Australia’s biggest coal-fired power station may continue to operate for up to four more years, with the New South Wales Government expected to extend its operations.

It is understood that the State Government will provide Origin Energy’s Eraring Power Station with subsidies for two years and permits to run for an additional two years.

Origin Energy does not have long-term contracts for the four-unit plant. The subsidy is expected to be aimed at capping the price of coal but may also extend to other aspects of the plant’s operations, including an expansion of its coal-ash dams.

An Origin Energy spokesperson said, “We remain in discussion with the New South Wales Government on the closure date for the Eraring Power Station.”

In a statement to The Guardian, a spokesperson for the Federal Minister for Climate Change and Energy, Chris Bowen, said, “Both governments are focused on ensuring a reliable and affordable transformation of the electricity sector.” 

In its updated Medium Term Projected Assessment Of System Adequacy Report, the Australian Energy Market Operator (AEMO) identified that low reserve conditions as annual unserved energy exceeds the reliability standard in New South Wales between May 2025 and May 2026.

It also declared low reserve conditions in New South Wales between November 2025 and March 2026, when forecast demand exceeds supply in some circumstances.

An AEMO spokesperson said that the low reserve conditions were based on the expected closure of Eraring Power Station on 19 August 2025.

Image credit: Steve Tritton/

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