June 17, 2022
National Research Director Peter Colley writes about the closure of WA coal-fired power stations.
The state-owned coal power stations in Western Australia join the list of those around the country closing by 2030, but at least there has been some planning for it.
The Premier of Western Australia, Mark McGowan, announced on 14 June that the remaining state-owned coal power generators would close before 2030. While the closure of the Muja C units in 2022 and 2024 had been previously announced, the new statement puts closure dates of 2027 on the Collie power station, and 2029 on the Muja D units.
The only remaining coal power will be the privately-owned Bluewaters 1 and 2 stations. They have no closure dates set, but have been in significant financial trouble in recent years along with the their principal coal supplier, Griffin Coal. The prospect of the end of coal mining and coal power in Western Australia is very real.
The coal for Muja and Collie Power comes from the Premier Coal, and its closure must be tied to that of the power stations. Many hundreds of jobs are at stake.
WA has cheap gas (compared to the eastern States) by virtue of its domestic gas reservation policy, but the real driver of the closures is the enormous amount of renewable energy being deployed across the State, and even by heavy industry such as mines.
There is no picture postcard solution for the workers and community of Collie, but at least these closures have been anticipated for some time and the Labor Government has been working since 2019 to assist the people of Collie through the transition. At the highest level, there has been a Collie Delivery Unit within the Premiers Department, and in 2020 the first Collie Just Transition Plan was delivered.
Rather than denying that big change was on the way, and hoping that the economics of coal power would survive the challenge of renewables – and national emission reduction goals – the union in Collie has been an active participant in the plans being developed and implemented for the town.
Before the recent announcement that WA government had already invested over $115 million in various project to stimulate new industry in Collie – from tourism to mining industry training facilities. There has now been a further half a billion dollars of funds committed to the region.
The power stations and the coal mines themselves will require substantial remediation work – providing ongoing jobs for many years.
The WA announcement follows other recent “brought-forward” closure announcements with respect to Yallourn, Loy Yang A, Bayswater and Eraring. There is zero prospect of any new coal fired power being built – there is simply no private investor interest , and even a publicly owned power station would need endless protection from the competition from renewables.
There is some prospect that “capacity payments” in the National Electricity Market – paying dispatchable generation to be available rather than actually produce power – might sustain some coal power for longer, but that is more likely to boost gas, hydro and battery storage that can be turned on and off easily.
The domestic coal power generation industry is in far more trouble that the export coal industry, which is currently benefiting from super-high prices. However, the very high prices (in part at least a temporary spike due to the Russia-Ukraine way) are not stimulating new investment in coal mining here or in other countries. And the announcement on 15 June by BHP that it will runs its very large Mt Arthur thermal coal mine to closure in 2030 – and thereby joining Glencore which has also committed to running its mines to closure – means that signs of major change are appearing for export thermal coal.
With a new Labor Government in Canberra we have an opportunity for federal leadership in fair and just transition for coal power generation over the next two decades. And we better develop much greater expertise and experience in doing that because it will be needed for other industries (not just coal) facing major change later on. In various forms the union has been saying this for some years now, and the future is getting closer.