Origin Energy will close Eraring Power Station as planned in 2027, according to an update provided on the agreement between the utility and the State Government.
Origin Energy has advised the New South Wales Government that it will not trigger the opt-in clause for the first year of an underwriting agreement to keep Eraring Power Station open until 2027.
This means that Origin Energy assumes full responsibility for the profit and loss from the power station’s operations in the first year of the agreement.
The State Government said that as a result, New South Wales taxpayers have so far not paid a single dollar to operate the power station under the deal.
The Federal Government reached the agreement with Origin Energy in May 2024 to operate Eraring until August 2027.
The targeted and temporary agreement addressed the reliability gap forecast by the Australian Energy Market Operator (AEMO) if Eraring closed in 2025 as originally scheduled.
The agreement supports an orderly exit from coal-fired power, ensuring the lights stay on for homes, businesses and industry while New South Wales delivers more low-cost, reliable renewable energy.
Under the two-year agreement, Origin must still:
- Endeavour to generate at least 6TWh each year, the equivalent of the typical annual output of two of Eraring’s four generating units and enough to resolve the forecast reliability gap
- Maintain Eraring’s existing workforce, commit to a maintenance plan and adhere to its licence conditions, which include environmental protections
- Notify the New South Wales Government whether it will opt-in to the underwriting arrangement for 2026–27
Origin intends to close Eraring Power Station on August 19 2027.
The New South Wales Government said it is progressing towards its 2030 renewable energy objectives, having secured more than half the 12GW of renewable energy generation and 40 per cent of the required 2GW of long duration storage.
A detailed summary of the agreement is available online: https://www.energy.nsw.gov.au/nsw-plans-and-progress/regulation-and-policy/agreement-eraring
New South Wales Minister for Energy, Penny Sharpe, said the State Government is serious about keeping the lights on in the state.
“This short, temporary agreement with Origin provides certainty while we deliver more renewable energy and storage to replace ageing coal-fired power plants.”
New South Wales Treasurer, Daniel Mookhey, said, “We are protecting families and businesses from bill shock and power outages while the energy transition continues – without it costing them a cent this financial year.”
