Western Australia was part of a global megatrend to renewables that would impact the State’s electricity infrastructure and present challenges for the future energy mix, the WA Energy Club has been told.
Speaking at the Club’s April industry dinner, Energy Minister Bill Johnston said the Reserve Capacity Mechanism of the South West Interconnected System was an important foundation of electricity supply and ensured competitively priced electricity in the South West.
“We know we have to adapt it as the energy system changes. We are doing that through the Energy Transition Strategy, and we are continuing to look at what we need to do to adapt the market for the future,” Minister Johnston said.
He said the State, through Synergy, provided 40 per cent of the power in the SWIS, with the remaining 60 per cent coming from the private sector.
“We are investing $3.8b to build 820mw of additional wind and 4400mwh, 110mw of capacity for batteries but that is to meet the Government’s ambition to decarbonise, it’s not about crowding out the private sector,” he said.
“There are still plenty of opportunities for the private sector to invest and take advantage of the opportunities in the SWIS as the private sector decarbonises, whether that’s existing players in the system or the new exciting export opportunities for green hydrogen in the South West.”
Mr Johnston’s comments came ahead of a panel discussion on the State of Renewables in WA, involving Flotation Energy Chief International Officer Tim Sawyer, Frontier Energy Chief Executive Officer Sam Lee Mohan, and Copenhagen Energy Sustainability and Approvals Manager Sarah Watson.
Flotation Energy has plans for two offshore wind farms in Victoria and one in WA, off the coast of Perth; Copenhagen Energy has plans for four offshore wind farms in WA, including one in Commonwealth waters between Mandurah and Bunbury; Frontier Energy is planning a green hydrogen project 120km south of Perth.
Mr Johnston also foreshadowed an announcement related to the North West Interconnected System in the Pilbara.
The NWIS comprises several interconnected electricity networks with different owners. The three largest participants are Horizon Power, Alinta Energy and Rio Tinto.
Large mining companies including Roy Hill, BHP and Fortescue Metals Group also own major energy infrastructure in the NWIS and the broader Pilbara region to service their individual operations.
Mr Johnston said the Government was engaged with all the existing players and the globally significant new players in the Pilbara regarding the NWIS.
“We have been working with them over the past eight or nine months and we are getting close to a decision,” he said. “We hope we can get the support of the private investors in the NWIS to be able to create an important new integrated network to support the decarbonisation agenda.”
During the panel discussion Mr Sawyer urged the Federal Government to move quickly to open an offshore wind zone in WA.
He said the move would attract international interest and investment and could lead to an increase in multinational companies becoming involved in offshore wind in WA.
“They will bring the capital and help develop the new infrastructure (required),” he said.
Ms Watson said determining a date for first power for any of Copenhagen Energy’s projects was difficult without an area being declared.
“There are a lot of variables. We need the certainty of the offshore area to be known. The certainty for all players – government, industry, investors, suppliers – knowing that will help,” Ms Watson said.
Minister Johnston said he had spoken with Federal Climate Change and Energy Minister Chris Bowen on the opening of a zone in WA. While he was not certain, Mr Johnston said another zone was likely to be opened before a WA zone.
He said offshore wind “had a major role to play in WA” and that it avoided extra infrastructure costs.
There was potentially a role in the production of green hydrogen.
Mr Mohan said the two most realistic cases for Frontier Energy’s hydrogen was as feedstock in hard-to-abate sectors such as alumina refining and in flexible power generation.
“Energy transition is extremely difficult,” Mr Mohan said. “You're matching supply and demand, building the right technology at the right time at the right scale.
“And for us, it's all about scale. We've secured 868ha of land and that means we can scale our project… as we justify the infrastructure, and justify the business models, and the supply and demand.”
He said the company was working closely with the Government on issues including connecting to the SWIS and low-cost hydrogen production for power generation.
The panelists said there were opportunities for young professionals looking to build a career in energy transition.
Mr Sawyer said that in the UK, around 420,000 people were employed in the renewable energy industry, with about 7,200 of those in offshore wind.
“There’s a huge opportunity there,” he said. “It clearly comes down to skills and training in appropriate areas.”
Flotation Energy was working to address the skills gaps to ensure the expertise was available in time.
Ms Watson said a lot of young professionals were hesitant about moving into oil and gas.
“Given the huge overlap between offshore oil and gas and offshore wind, it's a great place to start to build whatever skills you need and then keep an eye out for the upskilling that can lead to offshore wind,” she said.
“Also think of trades. There's a big area where not every young professional is going to go through university courses. There's a huge need for the trades such as electricians to work in renewable energy projects.”
Mr Mohan said Bristol Springs expected to employ trainees and apprentices among its stage one workforce.
“These will result in high-paying, high-value jobs. These can be long-term jobs for young engineers, young professionals, young trades, are not looking to move away from regional WA,” he said.
“There are renewable energy… projects that are on a global scale right here, where these skillsets can be really recognised and rewarded in the long-term.”
Thank you to the April Dinner Event Sponsors; Jacobs and Rystad Energy.