One of Australia's biggest energy companies has revealed it wants to build a new gas-fired power plant in Western Australia amid plans to shut most of the state's coal generation by the end of the decade.
Alinta Energy, which has more than a million customers across the country, said extra gas-fired capacity was desperately needed in WA's biggest electricity grid and it wanted the "opportunity" to provide the service.
The comments from the privately owned firm come as speculation grows that WA's state-owned power provider, Synergy, is believed to be working on plans to build its own gas-fired generator.
Jeff Dimery, Alinta's long-serving chief executive, said he would be "disappointed" if the state used Synergy to build a plant that could be funded by the private sector.
Mr Dimery noted that Synergy already had a dominant position in WA's main electricity market, where it owned about 40 per cent of the generation capacity but underwrote a much bigger share.
Warnings of 'entrenched control'
He said allowing Synergy to build any new gas-fired capacity would entrench the utility's control.
"I'd be disappointed if they crowded out our investment and exacerbated their monopoly in the market," Mr Dimery said.
"We would like to be given the opportunity by government to let private industry fill that space, there's no question."
WA Energy Minister Bill Johnston left open the possibility of extra gas-fired capacity, though did not say whether the government had any immediate plans to secure a new plant.
"The state government continues to monitor energy demand requirements and will seek to secure additional gas generation capacity if needed," Mr Johnston said.
Alinta's interest in building a new gas plant comes ahead of plans by the state government to close its two remaining coal-fired generators between 2027 and 2029.
The retirements would remove a major chunk of so-called firm generation capacity from the system and have led to fears about whether enough replacement capacity can be built in time.
Those fears have been heightened by revelations the market operator is also assuming the exit of WA's only privately owned coal plant – Bluewaters – before 2030.
At the time he announced the coal closure plans, Premier Mark McGowan left the door open to new gas plants before 2030 though said none was expected to be built after that time.
Coal closures spur gas demand
In line with the government's position, the Australian Energy Market Operator in December said it expected the demand for gas to generate electricity to more than double between 2023 and 2034.
The AEMO forecast said: "Electricity generation gas demand … is forecast to grow from 127 (terajoules) day in 2023 to 304 TJ/day in 2032, as coal power station retirements are only partially replaced by renewables".
"Since 2021 … the gas generation profile has changed markedly, due to Synergy's announcement of the scheduled closure of all its remaining coal-fired generators within the outlook period."
Last week, the body representing major gas users urged the government to slow the pace at which it retired coal power, warning the gas system would struggle to fill the breach without costly upgrades.
Backing the warning was lobby group Sustainable Energy Now, which said WA would still be reliant on gas power even if it could build enough wind and solar farms to bill most of the void left by coal.
Mr Dimery said Alinta was preparing to "lean into" the replacement of WA's coal with renewable energy, noting it already operated the country's most efficient wind farm in the state.
Gas 'needed' for the transition
The company was investing heavily in new wind and solar capacity across the state, including in the Pilbara, where Alinta is a major energy supplier to mining customers.
Despite this, Mr Dimery believed gas-fired power would be needed in WA's wholesale electricity market for years, if not decades, to keep the system stable.
He said this was because the gas power was dispatchable – meaning its output could be controlled – while it provided flexibility to accommodate the ups and downs of intermittent renewable sources such as solar and wind.
Given Alinta already operated a number of gas plants in WA, he said the company had proved it was capable of providing the service.
It made little sense for taxpayers to pick up the bill for a new plant if private providers were willing to do it, he said.
"At least give us the opportunity before they [Synergy] do it," Mr Dimery said.
"It's different if there's a capital strike or something like that.
"But our view is gas is required for many years to come as a transitional fuel and we're not afraid to look at that.
"The problem we have is around the uncertainty of government policy.
"So how gas will be treated becomes the issue."
Synergy would not be drawn on whether it planned to build its own gas-fired power plant.
However, through a spokeswoman, the state-owned firm said it was constantly looking to "expand and diversify" its generation fleet.
The spokeswoman said Synergy would be given $3 billion under the government's plans to build new and replacement capacity as its coal plants retired.
Among these investments would be 400MW of wind and 1,100MW of battery storage capable of delivering up to 6,600MW/h of electricity.
She pointed out that any new projects — regardless of the technology used — would need to account for a range of considerations.
"Synergy is a future-focused organisation and will continue to explore opportunities to expand and diversify our fleet of generation assets," the spokeswoman said.
"There's a variety of considerations when exploring possible future asset site locations including but not limited to, optimal network connectivity, land availability, environmental considerations and impact to neighbouring industry and residents."
