Eraring is only the beginning of the end for coal

The early closure of Australia’s biggest coal-fired power station in 2025 will test the energy grid and management of the inevitable transition from coal as these plants become uneconomic to operate.

Origin’s decision to shut Australia’s largest coal-fired power station in 2025, seven years ahead of schedule, is hardly welcome news for the federal or the NSW government.

The “disappointment” expressed by Federal Energy Minister Angus Taylor and NSW’s Treasurer and Energy Minister Matt Kean might be the one thing the two of them have ever agreed on when it comes to energy policy.

But it’s also an indication of how dramatically the political environment as well as the energy market has changed in the past few years. In 2017, when AGL gave five years’ warning of a similar early closure of another ageing coal-fired power station in the Hunter region, the Turnbull government reacted with near hysteria.

Malcolm Turnbull berated AGL’s “multimillionaire American CEO” for wanting to drive up energy prices by reducing supply when the “screamingly obvious” option was to keep the 50-year-old Liddell power station running for longer.

One prime minister and two AGL chief executives later, the only screamingly obvious option is that more early exits of coal-fired power from the grid is inevitable.

AGL’s eventual compromise was that Liddell would not shut the last three of four turbines until April next year rather than this year. But the first turbine will close this April and the company has just announced another two of its newer coal-fired power stations will also close some years earlier than scheduled in the early 2030s and 2040s.

The rapidity of the shifts in technology and energy economics makes even that timetable look far more dubious.

Read the full article published in the Australian Financial Review 17th February 2022