Climate change concerns versus reliable electricity: the equation for governments as daytime renewables flood power market

Threats to Eraring's viability are not new.

It provides about one quarter of NSW's power needs and is much younger than the smaller Liddell station, which will shut one unit in April and the remaining three in April next year, after the summer generating peak.

IN THE NEWS:

By Origin's own admission, it does not intend to replace Eraring's capacity.

A 700-megawatt battery - first announced in February last year - will add considerably to the state's power storage capacity, but batteries do not generate electricity on their own.

That said, Origin is not obliged to replace Eraring.

Although Queensland still has state-owned generators, most NEM capacity is privately owned and operated.

There are any number of private-sector renewable energy projects proposed for NSW, as Origin noted.

State Energy Minister Matt Kean - who confirmed knowing for "a number of months" of Origin's intentions - says the Australian Energy Market Operator (AEMO) advises him the grid will have sufficient capacity to absorb a 2025 closure.

Renewables advocates have applauded the intended closure, and express similar confidence that renewable energy can do the job.

Others, including employers' peak body Business Hunter, are less sanguine, noting "huge gaps and risks for business and industry in accessing reliable, despatchable power supply at affordable prices".

As stated previously, the main concern is electricity storage.

There is no fatal obstacle to building a renewable grid producing 24-hours' worth of power in 12 hours (with the overnight supply stored in batteries and hydro).

But a double-sized grid and a substantial overhaul of the transmission grid will prove expensive.

POWER PLAY:

Mr Kean said yesterday that the government was committed to lower power prices but he also said costs of the post-Eraring battery and "all transmission infrastructure" would be recovered from consumers*.

The grid is being rebuilt to meet longer term climate change concerns.

The private sector might supply most of our electricity, but governments will be responsible if energy transition threatens a presently reliable supply or results in soaring power prices.

ISSUE: 39,801

*From Mr Kean's statement yesterday (Herald italics): "The Waratah battery will be initially funded by the NSW Government through the Facility.

"Over the long term, the cost of the battery will be recovered from energy consumers, as is the case for all transmission infrastructure.

The NSW Government will progress this process through the Electricity Infrastructure Roadmap."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: