WA says it’s done pouring millions into failed coal mine, but can it build enough renewables?

The urgent need to build more renewables in Western Australia and its main standalone grid was underscored in state parliament this week, after it was confirmed that no further government lifelines would be extended to the troubled Griffin coal mine.

The WA Labor government agreed to prop up Griffin coal – one of two remaining coal mines in the state – in 2023, with a $220 million package aimed at keeping it in operation until mid-2026 to provide fuel to the state’s few remaining coal generators.

WA premier Roger Cook told a budget estimates hearing that with a separate $39.3 million also allocated in 2023, and an additional $49 million committed in the 2025-26 state budget, the government has committed a total of $308 million to support Griffin Coal to June 2026 – and will not be paying anything more.

“We have made it quite clear that the government will not be on the hook beyond 30 June 2026,” Cook told the hearing on Thursdsay.

“If the related parties reach a commercial decision on how the Griffin mine and Bluewaters power station function, we will consider any proposals from that point, but we have made it quite clear that we will not be funding the arrangements beyond 30 June 2026.

“We just want the parties to sort themselves out so that they can get on and mine coal at a commercial rate and people can produce power at a commercial rate,” the premier added. “Quite frankly, the fact that the parties have not been able to come to an agreement is a disgrace.”

The financial viability of the Griffin coal mine has been under doubt for more than a decade, with a report from IEEFA in 2014 warning that it was at “serious risk of becoming a stranded investment with potential negative impacts on investors, Western Australian taxpayers and the local community of Collie.”

“Griffin Coal continues to operate at below gross cashflow breakeven, such that it is struggling to pay for equipment maintenance and the interest let alone have scope to repay the capital on $A600-800 million of debts outstanding against the local Australian entity,” energy analyst Tim Buckley wrote at the time. 

The mine was placed in receivership in 2022 as a result of a series of commercial disputes, and supplies to the privately owned Bluewaters coal generator, which comprises two 217 MW units. This week, the WA parliament heard the company’s debts have now reached $2.4 billion. 

In 2022, Cook had also criticised the inability of private coal companies to find a commercial solution to their problems, but also promised that he would not allow the “sudden closure” of the mine, to protect jobs and the stability of the state’s grid.

Three years later – and with the commitment to quit coal generation entirely by 2030 rapidly approaching – the pressure is mounting to build enough large-scale solar, wind and energy storage to remove coal from the equation.

As Renew Economy’s Giles Parkinson explains here, WA’s main network, the South-West Interconnected System (SWIS), is the world’s biggest isolated grid, with no connections to other states or countries, and has a unique challenge in negotiating the closure of coal and integrating high levels of wind and solar.

According to the latest annual forecasting document from the Australian Energy Market Operator (AEMO), the biggest challenges for the state will emerge over the next five to 10 years, with the retirement of more than 1.75 gigawatts of ageing coal and gas fired generation from 2027 to 2032.

“The expected connection of more than 1,000 MW of battery storage by 2026-27 will provide the ability to meet fast increases and decreases in demand and also help address declining minimum demand,” the AEMO report says.

But the market operator has put out a call for urgent investment in six-hour batteries, as well as more wind and solar and transmission to transport it.

The Cook government’s 2025-26 state budget lists a $584 million investment in stage 2 of Western Power’s Clean Energy Link North and Regans Ford terminal projects, which it says will unlock wind generation north of Perth.

The downpayment on the renewables expansing transmission project was billed by the government as part of a $13 billion budget allocation to “significant growth in water and energy infrastructure, delivering on our commitment to become a renewable energy powerhouse.”

According to a Budget Overview, another $50 million has been put towards supporting local battery manufacturing, for grants and low interest loans to support locally produced residential and industrial batteries.

Further, as Renew Economy reports here, $25 million is being set aside to drive the local manufacture and supply of poles and wires needed to deliver the state’s renewable energy transition.