Origin to shut Australia's largest coal power plant by 2025
Australian gas and power retailer Origin Energy will look to close the country’s largest coal-fired power plant by 2025, seven years ahead of schedule, the company said on February 17.
Origin said that the growth in renewable energy is posing challenges to Eraring coal-fired power plant’s financial viability. Closure timing of all four units will be determined closer to 2025, it added. The plant is located about 120 km north of Sydney.
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“Potential Eraring closure is a significant step in progressing the decarbonisation of our business and achieving our long-term ambition to be net-zero emissions by 2050, and the Australian government’s net-zero ambition,” the company said in a corporate presentation.
The company believes that the new capacity additions should more than cover the firm capacity provided by Eraring. Origin is planning a 700-MW battery storage at Eraring with the first phase capacity of 460 MW.
“Battery storage, pumped hydro and gas peaking portfolios are well placed to support renewables generation growth,” it said.
Meanwhile, Origin has reported an 18% year/year rise in underlying profit to A$268mn ($193mn) for the six months to December 31 thanks to higher revenue from its stake in the Australia Pacific LNG (APLNG) project. Its earnings from energy markets dropped due to lower tariffs.
APLNG, a joint venture comprising Origin, ConocoPhillips and China's Sinopec, is Australia’s largest producer of coalbed methane (CBM) and supplies gas to Queensland’s domestic gas market, while also processing CBM into LNG for exports. Origin in October signed an agreement with global energy investor, EIG, to sell a 10% stake in the project.
Post the deal, the APLNG joint venture shareholders comprise ConocoPhillips (37.5%), Origin (27.5%), Sinopec (25%) and EIG (10%). Origin will continue to be responsible for upstream exploration, development, and production activities. The downstream segment is operated by ConocoPhillips.
The transaction is subject to the waiving of pre-emptive rights by ConocoPhillips and Sinopec, as well as other customary completion conditions. Conoco in December vetoed the deal and elected to buy the stake itself.