The last remaining state-owned coal-fired power stations in WA will close by 2030, with the government also announcing a big investment in renewables and energy storage, including pumped hydro.
The last remaining state-owned coal-fired power stations in Western Australia will close by 2030, with Premier Mark McGowan signaling the state's exit from the industry.
Synergy-operated power stations Muja - the oldest power station in the state - and Collie, will close in 2029 and 2027 respectively.
In addition, the state government said it would not commission any new gas-fired power stations on the SWIS after 2030.
Speaking at Collie this afternoon, Mr McGowan and Energy Minister Bill Johnston said the government would instead allocate billions towards bolstering WA’s renewable energy capacity.
Around $3.8 billion will be poured into building a new 'green power' infrastructure in the South West Interconnected System to maintain supply.
This would include big investments in energy storage, comprising batteries and pumped hydro.
In its rationale for the decision, the state government said WA’s electricity system was being 'increasingly challenged' by the uptake of rooftop solar.
Mr Johnston said an extra 1 megawatt rooftop solar capacity was installed every working day in Western Australia.
Last year, 320MW of rooftop solar was installed.
He said these pressures force Synergy to offload excess power generated during the day at a loss and added additional maintenance and generation costs, which were then borne by taxpayers.
Mr McGowan said Collie had literally powered the state for more than a century.
"The reality is our current electricity system is becoming increasingly unsustainable due to the uptake of rooftop solar and growing demand for renewable options for generation," the premier said.
"Maintaining the status quo would see average yearly household power bills increase by over $1,200 within eight years."
Mr McGowan said the alternative was that taxpayers would have to spend billions subsidising the system.
The government estimates 1,200 workers in the area, including employees in coal mines and power stations plus related contractors, will be impacted by the closures.
That compares to Collie’s estimated population of 7,100.
The Premier Coal mine, owned by China-backed Yancoal, is the main supplier to the government power stations.
Energy minister Bill Johnston said the government had been in commercial discussions with Premier, as it needed to ensure a supply of coal up to 2029.
The government also needs to ensure there is a sufficient supply for other businesses in WA, including manufacturers, that use coal.
The government declined to comment on the future of the privately owned Bluewaters power station, also at Collie.
“That’s a private power station so that’s a matter for them,” Mr McGowan said.
Bluewaters buys its coal mainly from the Griffin mine, which has incurred big losses under the ownership of India’s Lanco Infratech.
Bluewaters has a capacity of 416 megawatts, less than Muja (854MW) but bigger than Collie (300MW).
The state government said it would allocate $547 million to support the town during the transition, including a $200 million spend on skills and training opportunities for affected workers.
Of the total, $300 million would be spent on decommissioning the Muja and Collie facilities rather than attracting new industries.
The announcement comes nearly three years after the state government flagged plans to scale back two of four operating units at Muja power station.
Muja C's Unit 5 will close later this year and Unit 6 in 2024.
The closures come against the backdrop of an energy crisis on Australia’s east coast, triggered by coal-station outages, high demand and issues in global and domestic gas markets.
Mr Johnston described pumped hydro as the lowest risk energy storage option for the SWIS.
It involves the use of renewable power to pump water into storage reservoirs during the day, followed by the release of that water to generate power during the evening.
Mr Johnston said Synergy was still assessing options, which could involve the use of coal mine voids for water storage.
He estimated it would take 6 to 7 years to complete the analysis, approvals and construction of pumped hydro projects.
The aim was to have 800MW of pumped hydro capacity.
He added that the pumped hydro was likely to be very close to Collie, which meant there would not be a need for extra transmission capacity.
The government’s plan comes after the WA Liberals took an ambitious plan to the 2021 state election under former leader Zak Kirkup, promising to close all publicly-owned power stations by 2025.
Chamber of Commerce and Industry of WA chief economist Aaron Morey welcomed today’s announcement, saying it provided the business community with more certainty on the transition towards a cleaner energy future.
“WA businesses understand the need for action to mitigate climate change, and it is welcome that WA’s emissions will be reduced,” Mr Morey said.
“CCIWA has engaged closely with our members on this important issue for some time, with a consistent position recognising the need to move forward.”
Mr Morey said it was critical for the competitiveness of local industry that reliability was not compromised in favour of other priorities.
