Eraring coal-fired power station set to benefit from high electricity prices

Already a subscriber?Forecasts that power prices will stay high for years suggest Origin Energy could rake in enough cash from the Eraring power station to avoid tapping a $225 million government compensation fund to keep the facility open, an analyst says.

“The value of the 6 terawatt hours that is being underwritten by the state is in the vicinity of $850 million per annum, based on the forward electricity prices,” Dr McConnell said. “You’d like to think they’d be a long way from a loss of $225 million per annum.”The minimum 6TWh target set by NSW under the agreement represents about 40 per cent of output from the power station over the past 12 months, just over 15TWh.

“This arrangement is in place to the extent that we’re unable to recover costs based on those forward prices. And that’s why there is an opt-in arrangement for each of those years. So, it is difficult to predict just simply because the world’s got a lot more volatile. Origin scheduled the August 2025 closure of the 2880-megawatt Eraring power station in February 2022 but the NSW government sought a reconsiderationas the transition to cleaner energy became bogged down in sluggish approvals processes amid regional community opposition to large wind, solar and transmission projects.

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