NSW is keeping Ella coal-fired power station open to prevent electricity price shock – Watt?

Article by Eric Worrell

First published by JoNova; But the financial model that proves coal is cheaper is a state secret.

NSW confirms shutdown delays over fears of pre-election price shock disappear

Giles Parkinson
August 6, 2024

The New South Wales Labor government has confirmed its controversial decision to delay the closure of its largest coal-fired generator at Ellinging was largely due to concerns over potential rises in wholesale power prices.

The 2.88 gigawatt (GW) Eraring facility on the Central Coast was due to close in August 2025, but Origin Energy will now keep at least two facilities open until 2027 under an offtake deal with the state government worth up to $450 million. The next state election is in August, a few months later.

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But the failure of Eraring's owner, Origin Energy, to build any new capacity in NSW before it shuts down in 2025, and delays caused by planning, connection and commissioning of other projects, have forced the state government to take action.

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Endgame's full report remains a trade secret, so obviously the full model and hypotheses being worked on won't be released. This is unfortunate because it is clear that the model has been deceived by reality.

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This means that, based on the actual negotiated agreement, wholesale price gains are likely to be less than $3 billion, and it is unclear whether these gains will actually occur.

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Find out more: https://reneweconomy.com.au/nsw-confirms-eraring-closure-delay-driven-by-fear-of-pre-election-price-shocks/

If one coal plant can save $1 billion per year in 3 years ($3 billion by 2027), imagine how much money two coal plants can save.

The models also suggest that keeping coal plants open would have more than $1 billion in negative benefits, presumably because of harmful carbon dioxide emissions. But given all the recent news about global greening, I think we can safely conclude that the model-based claim that CO2 has a net negative impact on human well-being is not supported by observations.