05/05/2017 - 15:18

Industry group backs private sector on renewables

05/05/2017 - 15:18

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The WA Independent Power Association has called for the state government to block a plan by public generator Synergy to set up a new renewable energy fund, while supporting a move to reduce Synergy’s capacity.

Industry group backs private sector on renewables
The state's South West power network has a large excess capacity.

The WA Independent Power Association has called for the state government to block a plan by public generator Synergy to set up a new renewable energy fund, while supporting a move to reduce Synergy’s capacity.

It follows this morning’s announcement by Energy Minister Ben Wyatt that he would shut down the 240-megawatt Muja AB coal-fired power plant, and six gas turbines across three plants, as part of a move to cut generation capacity in the state's South West network by 435MW.

That move was foreshadowed last year by former energy minister Mike Nahan.

WA IPA chairman Richard Harris welcomed that move, saying the coal-fired generator should never have been brought out of retirement, but warned that a plan by state-owned Synergy to launch a new renewable energy fund would embed a dominance by the generator.

“The WA IPA calls on the minister to maintain the Barnett’s government’s decision to block Synergy’s plans to set up a privately funded, government-backed renewable energy fund,” Mr Harris said.

“Such a fund would would lock-in Synergy’s long-held market dominance in WA and crowd out investment in competitive private renewable energy generation projects.”

There was some ambiguity on that issue in the state government’s announcement today, with Mr Wyatt’s new cap on Synergy’s generation at 2,275MW specifically excluding renewables.

A second question, Mr Harris said, was whether Synergy would give up equivalent network rights to allow private players more space to compete.

Mr Harris said WA IPA had been lobbying for two further reforms.

“Firstly, open more of the electricity market for competition so a greater number of customers can choose who supplies their power,” he said.

“Currently less than 2 per cent of customers have this choice”

That would mean allowing 23,000 more small businesses to buy power from independent providers by lowering the threshold at which they can compete in the market from 50MW hours per annum to 20MW hours per annum.

Modelling suggests that would cut prices by 20 per cent, Mr Harris said

“And secondly, ensure Synergy must sell wholesale electricity to other retailers at competitive prices,” he said.

“The policy work for the two reforms has already been undertaken by the Public Utilities Office and there is widespread industry support for them.”

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