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Coal’s (not so) long goodbye

On 12 June Premier Mark McGowan announced plans to retire state-owned coal generation, which has formed the historic bedrock of the WA energy system, by 2030. This in turn enabled the State to announce an ambitious WA Government emissions reduction target of 80 per cent below 2020 levels to be achieved by 2030.

The Western Australian energy market remains both stable and relatively affordable – while also becoming less emissions-intensive. This most recent announcement highlights the benefits of being able to plan the clean energy transition over time. 

Western Australia is now well on track to potentially become the first carbon neutral energy market in Australia. This presents  WA government and business with multiple challenges – but also significant opportunities.

The demise of coal fired power is not purely about climate concerns. Perhaps more critically, the rapid shifts in the economics of baseload energy are driving change. 

Intermittent renewables have been pricing out daytime baseload generation for years and even the ‘coal warriors’ in the previous Federal government knew that a future for coal fired power would depend on increasing subsidies. While economics has sealed the fate of base load coal fired power generation, its absence from the supply matrix will be difficult to fill. 

The electorate has made its desire for climate action clear. However, it will remain a serious career limiting move for a politician to allow the lights to go out in family homes. This will be front of mind for Premier McGowan and Energy Minister Bill Johnston. 

Minister Johnston has spent years scoping the challenges and engaging with industry on solutions. He knows the transition is achievable – but not simple or easy. Geographic diversity of renewable generation, supported by strengthened networks and significant energy storage will be required to keep the system green, stable and affordable. 

Gas generation that reacts quickly to demand will be part of the mix. Batteries can supply backup capacity storage and stability, and are increasing in useable capacity, but will not meet all the State’s needs in the next seven years.

Hydrogen will also be part of the solution, with the State seeking to progress a Renewable Hydrogen Target on the electricity network but this is likely to be a relatively small component in the short to medium term.

These challenges are surely why Minister Johnston is talking about pumped hydro to provide, reliable, large scale and long duration energy storage for WA. 

The provision of new energy storage is a significant opportunity for innovative business. However, companies should also be mindful of the Government’s desire to see the Collie community prosper through this energy transition.

The Collie region and its people have been meeting the State’s energy needs for the last century. Collie families have for generations provided the rocksteady energy base that supports Western Australian industry and households.

So what happens now in the Collie region? 

A successful transition will require finding new opportunities, while being respectful and inclusive of the local community. The town has a strong union history and generational family links to coal mining and power generation. 

The transition away from coal fired power generation is a multilayered complex project – and a fantastic opportunity for WA business.

Any business seeking to be part of this transition should develop comprehensive community and government engagement plans, and carefully map their engagement approach. To ignore the community, or to seek to dictate rather than engage, will be disastrous. Collie is an organised community with institutional strength and a history of strong leadership – they will want genuine engagement and outcomes – not political or corporate spin.

The McGowan Government has committed to employment transition for the Collie region, and investment support will be available for new industry. Companies seeking to be involved will need to meet engineering and technical requirements – but this is just table stakes. 

Companies that can provide energy storage solutions, and that can genuinely engage with government and the Collie community, will be well placed to drive business value -while delivering a massive social and environmental dividend.

Matt Keogh is a Director at Corporate Affairs Australia and one of WA’s most experienced corporate affairs professionals. He served as Principal Policy Officer to Premier Alan Carpenter, and as Chief of Staff to the Hon Alannah MacTiernan. Matt has worked in community engagement for BHP and Woodside and held senior corporate affairs roles with Horizon Power and Jemena.