A clean energy consultancy group is questioning the New South Wales government’s decision to extend the life of an aging coal-fired power station.

ABC News reports that the criticism of the deal struck between the state and the owners of the 43-year old Eraring plant comes from Nexa Advisory. In terms of the deal, Australia’s largest coal-fired power station, which supplies about 25% of NSW’s electricity needs, is to be kept open for two additional years, until August 2027. The deal came about on the back of supply concerns that arose when the plant’s owner, Origin Energy, announced it would bring forward the plant’s closure by seven years, to August 2025. The state government agreed to cover the plant’s operational losses of up to $225 million a year from 2025. Origin Energy has until the end of March to opt into the underwriting deal for 2025-26.

According to ABC’s report, Nexa maintains the timeline “leaves the door open to further taxpayer support, beyond the current deal and argues against further taxpayer assistance for Eraring, given the plant’s unreliability due to frequent outages.” Nexa analysed Eraring’s performance data and found “each of its four units had experienced about 6,000 hours, equivalent to two months, of downtime annually over the last four years and that these outages had affected the plant’s availability when it was needed most.”

Outages increase wholesale electricity prices because more expensive forms of power must be called in to meet demand when renewables cannot. Those price increases are eventually passed onto households and businesses.

The Australian Energy Market Operator forecasts 90 per cent of coal-fired power stations will close by 2035, with the last shutting in 2038.

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