The biggest coal plant in the country is shutting down seven years early due to changes in the national energy market. The Eraring coal-fired power station, located in Lake Macquarie, NSW, is set to close in 2025 as the industry responds to pressure of cheap renewable energy.

Origin Energy said the decision was motivated by "rapidly changing conditions in the national electricity market, which are increasingly not well suited to traditional baseload power stations".

The company plans to replace the coal plant with a 700 megawatt battery that will store renewable energy.

Eraring is the latest in a series of coal plants announcing early closures. Last week, AGL announced it would bring forward the closure of the Bayswater generator in NSW from 2035 to 2033 and its Loy Yang A plant in Victoria from 2048 to 2045. Yallourn power station in Victoria will also close early in 2028 and Liddell power station in NSW is set to shut in 2023.

“The reality is the economics of coal-fired power stations are being put under increasing, unsustainable pressure by cleaner and lower cost generation, including solar, wind and batteries,” Origin’s chief executive, Frank Calabria, said in a statement.

The announcement of the Eraring plant closure puts extra pressure on the government to develop a national plan for the clean energy transition.

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