Major Australian Coal-Fired Station Gladstone Set to Close Six Years Early

(Bloomberg) -- One of Australia’s biggest coal-fired power plants plans to close six years earlier than previously announced.

The Gladstone Power Station will potentially retire when existing supplies and operational arrangements expire in March 2029, “although no final decision has been made,” majority shareholder Rio Tinto Plc said in a statement on Wednesday. The facility, operated by Houston-based NRG Energy Inc., had been slated to close in 2035.

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Gladstone started operating in 1976 and is the largest power plant in Queensland state, representing more than 7% of Australia’s coal-generation capacity at 1,680 megawatts. Each year, approximately 4 million metric tons of coal are railed to the site from coalfields in the state.

The announcement comes weeks after Australia pledged to cut greenhouse gas emissions within a range of 62% to 70% by 2035, from 2005 levels. That fell short of BloombergNEF’s assessment that the country must slash emissions by 71% in the next decade to be aligned with a credible pathway to net zero by mid-century.

Gladstone’s owners will engage with the energy market and on options for the future use of the site, which will inform the timeline and strategy for retirement of the facility, according to the statement. Existing power supply contracts, including to Boyne Smelters Ltd, will remain in place until its closure, it said.

“Private investors are getting out of coal, because it’s clear that renewable power backed by batteries makes economic sense,” said Ben McLeod, economist and senior adviser to the Climate Council, an advocacy group.

Australia’s aging coal fleet still forms the backbone of power generation but is mostly expected to close over the next 10 years. It has been hit by increasingly frequent outages, adding to market volatility. Coal was more expensive to run in Australia than solar, wind and combined-cycle gas turbines in the second half of 2024, BloombergNEF data show.

Rio Tinto owns a 42.125% stake in Gladstone, while an NRG unit owns 37.5%. The other shareholders are Southern Cross GPS Pty, Ryowa II GPS Pty and YKK GPS Pty.

(Updates with analyst comment in seventh paragraph.)

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