Origin Eraring Agreement

The Government has today announced that it has reached an agreement with Origin Energy to extend the life of Eraring Power Station until 2027.

I believe this agreement was inevitable and is a sensible outcome that will address energy reliability risks and support local employees and the community during this critical time in energy transition. While it is clear we must transition to renewable energy as soon as possible, AEMO has identified potential reliability risks should Eraring close in August 2025 as planned.

Managing the transition away from coal fired electricity to renewable energy was always going to be difficult, this was made even more so by the decision to privatise Eraring Power Station by the O’Farrell Government in 2013. Coal-fired electricity is becoming increasing unprofitable and as a result commercial operators are moving out of the market faster than expected. While there are many renewable energy projects in development, it is unlikely the infrastructure and some projects are going to ready by August 2025.

The deal reached by the NSW Government and Origin is sensible. The extension is time limited with built in caps on compensation payable, confined to the energy output required to shore up the state’s electricity needs. The Government will also be entitled to a profit share if Origin opts into the underwriting arrangement and generates a profit during a financial year. The agreement provides a level of certainty for Eraring’s workforce who have been faced with uncertainty around their ongoing employment for many months. The arrangement also provides transition support for employees and the local community and gives employees access to government training, re-skilling and reemployment programs.

More information on the Government's agreement with Origin, including a summary of the agreement can be found HERE