WA gas supply more robust a decade after Varanus explosion

This story was originally published in The West Australian on 4 June 2018 with the headline "Gas still has role to play in energy supplies." © Peter Milne.

A decade after fire seriously threatened WA’s power grid, Peter Milne asks what has changed to make it more reliable

Nuclear energy, coal, renewables and a link to the Eastern States power grid were among the suggestions thrown around on the day after the fire at the Varanus Island gas plant was extinguished 10 years ago.

Having gone to the precipice, West Australians were keen to avoid a repeat of the chaos in the State’s energy supply that saw industry shut down and blackouts threatened.

A decade on, these ideas have either been discarded, implemented to make today’s energy supply more robust or still wait in the wings.

Nuclear energy, more coal-fired power stations and renewable energy all offered the possibility of lessening the State’s reliance on gas to generate electricity.

Nuclear power went nowhere. Labor was totally opposed. Colin Barnett, who became premier months after the explosion, supported the technology but thought the WA market and grid were too small to handle such a large power source.

More coal-fired power was already under construction when Varanus blew in 2008. Griffin Energy’s 400MW Bluewaters power station came online the next year.

In the aftermath of the explosion, Alan Carpenter’s Labor government decided to spend between $3 million and $4 million to temporarily restart the 40-year-old State-owned Muja AB power station that had been decommissioned in 2007.

The next year the new Liberal government went a step further, with a $100 million plan to refurbish the 240MW station to generate power for the long term. However, the increase in coal-fired capacity did not lead to a successful decade for coal power or its investors.

The refurbishment of Muja AB eventually cost the State government over $300 million, was 18 months late and generated electricity for just 20 per cent of the time. It is now closed.

Ten years on from the Varanus Island explosion, the State’s power is less dependent on gas. Last month, gas generated 40 per cent of the power in the WA wholesale electricity market, down from 45 per cent in May 2008.

The biggest change, according to data from the Australian Energy Market Operator, is that wind generated 10 per cent of the electricity last month, compared with 3 per cent a decade ago.

The most significant source of renewable electricity in WA, rooftop solar, is not reflected in the data as it sits behind the meter.

WA has a more robust gas supply system than a decade ago. Then there were only two significant gas producers, Woodside’s North West Shelf and Apache’s Varanus Island that sent gas south through a single pipeline and no gas could be stored for emergencies.

Apache started up the Devil Creek in 2011 and BHP opened the Macedon gas plant in 2013. Chevron’s Gorgon project began sending gas from Barrow Island to the mainland in 2016 and the US company expects Wheatstone to start deliveries this year.

Gas from all these projects arrives in Perth via the Dampier-to-Bunbury gas pipeline.

The State’s reliance on this single pipeline has long been a source of concern.

But the pipeline has been expanded by installing additional parallel pipelines, or loops, between the compressor stations.

It also allows gas to keep flowing if one pipeline is out of action.

WA is now less reliant on gas and, more importantly, the supply is more reliable.

However, ideas from 10 years ago to connect the State to the east have gone nowhere.

Importing LNG into the South West would have reduced WA’s reliance on gas but was dismissed because of the high cost of a re-gasification plant to receive the shipments.

Now the only LNG import terminals proposed for Australia are on the east coast.

These may now be viable due to cheaper floating re-gasification facilities and the soaring cost of gas in the east as the Queensland LNG projects force a link to international gas prices.

Connecting WA’s electricity grid to the east was thought unlikely because the common technology of the day, overhead alternating current transmission wires, would have massive energy losses along the route.

Now high voltage direct current cables, which lose far less energy, are proven technology. One proposal for an east-west connection, however, involves exporting solar energy from the Pilbara, not connecting the south-west grid to the east.

Ten years on from Varanus, WA still has isolated gas and electricity networks but at least the vital gas supply is a lot more reliable.