NSW to use coal power in transition to no coal


Albo the Wrecker has done it again.

The Eraring power station in NSW could stay open beyond an original plan to shut it down by 2025, after a Minns government review recommended extending the giant coal-fired generator’s operating life to shore up reliability during the energy transition.

Energy and Environment Minister Penny Sharpe is expected to make an announcement in the coming days regarding the fate of the state’s largest coal-fired power station, after reports a reliability review had recommended striking a deal with Origin Energy to keep it open for longer.

A confidential cabinet document obtained by The Sydney Morning Herald revealed that a long-awaited government review had recommended the power station stay open longer than a planned 2025 closure date.

According to the report, the review found the state might need to rely on traditional power sources, including coal and gas, to avoid energy shortfalls as the state transitions to more renewable power sources.

This has nothing to do with shortfalls in renewable power sources. It is all about the lack of gas-fired firming power.

Originally, the plan was for gas turbines to fulfil the firming power role during the transition to clean power storage. But, because the gas export cartel sells it all to China, and has control of the Albanese government, there is no supply reliability.

Any deal struck by the NSW government to keep Earaing open is certain to include subsidies because it cannot be switched on and off quickly like gas turbines can.


This means it will have to keep operating during periods of low prices when it is loss-making, which will become more common as renewable energy sources grow.

Hilariously, the owner of Eraring is Origin Energy, also a member of the gas export cartel.

So, having derailed the energy transition with its gas exports, Origin will now extract economic rents from NSW taxpayers to stop the lights from going out entirely. While it pollutes with gay abandon.


None of this is the fault of the NSW government. The Albanese government is to blame for failing to rein in the gas export cartel when it had the chance during the Ukraine War shock.

So, in a kind of post-truth moment that would delight Jorge Luis Borges, NSW will need to use publically-subsidised coal as the transitional power to no coal!

Why Albo is still in power is the real question.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.