November 20, 2014

Major energy generator and retailer, EnergyAustralia, has announced today it will permanently close and decommission the 38 year-old coal-fired Wallerawang power station, near Lithgow in NSW.

Wallerawang power station has not been operational for the past eight months.

Earlier this year, EnergyAustralia removed one of Wallerawang’s 500MW units from service and placed its remaining unit on standby, in response to subdued customer demand for electricity and a lack of access to competitively-priced coal.

This remaining unit, Wallerawang Unit 8, will now also be removed from service and the power station closed.

EnergyAustralia’s Group Executive Manager, Operations and Construction, Mr Michael Hutchinson, said while today’s decision had largely been expected, it was still a difficult announcement to make.

“To employees and the local community, Wallerawang power station is not just a feature of the industrial landscape, it’s a part of local history,” he said.

Employees will continue to operate the newer, more efficient 1400MW Mt Piper power station nearby, as well as assisting with the task of decommissioning Wallerawang’s plant for recycling and sale.

"Employment guarantees for employees on site remain and we will continue to focus on ensuring both sites are maintained safely." Mr Hutchinson said.

EnergyAustralia acquired both the Wallerawang and Mt Piper power stations from the NSW government in September 2013 for $475 million.

At the time of purchase, EnergyAustralia announced a review of both Mt Piper and Wallerawang, with the intention of generating savings by operating both stations more in line with customer demand and overall market performance.

“Weak wholesale prices as a result of oversupply in the National Electricity Market mean we are unable to sustain the high costs of operating and maintaining the Wallerawang power station,” Mr Hutchinson said.

Operating arrangements at Mt Piper power station will continue, although longer-term coal supplies are still not guaranteed as they remain subject to planning approval. This follows the NSW Planning Assessment Commission's decision last month to not approve reopening of a local coal mine contracted to supply Mt Piper with fuel.

"Mt Piper remains an important part of the NSW energy supply system and we are currently working to secure other commercially viable sources of coal to underpin its longer-term operations," Mr Hutchinson said.
Decommissioning of the Wallerawang site will commence once detailed plans are approved by the NSW government and is likely to take several years.
EnergyAustralia is a major retailer and generator, providing gas and electricity to over 1.3 million customers in NSW.