Eraring was supposed to be gone by now. It isn’t, and the fact that it isn’t tells you most of what you need to know about where this debate has actually landed, as opposed to where the shouting suggests it’s landed.
The short version is this: coal is leaving the National Electricity Market, the timetable keeps slipping to the right, and both of those things can be true at once without contradicting each other. I’ve been writing this correspondent’s version of the same paragraph for a few years now, and each time the closure dates move, someone treats it as either proof the transition is failing or proof it never needed managing in the first place. Neither is right. Agree on the units first, and the rest gets easier.
What’s actually closing, and when #
Liddell shut in April 2023, on schedule, after AGL had flagged it for the best part of a decade. That one went fairly cleanly, all things considered — the Hunter Valley absorbed it, the lights stayed on, and it became the reference case everyone now argues from. Yallourn in Victoria is pencilled in for 2028, Bayswater and the rest of the Hunter fleet through the early 2030s, Eraring at Lake Macquarie originally slated for 2025 and now extended to 2027 under an agreement between Origin Energy and the NSW government, with the state underwriting reliability risk in the interim. Torrens Island’s older units in South Australia have already gone the way of most of that state’s coal history, which is to say there isn’t much left to close.
None of this is secret. AEMO publishes the expected closure years in its Electricity Statement of Opportunities and updates them as generator notices change, and the pattern across the last three or four editions has been consistent: dates get extended, not brought forward. That’s worth sitting with, because a lot of the public argument still assumes the opposite — that coal is falling over faster than planned. It isn’t. If anything the opposite pressure is showing up, generators and governments both leaning toward keeping ageing plant running a bit longer than the original retirement notice suggested, because the replacement capacity isn’t quite there yet on the day it’s needed.
The reliability numbers, and what they don’t say #
AEMO’s own reliability standard is the unserved energy criterion — no more than 0.002 per cent of annual demand able to go unmet in a region, expressed as expected outcomes rather than a promise. Every ESOO for the past several years has flagged a widening reliability gap in the mid-2020s to early 2030s window if committed projects don’t land on time, then narrowed that gap in the following edition once new wind, solar, storage and transmission got firmer commitments. That’s not spin, it’s how a forward-looking planning document is supposed to work. But it does mean anyone quoting a single year’s gap as gospel is quoting a snapshot, not a forecast that holds still.
The gap that matters is less about total energy and more about the shape of a handful of hours a year — hot February evenings, low wind, solar tailing off, demand still climbing. That’s the argument for firming capacity specifically, not just more gigawatt-hours in the annual total, and it’s the piece that gets lost when the debate turns into a straight coal-versus-renewables shouting match. I wrote a bit about how that tension between average supply and peak-hour supply actually plays out in how the NEM dispatches power every five minutes, and it’s the same mechanics at work here, just stretched out over years instead of five-minute intervals.
Eraring, and what an extension actually buys you #
The Eraring deal is the clearest case study going. Origin wanted out by 2025, on the reasonable commercial view that an ageing coal plant losing money in a market being eaten by rooftop solar and new-build renewables wasn’t a business it wanted to keep running. The NSW government, working off AEMO’s reliability advice, judged the replacement capacity — batteries, transmission, new generation — wasn’t yet far enough along to let the state’s largest power station go dark on the original date. So it struck a deal: Origin keeps Eraring open to mid-2027, with a risk-sharing arrangement underwritten by the state.
I’d call that a sensible piece of bridging policy, not a renewables failure and not a coal reprieve worth cheering either. It buys time. It doesn’t buy a different destination. I’ve gone back through Origin’s own investor materials on this a few times and the company has been consistent that the extension is about managed timing, not a change of heart on the underlying exit — which lines up with the wider pattern across the AGL and Origin businesses that I covered in AGL versus Origin: two gentailers, two very different bets. AGL’s own Bayswater and Loy Yang timetables sit in the same bracket — see AGL Energy: coal’s biggest landlord trying to check out early — long-dated, subject to review, moving mostly in one direction.
Where the Capacity Investment Scheme fits #
The federal Capacity Investment Scheme is the main policy lever meant to make sure something firm is standing in coal’s place when it does go, running underwritten tenders for dispatchable capacity and renewables alongside it. It’s had real success getting battery and firming projects to financial close faster than the merchant market alone would have delivered them — Akaysha Energy’s build-out, which I looked at in Akaysha Energy: BlackRock’s big battery bet on the NEM, is a fair example of the scheme doing what it says on the tin.
Whether it’s picking winners in a way that distorts the market for everyone else is a separate and genuinely contested question, one I went through at more length in is the Capacity Investment Scheme quietly picking winners? My own view, for what it’s worth, is that the CIS is doing necessary work but the government is going to have to be honest at some point about how long the training wheels stay on. A scheme built to bridge a gap has a natural expiry; if it becomes the permanent way capacity gets built in this market, that’s a different and bigger conversation than the one currently being had.
Batteries, pumped hydro, and the honest comparison #
The firming conversation tends to collapse into batteries versus pumped hydro, when the honest answer is both, doing different jobs on different timescales. Batteries are winning the short-duration, fast-response end of the market decisively — the economics and the construction timelines both favour them. Pumped hydro, Snowy 2.0 chief among it, is meant to cover the longer, multi-day firming task that batteries currently don’t do economically. I set out the trade-offs properly in pumped hydro vs big batteries: which firms the grid?, and Snowy Hydro’s own construction delays remain the biggest single variable in how confident anyone should be about the 2030s reliability outlook — a point AEMO’s planning documents keep flagging in fairly measured language.
Queensland’s approach, building state-owned pumped hydro alongside public generation retention, is a genuinely different bet to the market-led model running in NSW and Victoria, and it’s too early to call which one ages better. I covered the shape of that plan in Queensland’s energy plan: pumped hydro and public ownership, and it’s worth watching as the control case against the CIS-and-private-capital approach elsewhere.
The bit everyone skips over #
What doesn’t get said enough in this debate is that reliability risk isn’t symmetrical. Keeping an old coal unit running an extra eighteen months if the replacement slips is expensive and awkward but manageable — Eraring is proof of that. Closing it on the original date and finding the replacement isn’t ready is a genuinely bad outcome, the kind that shows up as load-shedding on the six o’clock news. So the incentives on governments and market bodies alike tilt toward caution, toward extension over abrupt exit, and that’s not a bad instinct even if it annoys people on both sides of the argument. The AER’s own reliability and market monitoring work has consistently flagged that orderly exit, not fast exit, is the thing actually protecting consumers on price and supply both — worth reading directly on the AER’s site rather than taking my word for it, and AEMO’s ESOO publications are the primary source for the actual closure-year numbers, updated every year, available on AEMO’s website for anyone who wants to check the working rather than the headline.
What I’d actually watch from here #
Forget the closure-date headlines for a second. The number that matters over the next eighteen months is how much firmed capacity — batteries, pumped hydro, new transmission — actually reaches commercial operation against what the CIS and state schemes have contracted. If that number tracks close to schedule, Eraring’s 2027 date holds and the debate quietens down again for a year or two. If it slips, expect another extension announcement, and expect the same argument to restart from scratch, as it reliably does. I’ll be back on this one before the year’s out, most likely sooner. Perth’s had a mild winter for once, and I’ve had more time than usual to sit outside with the good telescope and not much else to do — small mercies.
— Tom Fitzgerald, Baseload & Fuels Correspondent
Photo by Declan Sun on Unsplash