A WA Government study sees surging rooftop solar and maybe some wind farms bringing cleaner energy to South-West WA, but emissions reductions are a long way from the State's aspiration of net-zero emissions by 2050.
The Whole of System Plan for the South West Interconnected System released yesterday predicts that more than 70 per cent of generation capacity will be renewable energy by 2040.
The Plan launched yesterday by Energy Minister Bill Johnston considered four scenarios for operational demand: the power supplied by the network that excludes rooftop solar.
In two cases, operational demand dropped as growth in rooftop solar generation exceeded growth in total demand. Operational demand more than doubled over the next two decades in the other scenarios.
The work by the Energy Transformation Taskforce determined the lowest cost generation for all scenarios, which was always wind when the system needed additional generation.
Wind farms between Mandurah and Manjimup were favoured instead of the Mid-West where most are now located. The South-West has spare transmission capacity and gives the power system more diversity to lessen peaks and troughs in wind production.
Little additional wind generation is required this decade under the two low demand scenarios.
The only mention of climate change in the 126-page Plan was to exclude its consideration: "As there is no explicit climate or emissions reduction policy targeting the electricity sector, no State or Federal target or carbon price has been included in the modelling."
The State Government's Plan ignored its own "aspiration of net-zero (emissions) by 2050" released in 2019.
South-West power generation is the source of emissions the WA Government has the most influence over due to its ownership of the Western Power grid and the dominant generator Synergy.
Many non-government owners of emissions-intensive facilities in WA assume a carbon price when making investment decisions as a proxy for likely action to rein in Australia's emissions. Woodside uses $US80 ($112) a tonne of CO2.
Energy Minister Bill Johnston said the exclusion of a carbon price from the Plan's assumptions was "a political question."
"If the Federal Government set a price on carbon then it would be very easy to adjust the modelling," Johnston said.
"Every businessman I've ever talked to since I became shadow minister for energy in 2012 has said they personally support a price on carbon,
"But currently nobody's industry lobby group supports putting a price on carbon."
The emissions intensity of South-West power more than halved by 2040 in all scenarios. The intensity dropped the most under the two growth scenarios as there was greater opportunity for new cleaner generation to enter the market. However, total emissions grew under both growth cases.
Questions over Collie coal
Energy Transformation Taskforce independent chair Stephen Edwell said the outlook for coal was "perhaps more bleak then some might have expected."
Collie's coal-fired power stations were designed for constant output but must cycle down during the day when rooftop solar generation peaks.
Synergy's proposed battery at Kwinana would lessen the ramping that is increasing maintenance costs.
"Coal will come under increasing economic pressure over the coming decade," Edwell said.
The State Government decided last year to close two units of Synergy's Muja Power Station in 2022 and 2024.
Edwell said under the two low demand scenarios additional coal capacity was predicted to be uncompetitive by 2025: 130 MW in the Groundhog Day scenario and 500 MW under the Cast Away assumptions.
Edwell said while the Plan predicted coal would not be cost-competitive, whether the plants close is a matter for the owners who would consider a range of issues.
These could include ongoing coal purchase and power sale agreements and decommissioning liabilities.
The application of, by international standards, a modest carbon price such as the $15.74 a tonne averaged at an Emissions Reduction Fund auction in September, would further hurt the competitiveness of coal-fired power in WA.
Collie's power stations emit about 0.9 tonnes of CO2 for each megawatt-hour of power produced. A carbon cost of $14.66 a MWhr in a market with an average cost of about $58 a MWhr would accelerate the closure of coal and increase demand for renewable energy projects.
Most gas-fired generators on the SWIS have an emissions intensity of about 0.55 tonnes of CO2 a MWhr.
Boiling Cold asked Johnston when people in Collie would receive guidance on their future beyond the already-announced closures at Muja.
"We've made our decisions at this stage and if we need to make further decisions, we will," Johnston said.
"One of the criticisms of the Government's Whole of System Plan by some lobby groups is that we're allowing coal to go on forever,"
"So, the people of Collie can be confident that in a Labor Government they've got friends."
Keeping the lights on
Reliability is a crucial aspect of the power system, as well as cost and emissions.
Johnston said when he was Labor State secretary, he would tell then energy minister Eric Ripper "if the lights go out it's the Minister's fault."
"So, I'm determined to make sure, despite the 10th of January, that the lights don't go out."
The SWIS lost almost 500 megawatts of generation within four minutes on the evening on January 10, 2020, leaving nearly 100,000 customers in the dark, some up to four hours.
Johnston said the South-West power sector needed strategic leadership from the Government beyond the life of the Energy Transformation Taskforce.
"We'll need to continue to coordinate and carefully manage the system here in WA to make sure we can deliver the cleaner, reliable, affordable energy supply that all West Australians demand," Johnston said.
Responsibility for updates to the Whole of System Plan will rest with the Coordinator of Energy, a position currently filled by the director of Energy Policy WA Kate Ryan.
The Coordinator will also assume the responsibilities of the Economic Regulation Authority's rule change panel.