homes after coal plant lifeline (msn.com)
Repeat after me dis and misinformers… fickle energy is cheapest…fickle energy is cheapest..
Why pay $40 million if they make a profit ? seems the privatization of public utilities has resulted in some unexpected costs to the public a decade or two later….not to mention that the cost of battery storage for the new W&S “cheap” generation costs as much as an entire coal plant….
The issue is barriers to entry for new players, without the constant threat of competition you don’t get the price benefits a free market can deliver.
Occasionally I meet very wealthy people through my business, the last time I met such a person I asked him when he planned to invest in the Australian energy market. He thought the question was a funny joke.
At last the penny is dropping that so called green ideas simply do not do what is needed. Only 20 years too late.
Central planning at its finest!
Nup you can’t have soda pop underground either so feeding the plants it is while the brains trust figure out the next great leap forward-
Carbon capture project rejected over groundwater fears (msn.com)