The review recommends the government enter into negotiations with Origin on an extension of the coal plant at Lake Macquarie,north of Sydney. The confidential cabinet document says that a deal with Origin should be temporary and coupled with an exit policy.
Industry experts estimate prolonging Eraring’s operations could cost between $200 million and $400 million a year. The move is likely to be welcomed by industry,but any extension would pose a political risk for Labor because it would require the use of taxpayer funds to support a high-polluting coal plant.
While the Heraldhas not seen the report in full,the recommendations say the ongoing use of fossil fuels may be necessary to address energy shortfalls by suggesting there be greater recognition of the role of gas power in firming infrastructure.
The government is yet to sign off on a final version of the report or adopt its recommendations. However,a senior Labor source unauthorised to speak publicly said the call to extend Eraring’s operations in some capacity beyond 2025 would not change.
The Minns government paid consultancy group Marsden Jacob Associates $217,000 to conduct the energy check-up,which was headed by Cameron O’Reilly,a Keating-era Labor staffer and a former senior energy bureaucrat in NSW.
O’Reilly was also the chief executive of the now-defunct Energy Retailers Association between 2006 and 2015. The group — which became the Australian Energy Council in 2016 — was the peak industry body for retailers in Australia. Its members included Origin.