In an opinion piece in the West Australian in February I explained why the State Government cannot deliver its much hyped energy transition plan.
That plan to close almost a thousand Megawatts of baseload coal capacity by the end of 2029 and replace it with renewable generation and energy storage will fail because their budget for it is far too small, their timeframe is far too tight, and their hope that someone in industry will come up with a magic solution for energy storage is a pipedream.
Almost everyone in and around the industry understands this, and hopefully those experts are telling the McGowan Government they need a new plan.
And I hope the Premier is listening, because the current plan will plunge our state into darkness and disaster.
The Government has $3 billion set aside for electricity generator Synergy to fund their proposed transition, and in estimates Synergy has confirmed that this will build 410 Megawatts of wind farms and 4,400 MW hours of battery storage.
Another $800 million will go to making Water Corp’s next desalination plant run on wind energy.
This is nowhere near enough generation capacity or storage to make the plan work; it won’t even come close to keeping the lights on in coming years.
It is already too late to have massive storage and increases in renewable generation in place in time because it takes years to deliver. We are shutting down coal generation now.
The Government now faces a choice if it wants to provide reliable and affordable power into the future.
It can either extend the life of current coal generators in Collie, or it can invest in new gas baseload generation further north, or a combination of the two.
Failure to do so will result in chaos on the grid and blackouts in high demand periods.
But which of these options is better?
Some of the Collie coal generators will be hard to keep going. They are simply old and run down.
But units 7 and 8 at the Muja Station could possibly give longer service; their age based retirement is scheduled for July 2036 according to the energy regulator AEMO.
And it is possible to keep the Collie A station going even longer until a safe and reliable transition to renewables is achieved.
The question is whether the coalfields and its mining companies can be set on a sustainable footing to maintain supply, which requires some significant intervention.
The other option is to keep the current timeframe for coal closures – all Synergy coal generation gone by the end of 2029 – and replace some of that baseload power with new gas generators.
I think it will need some 300MW of new gas generation capacity to maintain stability in the grid and keep your lights on at home.
This will require additional gas capacity in the Dampier to Bunbury Gas Pipeline, but that can be developed in a cost-effective manner.
The Premier could use his newfound love of nuclear submarines coming to Perth to promote a nuclear energy option here, but the economics don’t stack up at this point.
Maybe it will in a decade or more as technology changes, but right now it’s not an option despite Mark McGowan’s enthusiasm.
There is another state budget coming up with another multi-billion dollar surplus.
The $3.8 billion energy transition fund won’t come close to working, so the Premier has to invest in either extending coal generation or new gas.
In either case the cost is in the hundreds of millions of dollars.
But that is chicken feed compared to the billions that will be required to have stable renewable generation, storage and distribution.
The final cost for the full transition proposed by the Government is more like $20 billion than the $3.8 billion in the budget already.
It would be best to spread that investment over a decade or two, but that requires the investment in coal extension or gas in the meantime.
My money would be on 300MW of new gas just north of Perth, making use of an upgraded gas pipeline with additional looping sections.
That would give maximum reliability at the minimum price increase.
But I would be keeping some coal generation in place until I was sure the new system could manage without it.
Let’s see what the Premier does.