It’s been a big week in the world of power – although for different reasons depending on which side of Australia you’re on.
As much of the country struggles to keep the lights onWA has taken an important step in the transition to renewable energy by announcing the end of state-run coal-fired power plants by 2030.
This is expected to have a major impact on household bills in the future, but why is it happening now and what does it all mean?
Here’s an overview of this week’s local energy news.
What are the big changes?
The WA government had previously pledged to retire parts of the largest coal-fired power station, the Muja power station.
But this week we found out what happens next — when it announced plans to shut down both coal-fired power plants that were run by state-owned Synergy by 2030†
By phasing out coal-fired energy, Synergy estimates that CO2 emissions will be reduced by 80 percent by 2030.
As well as marking a major turning point for the nearby coal mining town of Collieit’s a big shift for the state’s energy grid.
To make up for the loss in capacity, the government will spend $3.8 billion over 10 years to add more renewable capacity to the grid.
Why the shift?
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 was added to the grid — nearly the same as the smaller of the two state-run plants.
It means little or no coal-fired power plants need to be running during the day, but that causes problems because coal-fired power plants aren’t designed to turn on and off.
It takes 18 hours for an installation to go from disabled to fully operational.
Will this increase energy bills?
The government does not provide a ready-made answer, but says that sticking to coal-fired power would ultimately be more expensive.
Prime Minister Mark McGowan said that if coal plants continued to operate, bills would rise by about $1,200 a year by 2030.
Instead, he pledged to keep energy prices in line with inflation until at least 2025.
At the same time, the government hopes these changes can make Synergy more self-sufficient and less dependent on government subsidies.
Over the next four years, the government plans to give Synergy $783.3 million in “financial viability” grants.
In fact, that money is acknowledging that Synergy doesn’t always behave like a regular company because there are times when it has to do things for reasons other than financial gain.
But it is hoped that increasing the renewable energy mix will lower Synergy’s costs.
So what will replace the coal-fired power plants?
Some of the capacity will be replaced by renewable energy already added to the grid, including rooftop solar.
But there must still be a capacity to supply power when the sun is not shining, or when there is extra demand.
Therefore, the new projects outlined in this announcement include 800 MW of wind capacity and 2,000 MWh of storage – including fast-start lithium-ion batteries.
As welcome news to the city of Collie, the government is also exploring other technologies, including pumped hydro.
When renewable energy is available, it uses that power to pump water up a hill and store the energy.
Then, when the power is needed, it is allowed to fall back down the hill, through a turbine, which adds power to the grid.
But the government isn’t just locking itself in on these schemes, with Synergy being given some leeway in how it invests the $3.8 billion it receives.
What about hydrogen?
The government will keep hydrogen for a while longer.
“In the future, we would expect hydrogen to replace natural gas, but that’s not financially viable at the moment,” Energy Secretary Bill Johnston said this week.
Currently, gas supplies about 25 percent of WA’s power needs.
New gas-fired plants are barred after 2030, and the government says it’s unlikely there will be a need to build one before then.
“But we will be very careful in our approach as we move towards 2030, and if we need to take action, we will,” Johnston said.
Part of WA’s hydrogen future will be centered around the Asian Renewable Energy Hub, northeast of Port Hedland.
The government announced this week that BP would take a 40.5 percent stake in the hub, which plans to generate both wind and solar power and produce green hydrogen.
Will this affect the energy security of WA?
The Prime Minister made it clear that he was confident that this plan would secure WA’s energy supplies in the future and that the state would prevent the problems from occurring elsewhere.
Part of the reason for these problems was the nature of the electricity market in the east, which is vastly different from WA’s state-owned business system.
Sky-high gas prices have also contributed, but WA’s domestic reservation policy largely means nothing to worry about that.
That policy means: 15 percent of gas reserves within state jurisdiction have been quarantined for the local market.
It’s good news both now and in the future, as WA plans to rely on gas for more of its baseload power, as it can be started in just 16 minutes.
“If you have a gas reservation policy, you can turn gas plants on right away,” McGowan said this week.
“If you’ve pumped hydropower and batteries, the technology is now so good that you can deliver baseload power using those mechanisms combined.”
What do the experts think?
A group of academics from all five WA universities this week accused the state government of being too close to the gas industry and said closing the coal plants was only part of the solution.
“Their emissions are less than the four alumina refineries we have in the state and far less than the LNG production facilities we have in this state,” said Curtin academic law student Hugh Finn.
On the other side of the coin, energy policy specialist Katharine McKenzie said the plan was exciting because it allowed for much more detailed planning than was previously possible.
She said it also made economic sense, given how expensive coal-fired power plants were getting.
“But you also see that that large amount of solar energy on the roof that comes in is a real opportunity to make the most of that and put it together so that it works almost like a power plant itself,” she said.
That’s the goal of Synergy’s Project Symphony, which is trying to figure out how the utility can use solar panels and batteries to work together more efficiently.
How will this affect the private sector?
Industry trends are also accelerating coal’s shift as companies seek to decarbonise, creating even more opportunities, Ms McKenzie says.
“They’re really looking at replacing their current use of fossil fuel generation with renewable energy, but they’re also looking at where they use fossil fuel directly in their processes, how they can also replace that with direct renewable energy,” she said.
“And when you get out of that, there’s a huge amount of renewable energy demand coming in, and it needs to be filled.”
It means the private sector is likely to come to the table as well, now that the government plan is public.
“So the WA government has said it will commit $3.8 billion to developing new renewable projects and potentially pumped hydropower,” Ms McKenzie said.
“Of course there is also a role for the private sector.”
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