Corporate welfare may keep the lights on. But backing Eraring power station will have other costs for the NSW governmentgovernment has bought itself an insurance policy worth as much as $450m to keep open a power station it couldn’t afford to have exit the grid.up to four years beyond its scheduled August 2025 closure date will cost more than just the price of corporate welfare – there’s also the environmental and economic impacts to quantify.
Other costs are harder to determine. The plant will emit in the order of 20m extra tonnes of carbon-dioxide equivalent – possibly double that if it runs to a final closure date of April 2029. As one rival told the Guardian, Origin brought forward Eraring’s closure by seven years and succeeded in blackmailing the government. Will they be the last?Vales Point, owned by Delta Energy and located near Eraring, may well be the next in line to demand a handout should they threaten to bring forward their closure date.
By one estimate, Origin was more than 1500MW short – a gap it would have struggled to close. Their coal contracts were also exposed to short-term movements that pointed to a management gamble that went amiss. The previous Coalition government played a similar card in managing to get AGL’s ailing Liddell plant to limp past the 2023 election by a month. Eraring won’t close before August 2027 now, or about four months after the next state poll.
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