Can WA really afford no real energy policy for another 4-year term? See what you could save

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Can WA really afford no real energy policy for another 4 year term?

The unwinnable election allowed the Liberals to promise big but detail little – and Labor to ignore energy policy altogether. But, can WA really afford no real energy policy for another 4-year term?  By March 2025 it is too late to implement policies to meet targets by 2030. 

What are community expectations for 2030? Not everyone expects zero emissions by then, but surely most expect zero coal by then.

In the run up to the election, the Liberals unveiled a visionary plan. I just can’t see the detail on how they meant to achieve it. The plan to retire coal in WA by 2025 is great, but how? This summer our coal power stations have been running at full capacity quite often. Not because they bid a cheaper price than the substantial amount of new wind and solar that has been added to the grid since last summer, but because the renewables were not generating at the time. 

An overview of the figures can be a bit misleading. There is about 5,800MW of generation capacity on the grid. On a peak day, we need about 3,800MW. If we removed the 1,570 MW of coal generation in the grid, we should still have plenty left, if only the renewables were not intermittent. 

By the way, the government is already planning to shut two coal power units at Muja in 2022 and 2024, removing 392MW of coal generation. Energy Minister Bill Johnston’s blueprint released in October 2020 shows the need to remove between 520MW and 890MW by 2025; for economic reasons due to renewable energy hollowing out the market. Interestingly, the reason is economic, not environmental.

What about batteries?

Forget large scale batteries for a simple solution. The costs are unknown, but CSIRO publishes good data, and trying to get a grasp of the levelized cost of batteries is about $180/MWh. The current mix of generation delivers electricity for about $55/MWh. It is not a simple calculation of $180 divided by $55, but the outcome of replacing coal with batteries to fill the holes left when renewables are not generating would increase the cost of our electricity x3 at today’s rates, not reduce it. A more likely solution may be to include a large dose of small batteries in homes and businesses. If the end game is all emissions, not just electricity generation emissions, then electric vehicles need a plug. Perhaps policy should include subsidies or low interest loans for batteries and EV’s.

Liberal energy policy – missed opportunity or pie in the sky?

Reference: Liberals visionary plan to take WA forward with the biggest jobs and renewable energy export project in the nation

Electricity

The Liberal policy around electricity generation and prices has some interesting points. 

  • Build a 1,500 MW solar and wind energy project in the Mid-West to power Perth, the South West, Wheatbelt and Kalgoorlie. 

Source: AEMO, 2019 WEM Electricity Statement of Opportunities, June 2019

For a sense of scale, there is already about 1,400MW of solar generation ‘behind the meter’ ie on roofs at homes and on commercial buildings. The grid already has about 400MW of wind and 1045MW of solar generation. Another 1500MW is not a lot more on the face of it and seems a reasonable target. A fly in the ointment though is that each additional intermittent MW increases the difficulty in managing the grid, so the need to use batteries to smooth and balance the load increases, and batteries are expensive.

  • Cut power bills for households and businesses by partnering with industry to build the Mid-West Energy Hub, which will deliver cheaper, cleaner energy for WA. 

Sounds great, but when the measures in the policy are going to cost more than our current production, but prices are also supposed to come down, then it seems the new Hub might need some new technology akin to the Tardis. 

  • Guarantee fuel security for WA by assisting the economy transition to fuel sources produced in WA. 

An interesting statement, as WA mines its own coal and gas, and is a major exporter of gas. We already have fuel security, although refining our own green hydrogen is exciting.

Other energy sources

The Liberal policy around energy other than electricity is more interesting and a bit harder to shoot holes in.

  • In conjunction with the private sector, construct a further 4500MW of wind and solar energy by 2030 to convert water into over 250,000 tonnes of clean, green and safe hydrogen for export per year and to power a new green steel industry. 

This goes beyond our power bills. A steel industry sounds fantastic, I wonder if we can repurpose any of the Port Hedland briquette plant? However, just exporting green hydrogen to Japan will keep us very busy without refining iron ore. 

It sounds like this ties in with;

  • Mr Kirkup said the project was expected to attract $16 billion worth of public and private capital investment over the coming decade, with a contribution from the State Government of $400 million. 

