Essay by Eric Worrall
“… There was a lukewarm response from the market to supply extra capacity …”
‘Dirty’ diesel generators may be needed during Perth summer as WA energy crisis deepens
The body that runs Western Australia’s biggest power system may have to spend tens of millions of dollars hiring diesel-fired backup generators as part of desperate efforts to keep the lights on this summer.
- WA’s power supplies have suffered from widespread disruption
- There was a lukewarm response from the market to supply extra capacity
- Generators may be needed if the electricity grid is overloaded
Amid widespread disruptions to WA’s power supplies, the Australian Energy Market Operator called for bids in September from energy companies and users to provide an extra 174MW of capacity for four months from December 1.
However, it is understood the system operator received a subdued response from the market when the tender period for additional capacity closed last month.
AEMO is now believed to be considering the use of dirty diesel-fired generators that can provide backup power in the event the grid comes under stress over the coming period.
In calling for extra capacity, AEMO in September noted the system was dealing with a “shortfall” of reserves caused by a number of different reasons.
Among them was the early retirement of a power station in Kwinana, south of Perth, an unexpected outage of another gas-fired plant north of the city and an increase in forecasts for peak demand.
On top of this, AEMO and the state Labor government have also been hit by the fallout from a worsening crisis in WA’s coal basin, which has long formed the backbone of the electricity industry.
Two months ago, the Indian-owned Griffin Coal mine near Collie, 180km south of Perth, fell into receivership following years of operating problems and mounting losses and debt.
The primary cause of this energy capacity crisis, and the “lukewarm” response to requests for extra capacity, in my opinion is regulatory hostility towards reliable energy and coal mining.
For example, the Western Australian Government has been pushing the claim they don’t need coal plants anymore, because of rooftop solar.
State-owned coal power stations to be retired by 2030
Tuesday, 14 June 2022
- Muja and Collie power stations to be retired in response to massive uptake of rooftop solar and renewables
- Changes required to improve system security and protect against higher power bills, as WA transitions to greater use of renewables
- Without action average yearly household electricity costs are projected to increase by more than $1,200 by 2030
- $547.4 million package to secure new industrial projects and create jobs in Collie
- Brings total McGowan Government investment in Collie to more than $662 million
- McGowan Government, through Synergy, to invest an estimated $3.8 billion in new green power infrastructure around the State, including in Collie and regional WA
- Investment expected to pay for itself by 2030-31 relative to status quo of increasing electricity subsidies
- Household electricity prices remain capped to inflation
Western Australia’s State-owned coal power stations will be retired by 2030 – as the continued uptake of rooftop solar and renewables forces changes in the energy system to ensure a secure electricity supply and guard against higher power bills.
Collie Power Station will close in late-2027 and Muja D in late-2029. As previously announced, Muja C’s Unit 5 will close later this year and Unit 6 in 2024.
You might think, if Western Australia wants reliable zero carbon energy, why not build nuclear? Mineral rich Western Australia has known deposits of 226,000 tons of Uranium, and vast empty spaces where reactors could be built far away from human habitation. But even mining Uranium is banned in Western Australia, let alone actually building a nuclear reactor.
This energy crisis could damage Australia’s federal government finances, not just Western Australia. A sizeable portion of Australia’s national tax revenue is raised from mining operations in Western Australia, a fact frequently cited by Western Australian politicians when claiming that Western Australia provides more than its fair share of taxes. But those Western Australian mines need reliable, affordable energy, to dig up the minerals, and to process and ship the product.
No doubt the Western Australian Government will respond to this energy crisis by offering more subsidies for rooftop solar.
Update (EW): Changed “West Australia” to “Western Australia”.