Synergy to reduce electricity generation cap by 2018

Western Australia's largest electricity provider, Synergy, has formalised its plans to reduce its non-renewable generation capacity to address over supply in the market.
  • Synergy will close more than 380MW of existing generation assets by September 2018

  • Synergy's generation cap to reduce to 2,275MW in total, excluding renewable plant

Western Australia's largest electricity provider, Synergy, has formalised its plans to reduce its non-renewable generation capacity to address over supply in the market.

The plans to reduce generation capacity were announced by the previous government in April 2016 and represent the final chapter of one of the former Liberal National Government's biggest debacles - the refurbishment of Collie's Muja power station.

Premier Mark McGowan has indicated the Muja debacle will be investigated as part of the Government's Commission of Inquiry.

Energy Minister Ben Wyatt said the Synergy board had made the decision to reduce generation capacity based on a number of critical factors. These include minimising the impact to supply reliability and security in the South West Interconnected System (SWIS), optimising the commercial outcomes for the State and limiting the impact on jobs.

The assets designated for retirement are:

  • Muja AB units 1 to 4 (240MW)

  • Mungarra gas turbine units 1, 2 and 3 (113MW)

  • West Kalgoorlie gas turbine units 2 and 3 (62MW)

  • Kwinana gas turbine unit 1 (21MW)

Synergy will progressively retire the four assets by September 2018, whereby its generation cap, exclusive of renewable generation, will reduce to 2,275MW.  A total of 24 positions across the generation arm of the business will be impacted.  Some of those are currently vacant and Synergy will run a voluntary redundancy program to account for the remaining 19 positions.

Discussions have been undertaken between Synergy, the Australian Energy Market Operator (AEMO) and Western Power to finalise the decision to ensure the SWIS does not experience supply issues.

Comments attributed to Energy Minister Ben Wyatt:

 

"My focus has been to address this issue, which we inherited from the previous government, as quickly as possible.

"I am confident the Synergy board has made the decision to retire four existing units to comply with the direction, including the Muja AB units of the Muja Power Station, based on what is in the best interests of the State.

"The retirement of the refurbished Muja AB units is evidence of the waste and lack of strategic planning by the previous Liberal National Government.

"In 2014, the then Energy Minister Mike Nahan declared the $300 million Muja AB refurbishment was the right decision, but less than three years later he issued a directive that will result in the plant's closure.

"This is certainly not the end for thermal or gas-fired generation which remains critical sources of base-load generation.  There is a need for a balanced mix of energy generation sources and the State Government is working with industry to transition generation in WA which will be undertaken responsibly.

"The McGowan Labor Government remains committed to working with industry and the impacted communities to diversify the local economy and support the growth of jobs.

"I have personally visited and seen the important work that goes into electricity generation at some of Synergy's sites and will be working closely with them to ensure local communities are supported during this transition."

Minister's office - 6552 5900