Labor and Coalition face off over power privatisation, as predicted power shortfalls put more pressure on Origin Energy to keep Eraring power station going beyond 2025

With Snowy Hydro 2.0 pumped hydro scheme and its Kurri Kurri gas turbine both behind schedule, the Australian Energy Market Operator (AEMO) has raised concerns about electricity shortfalls should Eraring close as scheduled from August 2025.

The latest speculation came after NSW Treasurer and Energy Minister Matt Kean was quoted as saying the state government would be prepared to intervene on the Eraring closure.

"Of course we're not ruling things in or out," said on Eraring.

"The government's already demonstrated that it will do what is necessary to protect families and businesses at this time."

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The Labor opposition has seized upon the interview comments, with the shadow minister for energy and climate change, Jihad Dib, saying the privatisation of power generation has left NSW vulnerable to power shocks and shortfalls, with little leverage to fix the threat.

"The Liberals sold Eraring for $50 million in 2013 - and today it was confirmed they are looking at buying it back once again," Mr Dib said.

What he does not say is that Eraring's power output was sold to Origin Energy for $3.3 billion in 2010 by the Keneally Labor government.

An Origin Energy spokesperson said yesterday that the company would not be responding to the political arguments being made by both sides of politics in the leadup to the March 25 election.

But they said Origin's position was unchanged. The company had lodged a notice to withdraw with AEMO that could see the station - the state's largest and capable of meeting 25 per cent of typical power demand - close in August 2025.

But as it had said at an investor presentation just weeks after the closure date was brought forward in February last year: "If the market does not transition as expected, the timing of Eraring's exit can be managed."

Despite the speculation generated by Mr Kean's comments, a spokesperson for the Treasurer told the Newcastle Herald that the ball remained in Origin Energy's court.

"The Government is not considering an extension of Eraring, which is entirely a matter for Origin Energy," Mr Kean's spokesperson said.

"Thanks to the Waratah Super Battery [at the former Mummorah power station site], there is no forecast gap in the reliability standard in 2025. What's disturbing is that Chris Minns today announced the dangerous nationalisation of this power station for ideological reasons."

Eraring had been due for closure at the projected end of its life in 2032, but Origin brought the date forward last February to as early as August 2025.

Amid the speculation this week, Origin CEO Frank Calabria said that date was still the target.

"That's still in our base case, but nevertheless there's a lot that's got to happen for us to then make that final call," Mr Calabria said.

Eraring's problems with coal supply from the nearby Myuna Colliery - which had run into technical difficulties underground - was one of the precursors to the combined intervention of the state and federal governments into the domestic coal markets, putting a cap on prices and ordering all of the state's export-oriented mines to put some coal aside for domestic use.

The coal market has cooled considerably since then, as reported in Saturday's Herald, and a potential sale of Origin to a consortium organised by the Canadian investment giant Brookfield Corporation is another complicating factor because the company could be under new management well before a final decision on Eraring was needed.

The Brookfield consortium is offering $8.90 a share in a bid that values Origin at $15 billion. Origin has told shareholders this revised bid "has the potential to deliver significant value to shareholders" and is negotiating with the would-be buyers.

Origin told the market last month it was negotiating with contractors on its proposed Eraring battery, which on paper has a similar scale to the Waratah battery at Wangi.

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