Origin Energy said on Tuesday it will extend the operation of all four units of its coal-fired Eraring Power Station to April 2029, to support energy supply in New South Wales state.

The 2 880 MW Eraring power plant had been scheduled to shut down in August 2027. However, a December report by the Australian Energy Market Operator (AEMO) said Sydney could face blackouts in the second half of this decade if the plant retires as planned.

Australia is targeting 82% of its electricity needs to be fulfilled via renewable energy by 2030.

"Our decision to keep Eraring operating until April 2029 provides more time for renewables, storage and transmission projects to be delivered, and reflects uncertainty regarding the reliability of Australia’s aging coal and gas fleet," Origin CEO Frank Calabria said in a statement.

The power producer said it does not intend to invest in any major maintenance overhauls ahead of the plant's retirement in 2029.

Origin said the battery development project at the Eraring plant started commenced commercial operation in late 2025, with the final stages expected to come online in the first quarter of 2027.

The plant supplies around 25% of the state’s power and its government made an initial agreement with Origin in 2024 to underwrite Eraring until the initial closure date of August 2027, although the company has not opted to use government funds as yet.

“My number one job is keeping the lights on and putting downward pressure on power prices,” NSW Energy Minister Penny Sharpe said in a statement.

“Since the election, we have increased the amount of renewable energy capacity in operation by almost 70%. That’s equivalent to Eraring’s capacity,” Sharpe said, referring to the New South Wales state election in 2023.

Last week a separate coal plant in Queensland suffered an outage which Clean Energy Council CEO Jackie Trad said underlined the urgency of getting more renewables into the grid to replace Australia’s ageing coal fleet, which has an average age of 38 years.

“Every renewable energy, storage and transmission project that reaches delivery reduces our reliance on ageing coal and moves the system closer to being cleaner, more affordable and more reliable,” she said.