The NSW government is poised to announce it will pay to keep Eraring Power Station open beyond next year as it tries to shore up electricity supply while renewable energy comes online.
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The Newcastle Herald understands the government's expenditure review committee will meet on Friday to discuss how much the state will pay Origin Energy to keep the Lake Macquarie power plant open.
The Guardian reported on Tuesday that the government was poised to announce the 2880-megawatt plant would remain open for up to four years via taxpayer subsidies in the first two years and permit extensions until 2029.
The Herald approached NSW Energy Minister Penny Sharpe and Origin for comment.
One source said local state MPs could be briefed on the issue next week.
Hunter federal Labor MP Dan Repacholi said he had not been briefed on developments but "look forward to hearing what the state government has been able to negotiate with Origin about the future of Eraring".
"We have said time and time again that Eraring should close not a day earlier or a day later than it is needed," he said.
"In the meantime, we have been getting on with making sure that we have a reliable and affordable energy sector."
The mooted life extension for Eraring beyond its scheduled 2025 closure drew protests from community and industry groups advocating for renewable energy.
Sydney-based non-profit Solar Citizens said the government appearted poised to "push the cost of keeping Eraring open onto people's electricity bills during a cost-of-living crisis".
"Solar Citizens believes the NSW government will make the wrong choice in propping up and extending dirty coal power when renewables are the cheapest and cleaner source of new energy for the state and country," acting chief executive Joel Pringle said.
"Action on climate change and greater support for rooftop solar and home batteries are effective ways of lowering energy bills to deliver cost-of-living relief."
The government announced in September that it would enter negotiations with Origin about keeping Eraring open, one of the key recommendations in a report by energy policy specialist Dr Cameron O'Reilly.
Independent think tank Climate Energy Finance published a report in March which estimated keeping Eraring open beyond 2025 would cost taxpayers between $120 million and $150 million a year.
The report argued there was enough clean energy capacity in the pipeline to offset the withdrawn capacity with no electricity supply gap.
Origin rejected the report as inaccurate and said at the time that it remained in "active negotiations with the NSW government about Eraring's future, and both parties look forward to bringing the process to a conclusion as soon as possible".
The Herald reported in September that a coalition of 10 health groups had called on the government to ensure Eraring closed in 2025 as planned.
The Smart Energy Council, a renewable energy industry body, said on Tuesday that it was "shocking" that the Minns government was contemplating keeping open the nation's largest remaining coal-fired power station, built in 1977.
"It will be a disaster for the climate and the state's economy," acting chief executive Wayne Smith said.
"Eraring was privatised only 10 years ago, and now taxpayers are being asked to pay hundreds of millions of dollars to the private owner to keep it open.
"There is no way Australia can meet its renewable and climate targets if we keep propping up coal-fired power stations, particularly the nation's biggest."
The Institute of Public Affairs conservative think tank said last year that closing Eraring in 2025 would be "catastrophic for consumers and destabilise our entire electricity grid".
Hunter Business said last year that the private sector had "immense trepidation" about the loss of Eraring given the slow roll-out of renewables.