Eraring Power Station Uncertainty Sparks Surge in Long-Term Energy Contracts

In the delicate balance between supply and demand within the energy market, few events resonate as powerfully as the closure of a large power station. Cast your mind back to April 2023, when the industry watched the Liddell Power Station exit the market. Assurances were made, calculations were crunched, and yet, what followed was a surge in electricity prices from $103/MWh in the weeks prior to the closure to $144/MWh in the weeks following the closure. Prices spiked by almost 40% over three months - a tangible reminder of the differences between intermittent and baseload generation.

As we fast-forward to August 2025, a sense of déjà vu looms large on the NSW energy landscape, with the impending closure of the Eraring Power Station. The spectre of uncertainty casts its shadow once more. One of the reasons for Eraring’s ongoing requirement is an 80% slump in renewable electricity investment during 2023 along with the massive investment in transmission lines required to transition to renewables.

Navigating Uncertainty

Our analysis shows customers are removing the uncertainty associated with Eraring (and the memory of Lidell’s closure) by entering longer-dated, fixed-price supply agreements. The chart below shows current market price levels are within 10% of recent lows and represent an opportunity to forward contract at fixed rates to remove the uncertainty associated with the timeline for Eraring’s closure and the potential for prices to increase.

Liddell's Legacy: Impact on 2025 Electricity Contract Pricing

 

Elevating Electricity Procurement: Flexible Options from SmartestEnergy

SmartestEnergy continues to offer its customers unparalleled choice in electricity contracting with terms of up to 10 years, including renewable-backed supply agreements and sleeved PPAs. We also offer hybrid contracting consisting of part renewable supply and traditional fixed rate contracting options. Our progressive purchasing product is unique in the Australian market because it offers the option to lock in a fixed rate, combined with the potential to outperform the contracted price through purchasing up to 50% of contracted volumes, as prices change in the future. If future market prices don’t present an opportunity to outperform the contracted price, your organisation has the peace of mind that the contracted load is secured at a fixed price.

So, as you embark on your next electricity procurement journey, remember to include SmartestEnergy—your trusted partner in navigating the transition towards a brighter, more sustainable energy future.

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