By Giles Parkinson on 8 April 2016, excerpts
The conservative West Australian state government has taken the lead over the rest of the country and instructed its state-owned utility to shut down 380MW of fossil fuel capacity in the next two years. It seems certain that much of this will be ageing coal-fired generation.
The Treasurer, Mark Nahan, a former head of the arch-conservative Institute of Public Affairs, praised the role of rooftop solar and the likely benefits of battery storage in helping deliver the reforms announced on Thursday, following a two-year review of the state’s energy markets.
The first decision will be to require Synergy, the state-owned generator and retailer, to shut 380MW of excess capacity
The second decision is to slash the return on so-called demand-side management. DSM, as it is known, offers returns to users who agree to turn down demand when supply is short. It is mostly considered a good thing, but the way it was structured in WA meant that $430 million had been handed out to providers, even though their services has been used for a total of just 106 hours on eight occasions – including testing – in the past decade.
The third decision is to gradually ramp down the scale of “capacity payments”, which saw a fleet of gas-fired or diesel-fired peaking power plants built, but rarely if ever used. Instead they received payments merely for being on standby, and in WA those payments were around $120,000 for each MW of capacity per year.
Nahan said that his measures and the removal of excess capacity would save around $130 million a year over the next seven years.
Nahan, who in his time at the IPA was an avowed skeptic of climate science and renewable energy, was full of praise for the role that solar has taken in “completely revolutionising” the WA energy industry.
On this remarkable web page, “More power to you”, Nahan tells the story of how WA’s energy woes began with uncontrolled blackouts in WA (the fault of a dodgy grid and unreliable gas), and how market “reforms” led to an unsustainable energy market.
Nahan says solar has given the government the tools to repair it