Want to dismantle coal power? Green the grid
The air is hot, gritty and tastes metallic inside Australia’s largest coal-fired electricity plant, the ageing Eraring Power Station that is into its fourth decade of operations.
At the site’s cavernous turbine hall, as much as 6 million tonnes of coal a year is crushed and loaded into furnaces that reach temperatures of 1,480C — enough to melt steel — to heat 24-storey water-filled boilers. The process creates enough steam to spin giant turbines that generate almost 2.9 gigawatts of electricity annually, a quarter of the power demand in Australia’s most populous state.
For now, there’s the same thunderous roar from the process that has continued since Eraring became operational in 1984. But, as soon as August 2025, the plant north of Sydney is scheduled to fall silent.
The plant’s owner, utility Origin Energy Ltd, in February brought forward its planned retirement by seven years. CEO Frank Calabria cited the shrinking viability of coal-fired electricity as a reason, as it faces competition from lower-cost energy sources such as solar, wind and batteries.
But closing Eraring is “not quite as simple as just turning a switch off ”, said Tony Phillips, group manager of coal asset operations. First, the burners will be extinguished and then the boilers brought to a halt, taking three to four days to cool down. After that, there’s an arduous process of dismantling, repurposing and rehabilitating the land where the plant sits.
With a sprawling area that includes neat rows of electricity transmission lines, Eraring has vast potential to become a location for green energy instead.
Origin plans to begin installation of a 700-megawatt storage battery before the coal plant shuts down, and complete the project by 2026 to integrate it with renewable-energy developments across New South Wales. The site itself could host further new infrastructure over time.
The switch won’t be cheap. Origin estimates restoration and rehabilitation will cost A$240 million (US$170 million), and it will spend A$5 million over 10 years on community support. Major efforts are under way to find workers new jobs, or to retrain staff, according to Phillips.
Australia’s previous government had expressed concern that dismantling Eraring years ahead of schedule could make the electricity grid less reliable and raise power prices. But those fears are probably misplaced, according to the Australian Energy Market Operator (AMEO), which manages national electricity and gas systems.
Plans to add new transmission and renewables in New South Wales, including proposals for 1.7 GW of largescale wind and solar, mean the region’s electricity network is likely to “meet or exceed the reliability standard”, even without the coal plant, according to Merryn York, executive general manager of system design at AMEO.
Australia has been able to accelerate its move away from coal because renewables are growing so quickly, thanks to abundant sunshine and wind and relatively low costs of installations. The country is a world leader in residential solar, with almost a third of homes fitted with panels.
That rise of clean power has sent wholesale electricity prices tumbling and resulted in daytime power demand — when rooftops are bathed in sunshine — hitting record lows, eroding profits for more expensive coal-based power generation.
“The amount of daytime demand is becoming so small that coal plants are left in a battle among each other to remain online,” said Johanna Bowyer, a lead research analyst at the Institute for Energy Economics and Financial Analysis.
Ageing coal plants are also struggling with reliability, with outages in some months reducing their capacity to produce power by as much as a third.
That makes Australia a global test case for the transition of power grids that remain dominated by coal, including in the US, South Africa and some European nations aiming to end reliance on Russian fuel.
South Australia in particular, where renewables accounted for 100% of demand on 180 days last year, is being looked to for lessons on how best to remodel post-coal energy systems.
Australians added a record 3.2 GW of household solar last year. That’s “more than the output of Eraring and it’s cheaper than what we can produce energy for”, said Phillips. “Really, that makes coal-fired power stations into the future uneconomical.”
EnergyAustralia, a unit of Hong Kong-based CLP Holdings, has reached a similar conclusion. It aims to close its Yallourn power station in 2028, four years ahead of previous plans. It will also close down its Mt Piper plant early, in 2040.
At AGL Energy Ltd, the utility responsible for the largest share of direct greenhouse gas emissions in Australia, technology billionaire Mike Cannon-Brookes has become the largest shareholder and is pressing to shutter coal plants and add more renewables.
AGL estimates it would cost A$1.4 billion to replace its Liddell coal plant in the Hunter Valley mining region of New South Wales, which will close by next April. It will add new assets in the area including a 500-megawatt battery, renewables and gas “peaker plants”, which function only when power demand is high. Also planned are pumped-hydro storage and a synchronous condenser.
A new Australian government, along with an expanded slate of climate-focused independent and Greens legislators, should add further support to the nation’s energy transition.
The fact that one of the world’s largest coal exporters and the source of some of the highest per-capita emissions from the fuel is abandoning it faster than expected shows that the transition is possible, said Richie Merzian, director of the climate and energy programme at the Australia Institute, which presses for more additional emissions reduction.
“To see Australia plan for the future past coal is a demonstration of transition from one of the last holdouts,” he said.
“The amount of daytime (power) demand is becoming so small that coal plants are left in a battle among each other to remain online”
JOHANNA BOWYER Institute for Energy Economics and Financial Analysis