WA to close Muja coal units, in first signs of major shift to renewables

When the then WA Coalition energy minister Peter Collier opened Australia’s first large scale solar farm – the 10MW Greenough River project near Geraldton – in 2012, he said (quite outrageously) that he hoped he didn’t see another solar plant in the state.

For five years, his wish has come true. But as the new Labor government announces the belated closure of the Muja AB coal fired power station units – scandalously upgraded at a cost of more than $300 million under that Coalition government – the state will find itself with no choice but to turn to wind and solar.

The closure, announced by current Labor energy minister Ben Wyatt on Thursday, was foreshadowed more than a year ago, when the former state energy minister Mike Nahan instructed WA’s state-owned utility, Synergy, to shut down 380MW of fossil fuel capacity over the next two years.

The now 52 year-old 240MW Muja A and B units at Collie were an obvious target of the mandate, particularly as it had become a glaring symbol of the state’s disastrous fossil fuel re-investments.

As noted above, a 2009 decision by the then Barnett government to refurbish the plant blew out by $308 million, due to a botched joint-venture deal and corrosion problems.

Then, in November 2015, the wall of the 30-year-old Unit 7 tower attached to the Muja CD plant collapsed, prompting calls for a major safety audit of the Synergy-operated facility, and pushing costs out a further $4 million.

But as the state’s taxpayers count the cost, the McGowan government will need to get busy with the task of attracting investment in renewables into the state.

And this will be no small task. The latest data from the Clean Energy Council shows how little development there has been in renewables in Western Australia since the landmark Greenough River plant – in fact only a handful of projects.

While other states like Queensland and New South Wales have between 963MW (Qld) and 1017MW (NSW) of large-scale renewable energy projects under construction, or slated to begin construction in 2017, WA has just 20MW, according to Wednesday’s CEC report.

But there is no shortage of potential for solar and wind in the state, with AEMO suggesting WA will have one of strongest take-ups of renewables, particularly in large-scale and rooftop solar.

Already, rooftop solar is going off in the state. According to recent analysis from the Australian Photovoltaic Institute, using data from the Clean Energy Regulator, suburbs in Western Australia are among the leaders, nationally, where solar houses outnumber households without rooftop PV. The semi-rural area of Baldivis, for example, which is about 50km south of Perth’s CBD, has a remarkable 69 per cent solar homes.

All eyes will now be on the recently elected McGowan government, which came into power promising a push to renewables – and in particular, proposing that biomass generation and large-scale solar be developed in Collie, and committing $100,000 to a pre-feasibility study for pumped hydro, also in Collie – but fell short of committing to a renewable energy target, as other state Labor governments have done.

They also have to figure out what to do with the massive subsidy to consumers that has been built up over years of governments underwriting fossil fuel generation, and which means that today, government still pays one third of the cost of delivery.

As RenewEconomy reported in 2014, a discussion paper prepared at that time by the Electricity Market Review found that more than $1 billion had been spent on the state’s controversial capacity mechanism, much of which was directed to fossil fuel plants that have never been switched on.

This drove up power prices to the highest in the country, and in 2013 the government had to pay $600 million to subsidise the cost of electricity to consumers, a cost that was expected to total more than $2.5 billion over the coming four years.