WA finally gives up on dirty, costly fossil plants

WA Energy Minister Mike Nahan has spent much of his career extolling the virtues of fossil fuel generation, but in the first few months of his new portfolio he’s spent much of the time being embarrassed by it.

The WA government has finally given up on the controversial refurbishment of units 1 and 2 of the ageing and highly polluting Muja coal-fired generator, and its attempts to extend the units 47-year old life. More than $266 million has been spent on what many perceive to be a half-baked attempt at upgrading old and dirty infrastructure.

The news comes as the WA Government also announces the closure of another ageing and dirty fossil fuel plant, the Kwinana C generator, from October 2015, saying it was too expensive to extend the life of the plant’s final unit.

But at the same time, a private developer, Tesla Holdings (no relation to the electric vehicle manufacturer) has unveiled plans for a diesel-fuelled peaking plant in the south of the state.

“Retirement is the right decision for these old, inefficient, largely coal-fired power stations. The attempt to extend the life of old Muja plant was madness — which is clear as the full cost of that decision has come to light so dramatically over recent weeks,” SEA  chief executive Kirsten Rose said.

‘It’s high time to make way for more efficient, low-carbon generation — specifically renewable energy.”

WA has some of the best solar resources in the world, and many developers are keen to develop solar PV and solar thermal plants with storage in the state – if they can sign power purchase agreements with the state-owned utility.

‘Western Australia has among the best sun, wind, and marine resources in the world — fuel sources that are infinite and free. We should be leading the world in low-carbon energy. This is an important step in that direction,’ Rose said.

She might have pointed to the recent decision by the Nevada electricity commission, which decided to close its two coal fired generators, and focus on renewables as replacements. The decision was based almost entirely around cost.

That question of costs seems to have finally forced the WA government’s hand, but while it continues to prevaricate over renewables, more bizarre proposals are being made by private developers.

Tesla Holdings’s plans for a diesel fuel generator near Albany seem extraordinary. It’s hard to imagine under any scenario how a diesel-fuelled generator could generate electricity cheaper than a solar thermal plant with storage – which would be a much more sensible solution.

According to the Albany Advertiser, Tesla Holdings has plans for the plant in Albany, and a separate 60MW facility near Bunbury.

It is probably taking advantage of WA’s system of capacity payments, which last year caused the construction of an 82MW diesel-fuelled peaking generator near Merredin. Diesel fuel peakers are cheap to build (the 60MW Albany project is priced at $45 million), but very expensive to run.

The capacity payments cover the cost of construction, even though though the plants will rarely, if ever be used – the cost of diesel means it is too expensive to actually switch on.

Maybe Nahan will start to see the light.