But a new report from Climate Energy Finance,a pro-renewables think tank,estimates the state’s taxpayers could be forced to pay between $120 million and $150 million a year if the plant is kept running at its full operational capacity.
The analysis is partly based on details of Origin’s negotiations with the former government over a potential purchase of Eraring in mid-2021,released through freedom of information laws. It projects the potential cost of underwriting the plant’s operation by examining coal spot prices,the potential impact on wholesale energy prices and the likely capital expenditure needed to keep the plant open.
Tim Buckley,the director of CEF,an independent public interest think tank,said his projection was a “charitable” one,based on an assumption Origin would not seek to “gouge” taxpayers by aiming to make an “exorbitant” profit from any deal with the government.
“Origin is not a charity,though. It has to cover its costs and even if it only keeps two units open and all four online as reserve capacity,they’re going to want the government to absorb the risk,” he said.
The former Coalition government had the option to buyEraring from Origin in mid-2021 but walked away from a potential deal over concerns about the terms of a deal involving the underwriting of the coal-fired power station.
But last year the Minns government said it would re-open negotiations with the energy company on the back of an energy supply check-up which found closing the plant on schedule in 2025 would be “impossible without reliability and affordability impacts”.