The Western Australian government has ended its involvement in coal power, saying the state will exit the market before 2030 and pump billions into renewables and storage.
Key points:
- The public company Synergy will close its two coal-fired power plants by 2029
- The government will invest billions in renewable energy
- Approximately 1,200 employees of the two plants will be affected
In a historic announcement this afternoon, Premier Mark McGowan and Energy Minister Bill Johnston revealed that state-owned electricity supplier Synergy will shut down its remaining coal-fired power plants by 2029.
Mr McGowan said the change was needed because the proliferation of renewable energy sources meant that coal-fired power was becoming more expensive.
He said that without change, household electricity bills could rise by around $1,200 a year by 2030.
Around 1,200 workers in Collie and surrounding areas will be affected by the decision, although the government, industry and unions aim to retrain or re-employ workers under a “just transition” scheme.
Synergy currently owns and operates two coal-fired power stations, the 854 MW Muja power station and the 340 MW Collie asset, both located near Collie, approximately 200 km south of Perth.
The government had already announced its planned closure dates of October this year and 2024 for some older Muja units.
Renewable projects to scale up
Under the decision announced on Tuesday, Collie will be closed by October 2027 while the remaining units of Muja will be closed two years later, by October 2029.
The exits will leave a working coal-fired power plant in WA – the Bluewaters Private Generator which is also near Collie.
As part of this overhaul, the government will spend $3.5 billion over 10 years to build renewable energy capacity to replace lost generation.
This will include around 800MW of new wind capacity as well as over 2,000MWh of storage, including fast-starting lithium-ion batteries.
Crucially, the government will also push for the construction of so-called deep storage, such as pumped hydroelectric capacity, which can supply electricity for days at a time if needed.
The government is believed to be looking at the Collie area, with its steep topography and mining voids, as a prime candidate for pumped hydropower investment.
Mr McGowan said gas-fired power stations would continue to supply additional power, particularly due to WA’s gas reservation policy.
He said the government does not plan to build any new gasworks after 2030, but has left the door open until then.
The Prime Minister has also pledged to cap electricity price increases with inflation until at least 2025.
Focus on jobs
Mr McGowan was in Collie to make the announcement on Tuesday and tried to allay local concerns.
He pointed out that the government was spending $660 million in the city, including $300 million to dismantle the plants and $250 million for “industry attraction and transition programs”.
“We want to make sure that Collie remains thriving and prosperous, that people who go to school in Collie can continue to have a good job here in this community,” Mr McGowan said.
CFMEU Secretary of State Greg Busson said his main priority was to secure permanent employment for those affected.
“We see around the world now that people are trying to get out of coal and power generation, but the main concern is that everyone who has a job in the city can continue to live the lifestyle they have. with well-paying jobs and good conditions,” he said. .
“At this point, we have not secured an equivalent replacement for an industry that will replace these jobs, with the number of jobs and the terms and conditions within them.
But Mr Busson said he was happy with the way the transition was going, particularly the marketing of Collie as a tourist town.
“Compared to what’s happened in other states, I think we’re way ahead of other states in how they’ve handled the situation,” he said.
“The consultation with unions and employers in the city has been great. We can always do better. But I think we are far superior to what happened on the east coast.”
Solar on the roof in the spotlight
Mr Johnston said the shift away from coal in WA was being accelerated by the rapid adoption of rooftop solar, which was cutting income from thermal generators.
He said closing Synergy’s remaining coal-fired plants would help transition to green power while simultaneously improving the company’s bottom line.
According to the minister, coal-fired power plants are ill-equipped to face competition from renewables because they are designed to operate in steady-state – or base-load – all the time.
However, he said that renewable energy, by its nature, was variable in its output and that forced coal-fired power plants to scale up and down to match the output of wind and solar generators.
As a result, he said coal-fired power plants were earning less revenue at the same time as they racked up ever-larger maintenance bills, killing their business model.
Widespread abandonment of coal
State governments and energy companies across the country are reassessing the economic life of their coal plants.
The original energy is plans to close Australia’s largest coal-fired power station in New South Wales seven years at the start of 2025.
In August 2019, the McGowan government announced Muja’s phased retirement over two years from October 2022.
In December 2020, he released a 15-year plan to steer Collie away from his coal addiction and coal-fired power generation and developing other industries.
The prime minister said his government had learned from “difficult” experiences on Australia’s east coast and would require power station operators to provide at least three years’ notice of any future closures.
The WA Liberals took an ambitious plan for the 2021 national elections under former chief Zak Kirkup, vowing unsuccessfully to close all public power plants by 2025.
Local member Jodie Hanns, who appeared at the announcement alongside Messrs. McGowan and Johnston said it was a “difficult day” for the community, but she was confident the area had a “sustainable and vibrant” future.
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