No easy power solutions

During the past four years, Western Australia has experienced three major power crises, raising serious questions about management of the state's energy infrastructure.

In February 2004, WA residents had to cope with power cuts in the midst of a summer heat wave.

In January this year, electricity supplies were restricted after an incident at the Woodside Petroleum-operated Karratha gas plant.

And now, industry across the state is facing the prospect of long-term disruption following the explosion at the Apache Energy-operated Varanus Island gas plant.

This week's incident has led to renewed calls for an integrated energy strategy for the state, to ensure Western Australians do not have to face this kind of problem again.

There have also been calls for better contingency planning.

Before considering solutions, let's be clear about the current situation.

All three incidents have highlighted the state's dependence on a handful of energy infrastructure assets.

The state's gas supplies come overwhelmingly from the production facilities at Karratha and Varanus Island - and the main reason, quite simply, is that historically they have been the most commercially attractive fuel sources.

The gas is transported to the South West through the Dampier-to-Bunbury pipeline, while the Goldfields gas pipeline takes fuel to that part of the state.

One of the biggest challenges facing WA is the state's isolation. Unlike the east coast of Australia, and unlike most countries around the world, WA is unable to link its power infrastructure with other jurisdictions.

Technically that would be possible, but imagine the cost of building an electricity distribution network across the Nullarbor.

Developing alternative electricity sources is another option that is being discussed.

The state's energy policy is already based on having reserve capacity to ensure the lights stay on.

Do we want to build additional coal-fired power stations to ensure we can cope with any future disruptions to gas supplies?

And if we chose that option, what would happen if coal supplies - which come from two adjoining mines at Collie - suffered an unexpected disruption?

That is extremely unlikely, but then nobody predicted this year's cuts to gas supplies.

Should we consider nuclear power, to deliver more diversity in our power supplies?

Apart from the environmental issues thrown up by that question, what financial price is the state willing to pay for the extra generating capacity?

Another option that has been discussed is the construction of oil and gas stores in the south of the state.

If the state opted for extra storage facilities, there might be enough fuel to last a few days.

But is anybody really prepared to put aside two months worth of gas supplies, which would be needed to see industry through the current crisis?

Building a second gas pipeline is another idea that comes up from time to time.

However that is effectively happening anyway through the 'looping' process that is being used to lift the Dampier pipeline's capacity.

Like most complex policy issues, there is no silver bullet solution.

The current problem will prove very costly for many businesses in WA but most of the alternatives put forward would also be very costly, for taxpayers and consumers at large.

The alternatives need to be carefully evaluated before we rush in.