Origin Energy Proposes Australia's Largest Battery System at Former Coal Site
Sydney, Tuesday, 6 October 2026.
Origin Energy has proposed expanding its Eraring battery facility in New South Wales to 1,200 megawatts and 8,600 megawatt-hours, turning the retiring coal site into Australia’s largest energy storage system.
Expansion Specifications and Capacity Details
The proposed expansion, designated as “Eraring North,” seeks to add 500 megawatts and 4,942 megawatt-hours of capacity to the existing infrastructure [1][3]. When combined with the operational Eraring Battery 1 and the under-construction Battery 2, the total site capacity will reach approximately 1,200 megawatts and 8,600 megawatt-hours [2][3]. This aggregate capacity allows for a theoretical discharge duration of 7.167 hours at maximum output, positioning it as a critical long-duration storage asset for the national grid [3][4]. The project utilizes 22 hectares of land, incorporating 11 hectares of existing battery land plus 11 additional hectares for the new expansion [1][5].
Construction Timelines and Coal Closure Schedule
Origin Energy aims to commence construction on the Eraring North addition in 2028, with a projected construction duration of 2.5 years [1][3]. Full commercial operations are expected to begin between early and mid-2031, pending regulatory approval [3][5]. This timeline contrasts with the scheduled closure of the existing 2,880 megawatt Eraring coal-fired power station, which is set for April 2029 [1][2]. The coal station’s closure date was previously delayed from an original late 2025 target due to concerns regarding grid service requirements and a lack of new wind and solar capacity [1][5].
Strategic Transition and Grid Stability
This development represents a significant shift as the electricity sector transitions from coal-fired generation toward variable renewable energy [1][5]. The Eraring coal facility closure is described by Origin as the largest single generation exit in Australian electricity history [1][2]. The existing coal station has a capacity of 2,880 megawatts, meaning the new battery complex will replace 0.417 of the coal plant’s raw capacity with storage designed to stabilize intermittent renewable inputs [2][3]. This follows the precedent set by the closure of the Liddell coal generator in 2023, which was subsequently replaced by battery storage facilities [1][5].
Grid Connection and Infrastructure Requirements
The Eraring North project involves electrically separating the new batteries from existing infrastructure to ensure independent operation [3][5]. It features an independent 300 kilovolt grid connection to a Transgrid substation, leveraging existing transmission corridors to minimize the need for new transmission infrastructure [1][3]. The project requires State Significant Development qualification under New South Wales planning policies and compliance with the Environmental Planning and Assessment Act [3][5]. Additionally, the project includes an EPBC referral and a scoping report lodged with the New South Wales government [1][5].
Regulatory Pathways and Investment Landscape
Origin Energy’s EPBC referral cites structural shifts in the National Electricity Market as the primary driver for the expansion [1][5]. The company targets 8–11% post-tax returns on its funded battery investments, with the proposed storage expansion estimated to cost above A$2 billion [4][5]. Regulatory history for the site includes a federal decision on the existing BESS in July 2021, classifying it as a not controlled action if undertaken in a particular manner [3][5]. The New South Wales government roadmap mandates a minimum of 12 gigawatts of renewable generation and 2 gigawatts of long-duration storage by 2030 [3][5].
Economic Context and Gas Turbine Costs
In September 2026, Origin Energy revived plans for a new large-scale gas-fired power station in New South Wales’ southern tablelands, despite rising costs [1][5]. The 2026 CSIRO GenCost report indicates that gas turbine costs have risen for four consecutive years and are projected to continue increasing over the next two years [1][5]. This increase is attributed to demand from data centers impacting gas turbine costs, influencing the economic viability of gas peakers compared to storage solutions [1][5]. Origin notes that further retirements at Vales Point, Bayswater, and Mount Piper power stations are expected following Eraring [1][2].
Challenges in Renewable Integration
Critics argue that big batteries solve the feeling of the problem, not the problem itself, without reliable renewable generation behind them [4]. Comments suggest that opportunities are available for sites like Bayswater 2 to use existing transmission lines, though Origin focuses on battery storage [4]. There is concern that bigger batteries do not automatically mean cheaper power for households without verified replacement prices and full cost transparency [4]. The argument omits the use of Shoalhaven which enhances Eraring Energy’s portfolio, according to some industry observers [4].
Portfolio Adjustments and Project Status
Origin Energy recently canceled the Skye Ridge wind project near Walcha, New South Wales, due to rising costs [1][5]. The company is currently seeking equity buyers for the 1.45 gigawatt Yanco Delta wind project in southwest New South Wales [1][5]. These adjustments highlight the complexities in aligning generation capacity with the expanded storage capabilities at Eraring [1][5]. The Australian Energy Market Operator’s 2024 Integrated System Plan requires a tripling of grid-scale variable renewable capacity by 2030 to support the transition [3][5].