THE NSW Government must develop a comprehensive plan to manage the decommissioning of the Hunter's coal-fired power stations to support local communities after Origin Energy indicated its Lake Macquarie Eraring power station could close early, said the Nature Conservation Council.
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Origin Energy chief executive Frank Calabria's confirmation on Thursday that the future of the state's largest power station is subject to continual review, after a push by shareholder activists to bring forward its 2032 closure, puts pressure on the NSW Government to support the Hunter through the transition from coal over the next decade, the council said.
Origin Energy's refusal to confirm the power station will operate until 2032 is the latest sign of significant volatility in the power generation space because of the worsening economics of coal-fired power compared with gas and renewables, despite serious concerns about the capacity of the national electricity grid and market to cope with the shift.
It follows political turmoil from 2016 after AGL announced the closure of the ageing Liddell power station near Muswellbrook.
Mr Calabria said the energy market was "moving rapidly" and Origin Energy was considering "various scenarios" in assessing Eraring's future.
The Nature Conservation Council welcomed the news as "one of the more rational responses to the climate emergency from the energy sector that we've seen for a long time", but it placed greater pressure on governments to respond to support the Hunter region.
Nature Conservation Council analysis showed all OECD coal-fired power stations needed to close by 2030 to meet the Paris Agreement target of limiting global warming to less than 2 degrees.
"While the company has not given a revised scheduled closure date, analysis shows Eraring must cease operations by 2026 to ensure NSW plays its part in limiting global heating to less than 2 degrees," Nature Conservation Council campaign director Dr Brad Smith said.
"The decommissioning of Eraring needs to be part of staged closure of the state's five power stations, including Liddell in 2022, Vales Point in 2024, Eraring in 2026, Bayswater in 2028 and Mount Piper in 2030.
"The NSW Government must urgently develop a comprehensive plan to manage the decommissioning of the plants to ensure local communities are supported through the transition."
Closing Eraring early would mean 14.9 million tonnes less carbon pollution each year and 760,000 tonnes less toxic ash on the Lake Macquarie foreshore, the Nature Conservation Council said.
It will also require significant government support to ensure replacement energy and firming capacity within a national grid and market not designed for renewable energy.
But while AGL and Origin Energy are looking at closing their Hunter power stations, and introducing renewables and firming capacity to replace them, Vales Point power station owner Delta could receive $11 million in Federal Government funds to help extend its operation.