Origin Energy will build a big battery on the site of Australia's largest power plant, Eraring, as it prepares to exit coal-fired power.
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The energy company announced on Thursday the final investment decision to commit $600 million for the first stage of the large-scale battery project, with work to begin within weeks.
Origin said it will continue to assess the market, which will help inform the timing for closure of all four units at Eraring, near Lake Macquarie.
The NSW government has not ruled out intervening to keep Eraring open beyond its scheduled closure date of 2025, because it supplies about a quarter of the state's energy needs.
NSW Premier Chris Minns said the government has to look at commercial decisions made by energy companies in NSW.
Also closing is AGL Energy's Liddell coal-fired power station in the Upper Hunter, which provided 10 per cent of the state's power until this month and will be replaced by renewable energy and big batteries.
"It's important that electricity consumers in this state have a steady reliable source of power and there's big challenges there in terms of the renewable energy revolution," Mr Minns told reporters.
"We believe that if we get the pathway right, we can put downward pressure on bills and make sure that energy is reliable."
Origin head of energy supply and operations Greg Jarvis said Eraring is a strategic site that can deliver energy into major demand centres.
"Development of the Eraring battery is a key next step as we look to transform the Eraring site for the future, given our intention to exit coal-fired generation by as early as August 2025," he said.
Mr Jarvis said Origin will also "actively engage" with the market operator, the NSW government, and the local community on plans for Eraring's closure.
Stage one involves construction of a 460 megawatt battery storage system anticipated to come online in the final three months of 2025.
Origin has the option to increase the battery to 700MW and double dispatch duration to four hours, under approvals already in place.
Battery equipment will be supplied by Finnish technology group Wartsila, while design and construction services will be provided by Enerven, a subsidiary of SA Power Networks.
Australian Associated Press
