Changes proposed for power plant closures

CANBERRA, AAP – The Morrison government is seeking to ensure energy companies give more notice before they shut down coal-fired power stations.

Energy Minister Angus Taylor has asked the Australian Energy Market Commission to increase the notice period from 3.5 years to five years.

He says the change is essential to ensuring there is enough time for new projects to be built to replace closing power stations.

“It is critical to ensure there is a pipeline of projects that can be delivered to replace existing capacity, keep the system reliable and secure, and keep power prices down for Australian households, businesses and industry,” he said.

“This is a sensible change and necessary to ensure the national electricity market remains reliable and secure.”

The proposal comes after Origin Energy announced this year it was closing the Eraring power station in the NSW Hunter Valley, the largest coal-fired power plant in the country.

The energy company said the power plant would close by August 2025, seven years early, with Origin providing the required 3.5 years notice to the Australian Energy Market Operator.

Mr Taylor said a longer notification period was needed.

“Without this rule change, there is a risk that retiring capacity is not replaced in time, or is only able to be replaced with inadequate or inefficient options that are available in short time frames,” he said in a statement.

The government other proposed changes include new measures to prevent energy companies mothballing generators indefinitely to avoid being subject to the notification period for closures.

Long-term mothballed plants would be defined as being closed for more than nine months of the year.

“This rule is intended to prevent generators from engaging in behaviour that could create uncertainty in the market and act as a deterrent to new investment,” Mr Taylor said.