NSW taxpayers will pay an extraordinary $450 million to fossil fuel giant Origin Energy to prop up its unviable coal-fired Eraring Power Station for two more years, from 2025 to 2027, in a deal the Minns Labor government spruiked as a win for workers.
Origin Energy, which had previously announced the 42-year-old plant would close in 2025, today announced it would keep operating until 2027 under a deal with the NSW government. The deal will see NSW taxpayers fund 80% of Origin’s losses in operating the plant, up to $225 million a year.
Eraring produces around 13-14 million tonnes of CO2 a year and its output of highly toxic pollutants has dramatically worsened recently. A 2018 academic study showed that Eraring was responsible for at least 87 deaths a year from PM2.5 pollution, meaning an additional 174 deaths as a result of today’s decision. Eraring is also estimated to be responsible for 75 low-weight births a year.
Under Labor in NSW, progress on renewables investment has slowed since then treasurer Matt Kean pushed the state to the forefront of the renewables transition under the former Berejiklian and Perrottet governments. In September, Labor announced a $1.8 billion investment, including for transmission lines, with Minns admitting “we are way behind in that endeavour, and we need to get back on track.” At the same time, Minns’ planning department was actively trying to prevent wind farms from being built.
Origin Energy’s share price spiked in early May with reports NSW was going to provide the handout and today was at a six-year high in the wake of the news.
The Minns deal is a variant on Angus Taylor’s notorious “Coalkeeper” proposal, under which the Morrison government energy minister planned to impose an electricity bill tax of up to $400 a year on all households to fund the propping up of unviable coal-fired power stations. After the ousting of the Morrison government, Kean helped lead the state charge to kill Coalkeeper off — seemingly for good.
But the election of NSW Labor — influenced and funded by climate denialist unions like the Australian Workers Union and advocates for coal mining like the Electrical Trades Union and the Mining and Energy Union — has seen the return of Coalkeeper. Only, this time the cost will be worn by all NSW taxpayers, not merely by households.
They will not only be paying for propping up coal-fired power while a fossil fuel-addicted government drags its heels on renewables, but for scores of deaths as a result of coal-fired power.
Is propping up Eraring worth the jobs it saves? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
