PERTH (miningweekly.com) – Stuttering coal supplies could spell trouble for ASX-listed Origin Energy’s Eraring power station in the 2023 financial year.

The company told shareholders this week that ongoing challenges with coal supply have been impacting Eraring power station throughout 2022; however, the situation has deteriorated significantly in recent weeks, with material under-delivery of coal compared to expectations, and with coal miner Centennial Coal notifying Origin of further production constraints at its Mandalong mine.

Origin noted that deliveries from the Mandalong mine are expected to be interrupted during the remainder of 2022 and into the first half of 2023, while equipment supply chain delays are also expected to impact coal deliveries in 2023.

“The recent material under-delivery of coal to Eraring results in lower output from the plant, additional replacement coal purchases at significantly higher prices, and is being exacerbated by coal delivery constraints via rail. In addition, the lower output from Eraring results in a greater exposure to the purchase of electricity at current high spot prices in order to meet customer demand,” Origin said.

“The challenges with coal delivery to Eraring power station are expected to persist into 2023. This is expected to result in a material increase in coal purchasing costs given high coal prices and continued exposure to high spot electricity prices,” the company added.

Origin said that while it had worked closely with coal suppliers to secure additional coal supply by rail, there were limitations to the amount of coal that could be delivered to the plant by this method.

“Therefore, there is uncertainty regarding the plant’s output in 2023,” the company told shareholders, adding that it was part-way through finalising coal contracting arrangements for 2023.