If $400m can be used to pull in $16b it sounds like good seed. I can’t find a lot more detail on how, but no one can discount the Twiggy factor;

  • “Andrew Forrest, a great Western Australian, has been strong in his support of a move to green hydrogen. Last month he said: ‘The green hydrogen market could generate revenues, at the very least, of $US12 trillion by 2050 – bigger than any industry we have now. … if we get this right, the impact could be nothing short of nation-building’.” 

Without a target, not much seems to get done. The federal Liberals seem very target shy, while the WA Liberal policy is to make State Government zero emissions by 2030. That would send a very clear signal to Canberra.

The rest of the Liberal policy is important and achievable, such as $100m to the Collie Training and Transition Fund to assist transition of workers in the coal industry. Another $50m ensures we have a Zero Emissions Taskforce, $50m for a Critical and Strategic Manufacturing Fund, $100m each for the International Market Diversification Fund and the Industry Attraction Fund. It is important because they all sound like good ideas, and it is achievable because I don’t doubt the ability of any government to spend the budget on Task Forces and Funds.

The Labor policy around electricity, renewables and emissions is harder to comment on in as much as it is rather a lot of insubstantial fluff. 

Labor energy policy – barely there

References: WA Labour Plan for Jobs, ABC News, Your policy guide to the 2021 election

Renewables Industry 

• A McGowan Labor Government recognises the unique position of Western Australia with respect to renewable technologies in light of our coastal location, wide open spaces, sunshine, developed manufacturing and processing facilities and will promote local and overseas investment into renewable technology manufacturing. 

• A McGowan Labor Government will: Encourage research intensive programs into renewable energy and battery technology at our universities which could then be marketed to attract international investment, international students and research and development opportunities. Work with technology companies, universities, TAFE and electricity utilities in a precinct to provide opportunities for emerging battery technologies. Encourage the development of off-the-grid solutions and technologies like smart-meter trials and battery storage trials for greenfield developments around the State.

Premier Mark McGowan unveiled a $259 million green jobs package, centered on the construction of more than 1000 stand-alone power systems including solar panels, battery storage and back-up generators. They will be distributed throughout regional WA, including remote Aboriginal communities, to reduce reliance on diesel generators.

This is not really a policy, or even anything new. The State government must provide services to communities, and essentially anywhere remote either needs a stand-alone power system or a very long extension cord to the grid.  When the cost of running power lines is greater than a stand-alone power system, construct a stand-alone system. Nothing new here, Western Power is already doing it within the grid on an economic basis. Horizon Power has to do it for communities outside the grid.

  • A further $10 million will go towards supporting wind turbine manufacturing. 

That sounds like something new and tangible and not just “recognising the unique position of WA” and “encourage research intensive programs”. With an existing market repairing and maintaining existing aging wind turbines in WA, and new wind farms on the way, further detail and perhaps further funding is in order.

  • 21 million to expand WA’s electric vehicle network and encourage uptake of electric vehicles.

This could be exciting, because it will be Australia’s longest electric vehicle fast-charging network. The impact? There are currently 1,500 electric vehicles in WA, equating to less than one-tenth of one per cent of all passenger vehicles in the state. Ultimately, charging your EV needs to be done at a profit at a service station, by private industry, not the government. What we need is more EV’s. Incentives to buy an EV need to be done by government, such as investment allowances, lower duty and cheaper registration. 

Mr McGowan has sought to contrast his government’s “responsible” plans from those of the Liberals. “This is embracing renewable power and manufacturing in a responsible, achievable and affordable way,” he told reporters. “This is not a wild commitment. This is costed, this is something that can be implemented and it will make a significant difference.”

It is certainly not a wild commitment, and it certainly will not make a significant difference. Rarely has a government with such popular support been given such an opportunity to make a real difference in energy and emissions. 

Final thoughts

What are some of the elephants in the room? 

  • Labor has not defined a target for government emissions or phasing out coal.
  • Solar on the roofs of homes and businesses is huge; 1400MW and growing. It is destabilising the grid and action is needed now to prevent a crash in the next few years. The solution might also be behind the meter; electric vehicles and small-scale batteries. Government stimulus initiatives might include investment allowances and long-term low interest loans.

The price and supply of electricity at home and at work can’t help but be tied to emissions policy; most of our electricity is still supplied by fossil fuels. Talk of retiring coal, building new large-scale batteries and lower electricity prices contradict each other. Not talking about it is also not helpful. We need defined targets and a holistic policy to achieve them. There will be some pain, disruption and higher prices, hardly a popular decision, but something a popular government might be able to pull off.

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