Liberals promise rapid switch from coal

Synergy would switch off its coal generators by 2025, keep gas on, and underwrite a 1.5 gigawatt renewable hub, in a Liberal election commitment.

The policy, announced this morning, would mean government owned Synergy shuts its Muja D and Collie power stations by 2025, much earlier than expected.

It is understood contracts with the two Bluewaters coal generators, which sell power to Synergy, will end in the late 2020s and not be renewed.

The state government has already announced the closure of the Muja C power station by 2024.

About 41 per cent of WA’s power supply came from coal in 2020, and a similar portion from gas.

Under the Liberal promise, Synergy would be tasked with underwriting a 1.5GW project in the Mid West, making a commitment to buy power offtake from a private party which would finance and construct the project.

To transmit the energy across the South West Interconnected System, Western Power would invest about $500 million to upgrade the network from Three Springs to Geraldton.

That project would be funded internally by Western Power.

A further 500 megawatts of battery storage would be built to stabilise the grid, or possible more, depending on demand.

That would add to 150MW already planned by Synergy and Western Power.

While the policy was branded as moving the state government to net zero by 2030, shadow energy minister David Honey said Synergy’s gas peaking generators would continue to operate in the near term.

Dr Honey said he was confident the policy would not increase power prices, although he said modelling had not been done.

He said discussions with industry experts indicated it was achievable, particularly if approvals were accelerated.

One public document had suggested a levelized cost of electricity for a Mid West hydrogen renewable project of $100/MWh, which would be above what Synergy pays on most of its offtake deals.

However, it is understood a recent offtake deal for a wind farm in the Mid West was signed for less than $50/MWh.

Western Power would also need to recoup the costs of the capital investments into the network, while proponents would need to recover the cost of new battery builds.

Hydrogen

Liberal leader Zak Kirkup also promised ambition to develop a hydrogen industry in WA, saying the 1.5GW renewable project would be followed by a larger, 4.5GW renewable hydrogen plant.

The offtake deal for stage one of the project would be intended to help finance a second stage.

Mr Kirkup said it was styled in the mould of former Liberal premier Charles Court, who used a state government agency to underwrite the North West Shelf Venture project.

There was also a $400 million commitment to five funds intended to support Collie workers, diversify into new markets and incentivise critical manufacturing.

All of that was intended to spark hydrogen powered industry and a green manufacturing boom.

“When people first heard about the North West Shelf project, when people first heard about state agreements, some people said it was ambitious, some said it was bold, some said it couldn’t be done,” Mr Kirkup said.

“The WA I know has been an ambitious state.”

He said WA had to lead from the front on new technology or risk being left behind.

Notably, the state government recently opened an expression of interest process for a renewable hydrogen project at Oakajee.

Reliability, price battle

Labor Party election spokesperson Rita Saffioti said it would increase prices and hit reliability.

“It takes thorough consideration, not reckless announcements,” Ms Saffioti said.

“It hasn’t been costed by anybody.

“These reckless thought bubbles have to stop, they’re not a minority party."

She said the government estimated the announcement would cost billions.

One stumble by Mr Kirkup in an interview this morning was to say government enterprises such as Synergy have their debt off the government’s books, but Ms Saffioti said that was not correct.

Switching positions

The Conservation Council of WA welcomed the plan, while the Institute of Public Affairs condemned it.

CCWA said it would create jobs, while the IPA said it would cost jobs.

CCWA director Piers Verstegen said the policy showed action on climate change and renewable energy did not need to be held back by partisanship.

“The policy shows that action on climate change and renewable energy does not need to be held back any longer by partisan politicking. 

“Cutting pollution and creating jobs, and growing a cleaner and stronger economy simply makes sense.

“We call on the McGowan government to match and better this policy because it is the right future for Western Australia and for West Australians.

“The opportunity to create a new green metals and manufacturing hub in Collie has the potential to deliver many more secure and well-paid jobs than the coal industry currently provides.”

IPA research fellow Cian Hussey said net zero emissions would mean net zero jobs.

“The WA Liberals are disconnected from mainstream Western Australians working in the agricultural, manufacturing, and mining sectors which would be destroyed by net zero emissions,’ Mr Hussey said.

However, the Liberal plan is only for net zero emissions from the state government’s operations and businesses, not the whole state.

“Good on Mick Murray for highlighting that this policy would destroy thousands of jobs," Mr Hussey said.

“It’s electorates like his in Collie-Preston that would be most affected by the economic self-harm of this net zero emissions policy.

“IPA research has shown that a net zero emissions target will put over 650,000 jobs at direct risk across Australia. 

“Western Australians are proud of their mining and agricultural industries, and they have no interest in the climate alarmism of the east-coast inner-city elites who demand the jobs of hard-working men and women be sacrificed to appease their obsession with carbon emissions.”

But it is unclear how the target would impact the agricultural industry or mining, aside from coal, which represents a small share of the state’s economy.