Eraring Power Station (Eraring) is NSW’s largest power station at 2880MW. It provides around 18 per cent of the state’s current electricity needs.
On 17 February 2022, the owner of Eraring – Origin Energy Limited (Origin) – gave notice it would close Eraring as early as August 2025. This is seven years earlier than previously expected.
In August 2023, the Australian Energy Market Operator released its annual Electricity Statement of Opportunities report, which found that a reliability gap would emerge in NSW from 2025/26 if Eraring closes in August 2025.
In September 2023, the NSW Government announced it would engage with Origin Energy on its plans for Eraring consistent with recommendations made in the NSW Electricity Supply and Reliability Check Up.
In November and December 2023, the NSW Government announced NSW Electricity Infrastructure Roadmap tenders had resulted in support for around 2,350MW of new renewable generation, storage and firming infrastructure.
In December 2023, the Energy Security Target Monitor (ESTM) Report was released highlighting that additional actions may be necessary to ensure a reliable electricity supply following the scheduled retirement of Eraring power station in August 2025.
In May 2024, the Australian Energy Market Operator released an update to its 2023 Electricity Statement of Opportunities finding that despite the additional investment, there was a forecast reliability gap in NSW from 2025/26 if Eraring was to close in August 2025.
On 23 May 2024, the NSW Government announced Origin had agreed to operate Eraring until August 2027 in return for Government underwriting against a share of its potential financial loss. If Origin accepts the underwrite, it is also required to pay a share of any profit to the Government. A summary of the agreement is available here.
On 4 June 2024, the Minister tabled the agreement with Origin in Parliament.
On 6 August 2024, the Minister tabled a summary of the evaluation of the agreement with Origin and related commercial advice and electricity modelling in Parliament.
On 20 January 2026, Origin advised the Australian Energy Market Operator that it will operate Eraring until April 2029. Under the terms of the agreement, Origin must cease operation of all units and deregister the power station by no later than 30 April 2029.
Origin has chosen not to opt-in to the underwriting arrangement under the agreement in both 2025-26 and 2026-27. The NSW Government has not made any payments to Origin under the agreement.
Read the Minister’s media statement for more details.
The NSW Government has taken a number of steps to support network reliability including:
- awarding 10.71 gigawatts of access rights across the Central-West Orana and South West Renewable Energy Zones
- Contracting enough projects to meet the 2030 and 2034 minimum objectives for long duration storage
- providing $8.4 million in grants to Transgrid and AEMO to hire more engineers to enable faster connection of storage projects to the grid
- Offering Peak Demand Reduction Scheme incentives to homes and small businesses to connect their solar batteries to a Virtual Power Plant (VPP). A Virtual Power Plant lets consumers to sell excess electricity back to the grid on an ongoing basis
- Establishing the Energy Security Corporation to make investments in storage projects, address gaps in the current market, and improve the reliability of our electricity network.
To learn more about NSW’s transition to renewable energy, visit Electricity Transition.