NSW Labor Extends Coal Commitment to Ensure Energy Reliability

NSW Labor has faced criticism from environmental stakeholders for its decision to extend the operation of the coal-fired Eraring power station. The move comes as the state government aims to transition to cleaner energy sources. Treasurer Daniel Mookhey denied claims that the party is giving Origin Energy a $3 billion check to operate the power station. Instead, he stated that the agreement incentivizes Origin to only use the underwrite if there is a sudden change in market conditions. Mookhey blamed the previous Liberal government for the necessity of such agreements due to their decision to privatize the power station. Premier Chris Minns emphasized the importance of ensuring reliable energy while transitioning to net zero emissions. Without the coal-fired power produced by Eraring, the state would face energy reliability risks from 2025, according to the Australian Energy Market Operator. Origin and the government have agreed to an underwriting agreement with various conditions, including profit sharing and limitations on claiming losses. Minister for Climate Change, Energy, and the Environment Penny Sharpe described the agreement as a proactive and sensible step to support the transition to renewable energy. However, NSW Labor has faced heavy criticism from green groups and environmental organizations for not following through on plans to shut down the plant next year. They argue that this decision undermines investment in renewables and fails to demonstrate climate leadership. The state’s Nature Conservation Council called on the government to accelerate the transition to renewables and avoid supporting privatized coal generators. Greens spokesperson Abigail Boyd accused Labor of dragging its feet on cutting emissions and accused them of giving millions of dollars to Origin Energy. The party’s previous reports did not recommend extending Eraring, highlighting the need for increased ambition, investment, and the pace of renewable energy rollout.