Investors back renewables as power plant shuts down

The NSW government says it will liaise closely with local governments after receiving $100 billion worth of investment proposals for the Hunter-Central Coast Renewable Energy Zone (REZ).

The investment represents almost 40 gigawatts worth of renewable generation and storage projects, Treasurer and Energy Minister Matt Kean said on Wednesday.

Matt Kean

Mr Kean revealed the investments a day before Origin Energy announced that Australia’s biggest coal-fire power plant, Eraring Power Station on the shores of Lake Macquarie, had applied to the Australian Energy Market Operator (AEMO) to shut down by 2025.

Mr Kean said renewable energy zones were vital to ensuring the future reliability and affordabily of electricity as traditional coal fired power stations continued to close.

The Hunter and Central coast regions were ideal for a REZ because of existing power stations, rehabilitated mining land and transport and network infrastructure, as well as a skilled workforce, he said.

Mr Kean said registrations of commercial interest in the REZ have been made in 24 solar energy projects, 20 wind energy projects, 35 large scale batteries and eight pumped hydro projects, with the equivalent annual output of 10 coal fired power stations.

The government says the response demonstrated market interest in Renewable Energy zones with similar sites in the state’s Central West, New England and  South West regions attracting a combined 95 gigawatts of interest.

The economics of coal fired stations are being put under increasing, unsustainable pressure by cleaner and lower cost generation, including solar, wind and batteries.

Origin Energy CEO Frank Calabria

The Energy Corporation of NSW, which is overseeing planning for the Hunter-Central Coast REZ, will engage with stakeholders including councils in the Hunter and Central Coast regions including Central Coast, Cessnock, Dungog, Lake Maquarie, Maitland, Midcoast, Muswellbrook, Newcastle, Port Stephens, Singleton and Upper Hunter.

An indicative geographical area of Hunter-Central Coast REZ is being mapped out and the Zone is expected to be formally declared by mid-year.

Super battery

Mr Kean says the government will accelerate transmission upgrades and work with industry partners to install a 700 megawatt super-battery to make up for the closure of Eraring.

The Waratah Super Battery will release energy into Sydney Newcastle and Wollongong.

Frank Calabria

The minister expressed disappointment over Origin’s announcement it will be closing the Eraring Power Station ahead of schedule but said energy security wouldn’t be affected.

“Our giant grid battery will act as a shock absorber, so that transmission capacity currently kept in reserve to handle shocks, such as lightning strikes, can be freed up to transfer energy to consumers,” he said.

“AEMO has advised that this additional transmission capacity will give the State’s consumers access to enough existing electricity generation to meet the Energy Security Target at the time Eraring closes.”

The government will also accelerate tenders for new energy supply through the NSW Electricity Infrastructure Roadmap and boost the development of pumped hydro.

“We are also establishing a Transmission Acceleration Facility to accelerate the delivery of priority transmission projects and Renewable Energy Zones,” Mr Kean said.

Origin Energy said to accelerate its exit from coal-fired generation reflected the transition of the national energy market as the nation moved to cleaner sources of energy.

“The reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower cost generation, including solar, wind and batteries,” Origin CEO Frank Calabria said in a statement issued on Thursday. 

“It has become increasingly clear over the last few years that the influx of renewables has changed the nature of demand for baseload power. 

“At the same time, the cost of renewable energy and battery storage is increasingly competitive, and the penetration of renewables is growing and changing the shape of wholesale electricity prices, which means our cost of energy is expected to be more economical through a combination of renewables, storage and Origin’s fleet of peaking power stations.”

The plant was originally slated for closure in 2032.

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One thought on “Investors back renewables as power plant shuts down

  1. Minister Matt Kean is like a voice of sanity. Calm and resolute. Australia has the smarts to move us into renewables. We just need the Federal Govt and their mates to get out of the way

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