The residents of Collie might not realise it but, tucked away off the main travel route 200km south of Perth, this community is one of the most influential in Western Australia. At the centre of a marginal electorate of the same name, the regional town of less than 7,000 people holds immense power over our energy bills, our state budget; how much we contribute to climate change; and who forms government.
But despite (or perhaps because of) the influence that Collie holds, governments and political parties have become adept at hiding information from Collie people in the belief that they can’t handle the truth. This demonstrates a surprising lack confidence in the very people who have kept our lights on for longer than most people can remember.
Home to the state’s largest coal deposit, Collie has been at the centre of electricity generation ever since the Muja Power Station was connected to Perth via a 132kv trunk line in 1964. Today, two large coal mines feed three large coal-fired power stations at the centre of gravity for the state’s electricity distribution system for the Southwest.
But with the transition to cheap, reliable renewable energy gathering pace and a massive oversupply of electricity on the grid, things are changing in Collie.
Globally depressed coal prices have dashed any hopes of coal export, and the rapid uptake of solar panels on thousands of rooftops across Perth is combining with increasing costs of coal production to put huge financial pressure on the local coal industry. Today, Collie’s coal mines are crippled by huge operational losses, mounting debt and ongoing industrial action. The industry is now dependent on government subsidies and investment which has totalled over $1billion during the past decade.
Meanwhile, unexpected growth in cheap renewable energy, improvements in efficiency and a decade of bungled State Government energy policy has resulted in over 1000MW in excess electricity generation capacity on the Southwest grid. Rather than drive electricity bills down as you might expect, all this extra capacity is costing the state hundreds of millions of dollars to maintain – an unnecessary cost inevitably born by electricity consumers, taxpayers, or both.
Last year state Treasurer and Energy Minister Mike Nahan announced that a program of retirement of up to a fifth of the state’s energy generators would be required to bring the market back into balance. The fear of upsetting voters in Collie (notionally a Liberal seat following the latest redistribution) prevented Nahan from immediately singling out the town’s coal burners for closure before an election. But everybody knows that these facilities – some of the oldest, most polluting and least efficient in the country – will be first in the firing line.
With little in the way of transition planning for the town and its workers (a Collie Transition Taskforce was announced in 2015 but no plan has yet emerged), Collie coal workers and their families have reason for concern. However, Nahan knows he has a bigger problem on his hands. Independent modelling by UWA energy expert Bill Grace shows that those Western Australians who can’t afford solar and remain dependent on the grid could face huge increases in utility bills as the cost of maintaining inefficient and outdated coal on the grid climbs in lock step with the uptake of solar panels. This is a nightmare scenario for energy utilities – dubbed the ‘death spiral’ as the more people who install solar to avoid bills, the faster energy prices rise to cover increasing costs of maintaining fossil generators on the system.
The ongoing saga surrounding Muja – Collie’s oldest power station – is a microcosm of the bigger picture. The 50+ year old Muja A and B units were retired by a Labor government almost a decade ago. Even then the facility was among the most polluting in the country per unit of output. The incoming Barnett Government under Energy Minister Peter Collier then proceeded to spend over $300 million to refurbish the units. However, by the time the work was finished, solar and efficiency had well and truly taken off. Muja now represents a massive ongoing liability in an oversupplied energy grid. But despite the ALP having retired this facility once before, they are studiously avoiding the question of whether they will do it again for fear of scaring the horses in the seat of Collie.
It’s clear that the rising cost to the state budget and to households of keeping Collie workers in coal jobs can’t go on for much longer. As an economic rationalist, Nahan knows all too well that these costs are becoming politically and financially untenable, especially with growing public support for an overhaul of electricity generation, and the out-of-date market arrangements that control it. A recent survey of marginal seats revealed that 85% of undecided voters and 75% across all voting groups support renewable energy as the best means of meeting our state’s energy needs.
The Labor party makes much of its commitment to Collie’s coal workers, but like a cheating partner lying to their spouse, maintaining the illusion that the coal industry can continue is doing much more harm than good for the town of Collie.
The party most likely to form Government in March has an uncomfortable leg either side of a very sharp fence when it comes to the future of energy in WA. While the debate around privatisation dominates the campaign, scratch the surface and the ALP’s policy can be summarised as trying to drive the state’s energy grid into the future while at the same time holding their foot firmly on the brake. The McGowan team has pledged to keep the coal industry chugging along as normal, either oblivious to its mounting cost to the taxpayer and impact on electricity prices, or in denial about it. Shadow Minister Bill Johnson has ruled out a Renewable Energy Target which would provide incentives for private investment in emission free generation – instead, promising to directly invest yet more taxpayer’s funds to build new renewable energy generation in an already oversupplied market.
Perhaps this is the reason the Shadow Minister pulled out with only a few hours notice from a packed public forum last week with Professor Fiona Stanley and hosted by the largest coalition of organisations to call for action on climate change in WA history. Ex-union leader and Member for Fremantle Simone McGurk did an admirable job of stepping in for a Shadow Minister who would rather avoid talking about his embarrassingly uncomfortable policy priorities.
Despite the head-in-the-sand approach to energy policy, there is a positive story emerging for those who are prepared to face the future and tune into the opportunities it presents.
With the right leadership, policy settings, investment and vision, Collie could be a huge winner in the transition to a renewable energy economy. The town has three great assets – a ready workforce, an expensive high-voltage electricity distribution network, and lots of wind and sun.
By combining these assets, Collie could once again become a vibrant centre for energy jobs and generation. A renewable energy manufacturing and installation hub could be established to build large wind and solar farms on the agricultural land surrounding the town. This would place the region at the centre of delivering climate change solutions whilst at the same time creating a massive economic boost for the region.
But this vision will not be achieved if governments continue to prop up the coal industry with taxpayer subsidies and fail to grasp the opportunities that an ambitious Renewable Energy Target could bring. For the people of Collie, for our energy bills, our economy and our climate let’s hope we see some better leadership, and some more confidence in Collie from both political parties while this opportunity still exists.