Western Australia introduces Renewable Energy Mechanism to reach 75 per cent target
Summary and headline written by AI from the source article. How we work
The Western Australia government is launching a Renewable Energy Mechanism to support a target of 75 per cent renewable energy by the 2030/31 period.
This plan aims to replace coal power as the state moves away from traditional fossil fuel generation. The government intends to use a simplified version of the Electricity Services Entry Mechanism to provide revenue certainty for new wind and solar projects.
Jai Thomas, the coordinator of energy in Western Australia, explained that the mechanism will provide annual payments to renewable energy providers if market prices fall below the cost of making a facility viable. This system addresses a paradox where large retailers are hesitant to sign contracts with new renewable projects because underwriting costs often exceed forecasted energy prices. Current projects, including the 550 MW Marri wind project, have largely been funded by state utilities such as Synergy and Water Corp.
These efforts are expected to bring the state to around 60 per cent renewables by late 2027 when the Collie coal fired power station closes. However, the government needs an additional 4,000 MW of new capacity to reach its 75 per cent goal and cover the scheduled closures of the Muja and Bluewaters coal generators. The new mechanism will also fix the Reserve Capacity Price for up to 15 years for projects entering the Western Australian market.
Premier Roger Cook stated that the plan is part of an affordable energy strategy to diversify the economy and create jobs. While the state pushes for renewables, some observers have raised concerns regarding the development of the 870 MW Keralup energy hub, which could become a major gas generator.
