This is Australia for you. Run by the Rum Corps for the Rum Corps:
The NSW government and Origin Energy are in talks to extend the lifespan of the state’s largest coal power station by four years, an arrangement that should it materialise will ease concerns about blackouts and price rises but ignite a firestorm of criticism from proponents of renewable energy.
The Labor government and Origin have been locked in talks over the future of the Eraring coal power station for months after an independent expert urged an extension. While The Australian understands an agreement remains unconfirmed, it centres on an extension of two years, with an option for Origin to extend the lifespan by a further two years.
Minister for Climate Change and Energy Penny Sharpe did not comment on the timescale of the extension, but confirmed no deal had yet been reached.
“The NSW government is engaging with Origin on its plans for Eraring Power Station and will not comment while the process is ongoing,” Ms Sharpe said.
To reiterate:
- Through the 2010s, NSW had an excellent plan to decarbonise using low carbon gas from SA, VIC, and QLD as firming power to replace coal while renewables were rolled out and power storage was built.
- On this basis, NSW paid Origin Energy $200m to take the stranded asset of the Eraring coal-fired power station off its hands.
- What NSW did not realise is that Origin was also forming an LNG export cartel that would leave the entire East Coast without gas security of supply forever.
- This means no new gas turbines have been used as coal substitutes since 2012.
- Now the NSW government is forced to go back to Origin, even as that firm gouges the life out of its gas and electricity markets, to beg it to keep Eraring open.
- However, so many renewables have been rolled out, especially rooftop solar, that the price of power crashes during the day, and Eraring runs at losses because coal power can’t be switched on and off.
- Hence, what the NSW government is really doing is negotiating subsidies to keep its former stranded coal asset open at a price you can guarantee adds considerably to Origin profits.
- In short, NSW is now using subsidised coal power to end the use of coal power. VIC is already doing the same via secret deals. QLD is next. And there is no end in sight. Forget the four years on Eraring. Unless we get more gas, NSW will be paying Origin forever to run at increasing losses.
- The Grattan Institute, also sponsored by Origin, recommended much of this, including its energy analyst, Tony Wood, a former Origin executive.
There is no more corrupt, deranged, profiteering, or insane case of a mismanaged power grid and resource endowment in the world. Nowhere is as bad as this.
Reserve 15% of East Coast gas exports now and end the rape of Eastern state energy.
