Origin favours renewables, but what about its workers?

February 23, 2022
Eraring power station will close a little earlier than planned due to the drop in coal prices.

Origin Energy’s decision on February 17 to close Eraring power station in 2025, 3.5 years earlier than planned, has generated fury from the federal energy minister Angus Taylor who told ABC Radio National he had not been warned.

But four years ago, CEO Frank Calabria said Origin would halve emissions by 2032 in line with the Paris Agreement and that Eraring, its only coal-fired station, would drive such a reduction.

Eraring, located on the western shore of Lake Macquarie, is New South Wales largest coal-fired power plant. It supplies nearly one quarter of NSW’s total power and emits about 15 million tonnes of carbon dioxide a year. 

Closing the power station, which takes coal from five mines in region, will lead to a significant reduction in greenhouse gas emissions with consequent health benefits to surrounding communities. Coal-fired power stations account for about one third of Australia’s emissions.

Calabria argued the decision reflected the company’s rapid transition to cleaner sources of energy, even through Origin invests heavily in liquid natural gas in Queensland.

Origin’s decision did not take Energy NSW by surprise: the NSW government has 87 renewable energy projects, worth more than $100 billion, registered for the Hunter Valley region. These may produce up to 104 gigawatts (GW) of energy a year. By contrast, Eraring produces 2.9 GW.

Over the next few years, more coal-fired power stations will be closing. Bayswater Power Station in Muswellbrook, once owned by the NSW government and sold to AGL in 2015, produces 2.7 GW and is closing in 2033 (ahead of its 2035 use-by date). The efficiency of renewable energy could force it to close earlier.

But without a federal publicly-funded plan, this change in Australia’s energy landscape increases the risk that the transition to clean energy will be chaotic, and workers and communities will be sidelined, forced to bear the brunt.

A national community summit on coal power transition at Lake Macquarie in February 2020 discussed how any successful energy transition relied on bringing local residents, councils, industry, education providers and governments together to plan for retraining, jobs, land remediation and the management of coal ash.

An Origin spokesperson, who did not want to be identified, told Green Left that the company would be working on a transition plan with employees and the community.

Meanwhile calls, including from the Clean Energy Council to the Australian Industry Group, for a national plan for the transition to renewable energy are increasing.

The final federal government report on the Retirement of Coal Fired Power Stations, released in 2017, recommended that all 24 coal-fired power stations should be shut down in an orderly fashion. Coalition Senators, however, objected “to the ideologically driven conclusions which are counter to the government’s technology agnostic policy approach”.

The federal government is out of step with public opinion and market realities. Tomago Aluminium, for example, which is Australia’s biggest power consumer, is planning for a mainly renewable energy supply by 2029. The global market for coal is likely to shrink, with South Korea, China and Japan planning to achieve net-zero greenhouse gas emissions by 2050.

In the absence of a federal energy policy, states are taking initiatives. The NSW government is planning five Renewable Energy Zones — in the central-west Orana, New England, south-west, Hunter-Central Coast and Illawarra regions — with accompanying transmission infrastructure.

It is estimated that renewable energy will create thousands of jobs over the next decade. A University of Technology study, titled “Renewable Energy Employment in Australia,” found that more people are employed in that sector than in domestic coal. It also found that by 2035, around 75% of renewable energy job opportunities could be in regional and rural Australia.

Beyond Zero Emissions has applauded the NSW government’s decision to invest $550 million in renewable energy, clean manufacturing and transmission infrastructure in the Hunter Valley, describing it as a “billion-dollar opportunity for the state”.

NSW treasurer Matt Kean said the government will support “up to 3700 jobs” following the closure of Eraring coal power station. But BZE’s research shows that with greater investment, a Hunter Renewable Energy Industrial Precinct could support 34,000 jobs and generate $11 billion in annual revenue by 2032.

Eraring’s closure adds impetus to the call by the Hunter Jobs Alliance, a community campaign involving unions and environmentalists, for the government to lead a plan for sustainable jobs and for programs to help workers transition into new, well-paid jobs.

[Niko Leka is running for the Socialist Alliance in the NSW Senate.]

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