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One of the biggest power plants in New South Wales will shut earlier than planned as EnergyAustralia pledges to move away from coal by 2040.

Key points:

  • A coal-fired Lithgow power station likely to be the last operating NSW will shut at least two years earlier than planned
  • EnergyAustralia’s announcement comes a day after China declared it would no longer invest in overseas coal assets
  • The closure is likely to have a significant impact on Lithgow, which is a traditional mining town

The company will close the Mount Piper Power Station, near Lithgow, by 2040.

The station, which was due to shut in 2042, provides energy to almost 1.2 million homes in NSW and is fuelled by black coal sourced from local mines.

Mount Piper is the state’s newest power station.

EnergyAustralia managing director Mark Collette said the move to renewables would have “significant impacts for our power station workers and our local communities”.

Coal mining is historically one of the most important industries to the Lithgow economy and employs about seven per cent of the town’s population.

“While Mt Piper’s ultimate retirement date will be determined by several factors, we are committed to long-term planning and supporting the transition for our workers and our local communities,” Mr Collette said.

A shot of an active coal-fired power station near a residential area in China.
China consumed twice as much energy as the European Union in 2018.(ABC News: Brant Cumming

Green wave

The announcement comes a day after the Chinese government pledged to stop funding coal projects abroad.

The world’s largest greenhouse gas emitter has vowed to become carbon neutral by 2060.

Green Energy Markets and Institute for Energy Economics and Financial Analysis predicted Mount Piper will be the last coal-fired power station running in the state.

The organisations expected the station would be running at a loss as early as 2025.

This week, according to the OpenNEM, Australia’s reliance on wind, solar and hydro power reached an all-time high of 60.1 per cent.

Historic change

The region’s biggest coal supplier, Centennial Coal, which owns and operates two mines that supply the power station, told the ABC the pledge will have no impact on its existing operations.

Springvale Coal Mine, which directly supplies the local station and has a workforce of nearly 400 people, is set to shut in 2024.

It has withdrawn plans to reopen and expand the Angus Place colliery near Lithgow, which came up against major opposition over its impact on the surrounding environment, including endangered swamps.

It comes after Centennial Coal’s Thai-based parent company Banpu announced in July it would no longer invest in new coal assets, but did not rule out modifying existing licences.

The company has now submitted a new proposal to the state’s planning department for the expansion of an underground mine.

That mine, known as Angus Place West (separate from the Angus Place colliery) would supply the Mount Piper Power Station for the remainder of its lifetime — a window that appears to be rapidly closing.