Western Australia to close Muja coal units – to lower power bills, stabilise grid

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W.A. announces staged retirement of Muja C generator, saying it is “no longer viable” to keep the costly and unreliable coal units operating.

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The Western Australian government has set a date for the closure of another two units of the state’s ageing coal fired Muja Power Station – a long-awaited move it says should save the state $350 million, drive down electricity costs and boost the stability of the grid.

The Labor McGowan government said on Tuesday that the staged retirement of Muja’s C units would commence in October 2022, because it was “no longer viable” to keep them operating.

The government said demand for the kind of coal-fired baseload power generated by the 40 year-old plant, which is operated by state-owned company Synergy, was in decline, and was being undercut by the boom in residential rooftop solar on the South West Interconnected System.

On top of that, the high operating costs of Muja C, and increased maintenance due to the additional cycling of the plant – it is only being used around 35 per cent of the time – would force power prices up if it remained open.

In dollar terms, the government estimates that keeping the two units operating at Muja C any longer than the selected dates would add “at least $350 million” to the state’s power bill – a cost borne by every taxpayer in the state.

“It no longer makes sense to keep the Muja C units operational,” Premier Mark McGowan said in a statement. “They are expensive to run, and demand for electricity from the units is declining dramatically.

“Keeping them open will lead to higher power bills for Western Australians and put our stable electricity supply at risk.”

The retirement of Muja C follows the closure in 2018 of what were the four oldest of the power station’s units – Muja AB – not long after they were controversially upgraded at a cost of more than $300 million under the previous Coalition government.

The two Muja D units, Collie Power Station and Bluewaters will continue to operate – but how long for was not directly addressed in the statement.

However, with the pipeline of large-scale renewables in development in Western Australia and the aforementioned collective rooftop solar capacity, it may not be much longer than Muja C.

The government is currently running two different inquiries looking at how it can plan for a grid beyond coal. It is almost a direct contrast to the situation on the eastern states, where the federal government insists even ageing coal plants remain on line, despite their growing vulnerability, and refuses to look to future technologies.

As Giles Parkinson reported here, AEMO predicts that rooftop solar in W.A. will more than double again over the next 10 years to around 2,500MW, and could even triple to around 3,500MW. Most analysts and observers – noting the current rates of installation – favour the latter prediction.

AEMO’s general manager in the state, Cameron Parrotte, has described what is happening in the state as a “paradigm shift,” causing authorities to rethink the way they manage the grid. And wherever that rethink leads, there will be little room for ageing, polluting coal plant.

Not everyone is convinced of this, of course, and for the locals of Collie, the idea of life without coal will take some getting used to – and a good deal of policy planning and support.

Just recently, the state government shied away from plans to develop renewable generation facilities in Collie, and instead divert the $60 million earmarked for major biomass and solar projects to a new Industry Attraction and Development Fund, instead.

The fund would be made available for large-scale initiatives that promoted economic diversity, job creation and sustainability in Collie – but not renewables. Not yet.

“(We) understand that this is a significant issue for workers and the Collie community, and they deserve our support and certainty going forward,” McGowan added in his statement on Tuesday.

“We will be working closely with Synergy to ensure all workers impacted by the closure will be supported and options are available, depending on their individual needs and future plans.

“My Government is working hard to create a prosperous future for Collie to diversify the economy and provide new industries for the town, going forward.

“We are absolutely committed to Collie’s future having already announced a series of projects to diversify the local economy and create new long-term jobs for local workers. More announcements will be made soon.”

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