Why Does Origin Energy (ASX:ORG) Still Lean on Eraring? - Kalkine Media

Origin Energy continues to operate the Eraring coal plant beyond its original 2025 closure date because the company faces pressure to maintain reliable baseload supply as the grid transitions away from coal. The article suggests Origin has extended the plant's life in response to uncertainty about whether renewables and battery storage can fully replace the dispatchable power Eraring currently provides.

Where this fits

This is a live test of the firm-power thesis. Eraring is a 2.88 GW coal generator that runs around the clock. Replacing it requires not just megawatts of solar and wind capacity, but the ability to serve demand reliably when the sun is down and the wind is calm. Origin's retention of the plant signals that the company's own modelling shows a gap between renewable capacity and the firm supply the grid needs. This is a cost problem: keeping old coal online is expensive, but the alternative, building enough batteries and overbuilding transmission to replace firm power with weather-dependent supply, has proven even more costly to commit to.

What it means

Australia's transition timeline assumes coal exits by the mid-2020s, but incumbent generators are extending operations because the system lacks sufficient firm capacity to replace it. Each year of delay adds to stranded-asset risk and locks in higher costs. The honest position is that nuclear is banned by law, gas is being built to firm renewables, and coal is being kept warm as insurance. That is the cost of a renewables-only path: paying for the old plant, the new gas plant, and the renewable overbuild all at once.