By Luke Costin

A two-year extension to the life of Australia’s largest coal-fired power station has been lampooned by critics concerned about the speed of the renewable energy transition.

Origin Energy on Tuesday said extending Eraring’s operation to 2029 would reduce risks to system security highlighted by the Australian Energy Market Operator in a recent report.

The decision provided more time for renewables, storage and transmission projects to be delivered, Origin chief executive Frank Calabria said in a statement to the ASX.

It also reflected uncertainty about the reliability of Australia’s ageing coal and gas fleet.

But the state coalition and Greens – usual foes – attributed Origin’s decision to a stalling of the energy transition, taking aim at the state Labor government.

“We have seen project after project delayed, while regional communities are being ignored and steamrolled by a government that doesn’t listen,” coalition environment spokesman James Griffin said.

Fossil fuels made up 57 per cent of power consumed in NSW in 2025, lower than Queensland (70 per cent) and Victoria (60 per cent) but well above the renewable-led states of South Australia and Tasmania (each below 25 per cent).

Labor had lacked ambition and urgency to transition away from fossil fuels and had been focused on building power-hungry data centres, Greens MP Abigail Boyd said.

“Keeping any coal power station open longer is a cost-of-living and human health disaster. Not to mention the devastating climate impacts it will cause,” she said.

But the government’s key focus was keeping the lights on and putting downward pressure on power prices, Energy Minister Penny Sharpe said.

“Since the election, we have increased the amount of renewable energy capacity in operation by almost 70 per cent,” she said.

“That’s equivalent to Eraring’s capacity.”

The 2880-megawatt plant – Australia’s largest by power output – was initially slated to close in 2025.

But that was pushed out to August 2027 after the NSW Labor government struck a $450 million risk-sharing deal for the ageing coal-fired facility out of grid reliability concerns.

Under the deal, NSW would cover a percentage of losses up to $225 million per year if given advance notice by Origin.

Origin has until March to activate the second year of the deal, having not activated it for 2025/26.

The deal won’t be extended beyond 2027, Labor says.

Extending the life of Eraring reflected uncertainty about the reliability of Australia’s ageing coal and gas fleet, Origin said.

“We’ve taken the decision to extend Eraring’s operations after assessing a range of factors including the needs of our customers, market conditions and the important role the plant plays in the NSW energy system,” Mr Calabria said.

It is not expected to impact Origin’s 2030 emissions reduction targets, the company said.

Origin, which has more than 4.2 million electricity, gas and LPG customers, paid $75 million to take over the power station between Sydney and Newcastle when it was privatised in 2013.

The site is being converted to host a 700MW battery, which is expected to provide an average of 4.5 hours of storage capacity by mid-2027.