The announcement of the closure of another Australian coal-fired power plant has emphasised the need for a nationally co-ordinated approach to manage the retirement of fossil fuel generation and support the transition to renewables, writes Gavin Dennett.

On Thursday, 17 February, 2022, Origin Energy announced it has sought approval from the Australian Energy Market Operator to bring forward the closure of its Eraring Power Station by seven years, from 2032 to 2025.

The Eraring facility, located in the NSW Hunter Valley, is the largest coal-fired power plant in Australia, employing approximately 400 people, including contractors. It is the only coal plant owned by Origin Energy, and in the future the company will generate power from renewables and gas, including a proposed 700MW battery storage facility on the Eraring site.

“Origin’s proposed exit from coal-fired generation reflects the continuing, rapid transition of the National Energy Market as we move to cleaner sources of energy,” says Origin Energy chief executive Frank Calabria.

This announcement comes on the back of news from AGL, on 10 February, 2022, that it has accelerated the closure date of its two biggest coal-fired power plants – Bayswater power station in the NSW Hunter Valley, and Loy Yang A power station near Traralgon, in east Victoria – by several years.

Bayswater will close “no later than 2033” from its original cease date of 2035, while Loy Yang A will close in 2045, from its original close date of 2048.

“The Eraring power station closure shows coal power is finding it increasingly difficult to compete in the electricity market,” says Richie Merzian, climate and energy program director at The Australia Institute.

“These decisions are entirely economic and the closures inevitable. Rather than be taken by surprise by ad-hoc announcements such as this and AGL’s Loy Yang A announcement, Australia needs to be prepared.

“There are thousands of workers in Australian coal-fired power stations. They deserve certainty. Australian policymakers need to be planning to look after communities and workers in coal power regions, rather than selling false hope by trying to prop up a dying industry.

“Renewable energy is here right now. Just yesterday [16 February] more than $100 billion in clean energy projects were proposed for the Hunter-Central Coast Renewable Energy Zone.

“There are excellent examples overseas that Australia could draw on to harness the growing opportunity to invest in regional Australia and continue the tradition of regional Australia being the energy source for the nation.

“Germany has done it with a plan that involving communities, industry and government.

“There is no reason Australia can’t follow suit.

The Clean Energy Council also says these announcements by AGL and Origin Energy emphasise the need for policy and regulatory reform, including proposed initiatives such as the Federal Government establishing a new authority with at least $1 billion funding to invest in transition initiatives in coal communities across Australia.

While some workers are facing anxiety around their livelihood as coal-fired plants close, the clean energy industry is desperate for skilled workers.

“The clean energy sector is facing a growing labour shortage and deepening skills gap,” says Clean Energy Council chief executive Kane Thornton.

“With proper planning for communities and consideration of education and training needs, we could be offering pathways to help transition many coal workers into careers in clean energy.

“The NSW Government announced it has received $100 billion worth of proposals for its Hunter-Central Coast Renewable Energy Zone, which illustrates initiatives such as its NSW Electricity Infrastructure Roadmap can resolve a number of the key barriers to investment, such as access to the necessary transmission capacity, investment certainty through long-term energy services agreements, and addressing slow and costly planning processes.”

The transition to clean energy can be transformative for Australia’s regional communities by not only providing low-cost, renewable energy to consumers, but providing long-term employment pathways in the clean energy sector.

Additionally, it can create greater resilience for regional and farming communities through landholder payments, community benefit schemes and co-location with agricultural production.