Eraring 2029: Time to Face Hard Truths About Our Energy Transition
- Andrea Leong
- Jan 21
- 3 min read
Eraring coal-fired power station, Australia’s largest generator at 2880 megawatts, had been set to close in 2025. This was extended until 2027 in a deal with the NSW government which included an offer of public funding to subsidise the operator, Origin Energy, for losses up to $225 million per year (Origin has not drawn on this funding). Origin has now confirmed that Eraring will operate until 2029.
The need for the extension was highlighted by the Australian Energy Market Operator (AEMO), which manages the electricity grid. AEMO’s 2025 Transition Plan for System Security report, released last month, warned that removing the large coal generator from the system in 2027 would result in a less secure electricity grid more prone to frequency oscillation and blackouts.
As environmentalists, it’s understandable if we feel intense disappointment and perhaps anger at this decision. Incredibly, the NSW environment minister tried to spin the news as a positive for the climate by saying the extension is, “contributing to NSW’s 2030 emissions reduction target”.
Burning coal for longer is of course the opposite of emissions reduction. The extension of Eraring’s operations should not come as a surprise; it is the inevitable result of slow progress over the last two decades as our climate and energy policy has been consumed by culture wars. When it comes to decarbonisation, we’ve made a start, but we have far to go.
As record amounts of renewable generation capacity is being built, it’s more important than ever to keep in mind that installing wind turbines and solar panels is not, in itself, climate action. While our wind- and solar-generated electricity is a welcome addition, Australia’s fossil fuel consumption is relatively unchanged this century and about 85% of our economy runs on fossil fuels.
It should not need to be said, but climate action entails actually displacing fossil fuel use: replacing the coal, gas and oil that we burn (in combustion engines, or for process heat, or to generate electricity) with something else that does the job just as well or better, with low emissions. If we’re serious about learning from evidence rather than repeating mistakes, we must start building the infrastructure that can actually carry the full load of an electrified economy—not just scrape by while coal plants limp along.
So how do we actually do it?
What is common to low-carbon grids in high-energy nations around the world? Reliable clean power: generally hydroelectric or nuclear generation, with geothermal playing a substantial role in a few lucky places like Iceland and New Zealand. Australia has already built most of the hydro it reasonably can; there is no vast new reservoir of untapped water waiting to save us.
Nuclear energy, then, would be a boon to Australia’s energy mix if decarbonisation matters to us. Nuclear power plants don’t just generate electricity, they also provide the system strength that AEMO warns us is vital, and which has traditionally been provided by coal-fired power. The best time to have started building our first nuclear power plant was 20 years ago, but the second best time is now. We can pat ourselves on the back for our 50% low-carbon electricity grid, but we have so much more to do to electrify our transport and industrial processes, and to generate the clean electricity to supply those sectors as they electrify. And this is before accounting for any additional demand, e.g. for data centres or green steel.
It’s never too late to build the reliable clean energy generation infrastructure that can actually replace fossil fuels. The future is long, and it will demand vast amounts of clean electricity. If we are serious about climate action, prosperity and energy security, then we must start building the systems that can carry us there.