The owner of the last remaining privately owned coal-fired generation units in Western Australia have been hit with heavy fines by the state regulator because of its past bidding behaviour.
The Economic Regulation Authority announced on Monday that Bluewaters Power 1 Pty Ltd and Bluewaters Power 2 Pty Ltd had breached the rules governing Western Australia’s Wholesale Electricity Market between October 2023 and June 2024.
Bluewaters operates the only privately owned coal-fired power station in W.A., and runs two 217 megawatt units burning sub bituminous coal. It opened in 2009, making it the youngest coal generation unit in the country.
W.A. is due to close the last of its state-owned coal generators in Collie by the end of 2029 and it is expected that Bluewaters – despite its relative youth, will also close by then, if not earlier, because of the financial difficulties of its owner Griffin Energy and the expiry of state government support next year.
The ERA says its investigations into their bidding behaviour found that Bluewaters units priced their electricity at higher prices than were efficient and permitted under the rules governing the local market.
It said this had the effect of inflating market costs by around $30 million. The ERA imposed fines totalling $5 million, but these fines, and the conclusions of the investigation, are being contested by the Bluewaters owners.
“Bluewaters is the third largest generator in the market, and has been active for many years, and yet we have found that it has made a significant number of irregular price offers during the investigation period,” ERA chair Steven Edwell said in a statement.
“Bluewaters’ conduct has had a material effect on prices in the real time market, which is why we believe a significant financial penalty is warranted.
“The ERA strongly encourages all companies participating in the electricity and gas markets to ensure they are acting within the bounds of the market rules, because we are watching and will take action where required.”
The dispute will now go before the Electricity Review Board.
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