Australia's biggest coal-fired power plant to shut in 2025
- Origin joins rivals in speeding up coal plant closures
- Origin says ample replacement capacity in the works
- Origin, NSW state each plan to build 700 MW batteries
MELBOURNE, Feb 17 (Reuters) - Origin Energy (ORG.AX) said on Thursday it plans to shut the Australia's biggest coal-fired power plant in 2025, seven years earlier than scheduled, as an influx of wind and solar power has made the plant uneconomic to run.
Origin's announcement to quit coal-fired power follows moves by its rivals to accelerate the closure of their coal-fired plants, all struggling with sliding power prices which have hurt plants that don't have the flexibility to switch off when there is surplus energy. read more
"The reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower cost generation, including solar, wind and batteries," Origin Energy Chief Executive Frank Calabria said in a statement.
The company plans to install a big battery of up to 700 megawatts (MW) at the Eraring power station site, about 120 km (75 miles) north of Sydney, which it aims to have mostly built before the 2,880 MW plant shuts.
At the same time, the state government of New South Wales said on Thursday it would work with network operators to build a separate 700 MW battery to help free up capacity on the state's transmission system.
"What we're focused on is ensuring that we have enough firm rated capacity in the system to be able to keep the lights on and put downward pressure electricity prices," state treasurer Matthew Kean told reporters.
Calabria said Origin was confident that announced plans for new gas-fired power plants, pumped hydro and batteries "will be more than enough to compensate for the exit of Eraring."
Neither Origin nor Kean gave cost estimates for their batteries.
Origin on Thursday reported an 18% rise in underlying profit to A$268 million ($193 million) for the half-year to December, boosted by record-high revenue from its stake in the Australia Pacific LNG plant.
Strong LNG prices led it to raise its outlook for full year earnings before interest, tax, depreciation and amortisation by A$100 million to between A$1.95 billion and A$2.25 billion.
($1 = 1.3902 Australian dollars)
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