Aussie Coal Closure Delayed, to Lower Prices and Stabilise the Grid

Essay by Eric Worrall

I know you will all be surprised as I am that $10s of billions spend on renewables has failed to produce a viable replacement for a single coal plant.

Eraring coal-fired power station to stay open until 2029

In short: 

The country’s biggest coal-fired power station will stay open for another two years.

The Eraring plant in New South Wales was due to shut next year. 

What’s next?

It will now close in April 2029 to “support energy supply” through the transition to renewables. 

The planned closure of Australia’s largest coal-fired power station will be delayed by two years, until 2029.

Origin Energy’s Eraring power station, on the shores of Lake Macquarie, south of Newcastle, was due to shut down in August 2027.

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“Good progress is being made on the delivery of new energy infrastructure including major transmission works and projects like our large-scale battery at Eraring, but it has become clear Eraring Power Station will need to run for longer to support secure and stable power supply.”

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RBC Capital Markets analyst Gordon Ramsay said it was “no surprise” to the market Origin had decided to extend the life of the plant.

Mr Ramsay said the decision was a “result of the slower than expected rollout of renewables in Australia (other than rooftop solar)” which was taking longer than the federal government’s forecast.

“We also assume the government likely has growing concerns about the reliability associated with Australia’s aging coal-fired generation fleet and its possible future impact on electricity supply and prices, particularly after Eraring’s closure,” he said.

Mr Ramsay believed it might also “reduce what may have been higher future wholesale electricity pricing in NSW” had Eraring closed next year.

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Read more: https://www.abc.net.au/news/2026-01-20/eraring-coal-fired-power-station-to-stay-open-until-2029/106247568

I’m confused. If renewables are cheaper than coal, how can keeping a coal plant open help reduce wholesale prices? And if coal is a far greater threat to grid reliability than renewables, as our Aussie federal energy minister has assured us, why does our reliable renewable grid need backup from an unreliable old coal plant?

The next Aussie federal election is due mid to late 2028, so maybe the plan is to shut down the coal plant early in the next election cycle, just in case there are a few minor teething problems with Australia’s Net Zero power grid.