The NSW Independent Planning Commission has approved a five million cubic-metre expansion of Eraring Power Station's 35 million tonne coal-ash dam, saying it is in the public interest.
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But one of the plan's major critics says the expansion shows that "addressing legacy pollution isn't a priority".
The commission announced its decision on Monday afternoon, which gave the green light for Origin Energy to create a new ash placement area on the dam's western side, but within its existing footprint.
In its announcement, the commission said it would extend the life of the dam until 2024 and support the ongoing operation of the Lake Macquarie station - which catered for a quarter of the state's power needs.
The expansion was referred to the Independent Planning Commission after the NSW Department of Planning recommended in October that it be approved.
The commission said concerns raised in 127 written submissions included "air quality and associated human health impacts, groundwater and surface water impacts, biodiversity and rehabilitation, the beneficial reuse of ash and public safety concerns about the stability of existing dam structures on the site".
It comes less than a fortnight after the government confirmed Origin would pick up the bill for a new sport and recreation centre after a complex at Myuna Bay was shut down last year because of the risk the ash dam posed in the event of an earthquake.
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The commission said the expansion was in the public interest but conditions were put in place to "prevent, minimise and/or offset adverse social and environmental impacts; set standards and performance measures for acceptable environmental performance; require regular monitoring and reporting; and provide for the ongoing environmental management of the development".
A list of 12 conditions have been published on the commission's website, including that a community consultative committee be formed and meet regularly and that Origin be required to achieve a target of 80 per cent coal-ash re-use by 2021.
Coal-Ash Community Alliance welcomed the condition to increase the rate of re-use, but said air and water pollution remained "burdens" for the Lake Macquarie community.
"We believe now is the time to begin real conversations about rehabilitation, remediation and the future of these toxic sites," a spokesperson told the Newcastle Herald.
NSW Greens mining, gas and coal spokesperson Abigail Boyd said the decision and its timing - two days before Christmas - were "incredibly disappointing".
"At the very least, we would have expected the extension to be subject to the recommendations that will come out of the Upper House inquiry into the rehabilitation of NSW's ash dams next year," she said.
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