It’s been a great week in the world of power – albeit for different reasons depending on which side of Australia you’re on.
As much of the country struggles to keep the lights on, WA has taken a major step in its transition to renewable energy, announcing the end of state-run coal-fired power plants by 2030.
This is expected to have a big impact on household bills in the future, but why is it happening now and what does it all mean?
Here is an overview of this week’s local energy news.
What are the big changes?
The WA government had previously pledged to retire parts of its largest coal-fired power station, the Muja Power Station.
But this week we found out what happens next – as he announced plans to shut down the two coal-fired power stations run by state electricity supplier Synergy by 2030.
By phasing out coal-fired electricity, Synergy estimates its carbon emissions would decrease by 80% by 2030.
In addition to marking a significant turning point for the nearby mining town of Collie, it’s a big change for the state’s energy grid.
To make up for lost capacity, the government will spend $3.8 billion over 10 years to add more renewable capacity to the grid.
Why the change?
WA’s power grid is changing, leaving less room for coal to fit into the mix.
Last year alone, about 300 megawatts of rooftop solar were added to the grid — almost as much as the smaller of the two state-run plants.
This means that during the day, coal-fired power plants have little or no need to run, but this causes problems because coal-fired power plants are not designed to be switched on and off.
It takes 18 hours for a plant to go from shutdown to full operation.
Will it drive up electricity bills?
The government does not give a straight answer, but says sticking to coal-fired power would ultimately cost more.
Premier Mark McGowan has said that if coal-fired plants continue to operate, bills will rise by around $1,200 a year by 2030.
Instead, he pledged to keep power prices capped at inflation until at least 2025.
At the same time, the government also hopes that these changes will make Synergy more self-sufficient and less dependent on government subsidies.
Over the next four years, the government plans to award Synergy $783.3 million in “financial sustainability” grants.
Indeed, it’s money acknowledging that Synergy doesn’t always act like a regular business, as there are times when it has to do things for reasons other than financial gain.
But it is hoped that by increasing the renewable energy mix, Synergy’s costs will be lower.
So what will replace coal-fired power plants?
Some of the capacity will be replaced by renewables already added to the grid, including rooftop solar.
But there must always be a capacity to supply electricity when the sun is not shining or when there is additional demand.
That’s why the new projects outlined in this announcement include 800 MW of wind capacity and 2,000 MWh of storage, including fast-starting lithium-ion batteries.
Good news for the town of Collie, the government is also looking at other technologies, including pumped hydro.
When renewable energy is available, it uses that energy to pump water up a hill, “storing” the energy.
Then, when power is needed, it is allowed to run back down the hill, through a turbine, which adds power to the grid.
But the government isn’t just locking itself into these schemes, with Synergy having some latitude in how it invests the $3.8 billion it receives.
The government is still waiting a bit for hydrogen.
“In the future, we would expect hydrogen to be able to replace natural gas, but that is currently not financially viable,” Energy Minister Bill Johnston said this week.
Currently, gas provides about 25% of WA’s electricity needs.
New gas-fired power stations have been ruled out beyond 2030, and the government says it is unlikely to need to build any before then.
“But we will be very careful in our approach as we approach 2030, and if we have to act, we will,” Mr Johnston said.
Part of WA’s hydrogen future will center around the Asian renewables hub, northeast of Port Hedland.
The government announced this week that BP would take a 40.5% stake in the hub, which plans to produce both wind and solar power, as well as produce green hydrogen.
Will this affect WA’s energy security?
The Prime Minister has made it clear that he is confident that this plan will secure WA’s energy supply in the future and the state will avoid problems encountered elsewhere.
Part of the reason for these problems has been the nature of the electricity market in the east, which is very different from the public system in WA.
Soaring gas prices have also contributed, but WA largely doesn’t have to worry about that due to its domestic reservation policy.
This policy means that 15% of gas reserves under state jurisdiction are quarantined for the local market.
That’s good news, both for now and for the future, with WA planning to rely on gas for more of its base power, given that it can be ignited in as little time. only 16 minutes.
“When you have a reservation policy with gas, you can fire gas plants immediately,” Mr McGowan said this week.
“When you pumped hydro and batteries, the technology is now so good that you can provide baseload power using those mechanisms combined.”
What do the experts think?
A group of academics from WA’s five universities this week accused the state government of being too close to the gas industry and said shutting down coal-fired power stations was just part of the solution.
“Their emissions are lower than the four alumina refineries we have in the state and far lower than the LNG production facilities we have in this state,” said Curtin Law School scholar Hugh Finn. .
On the other side of the coin, energy policy expert Katharine McKenzie said the plan was exciting because it allowed for much more detailed planning than before.
She said it also makes economic sense, given the high cost of coal-fired power plants.
“But you also see that this large amount of rooftop solar that’s coming in, there’s a real opportunity to make the most of it and aggregate it so that it acts almost like a power plant itself- even,” she said.
That’s the goal of Synergy’s Symphony project, which is trying to figure out how the utility can take advantage of solar panels and batteries to work together more efficiently.
How does this affect the private sector?
Trends within the industry are also accelerating the move away from coal as companies attempt to decarbonise, creating even more opportunities, according to McKenzie.
“They’re looking at replacing their current use of fossil fuel generation with renewables, but they’re also looking at where they’re using fossil fuels directly in their processes, how they can replace them with direct renewables as well,” says- she.
“And so, coming out of that, you have this huge demand for renewable energy coming in, which has to be met.”
This means that the private sector is also likely to start coming to the table, now that the government’s plan has been made public.
“The Western Australian government has therefore said it will commit $3.8 billion to develop new renewable energy projects and potentially pumped hydropower,” Ms McKenzie said.
“There is obviously also a role for the private sector.”