Taxpayers left with big bill as power plant closes
Taxpayers will wear tens of millions of dollars in losses on the botched refurbishment of the Muja AB power station after the State Government decided to close the ageing coal-fired plant.
Energy Minister Ben Wyatt confirmed yesterday the 52-year-old power station in Collie would be shut in September next year as part of moves to retire more than 400MW of generating capacity owned by Synergy.
The decision, which Mr Wyatt blamed on the former Barnett government, turns the page on a tortuous chapter that has left taxpayers and energy consumers on the hook for huge losses.
Mr Wyatt described the refurbishment as “one of the former Liberal-National government’s biggest debacles” and revealed it would be investigated as part of Labor’s commission of inquiry.
Its closure, with the loss of 19 jobs, will be presaged by similar moves to close several ageing gas-fired generators.
Those are the three units at Mungarra near Geraldton, West Kalgoorlie’s two turbines and a single generator at Kwinana.
All up, the decision will retire 436MW of State-owned Synergy’s generating capacity — or almost 20 per cent.
The Government will introduce a new generation cap of 2275MW, excluding renewable energy projects, to encourage greater involvement by the private sector in WA’s energy market. First budgeted at $150 million and designed to be financed entirely by the private sector, the revival of Muja AB was beset by repeated blowouts in its cost and time frame.
The final cost was put at $310 million while it was delivered 18 months late after a corroded boiler exploded and the joint venture between Synergy and Geelong-based engineering firm Kemp went broke.
Since being completed, Muja AB has been plagued by operational and reliability problems, producing just 20 per cent of the time on average.
Mr Wyatt, who visited Collie yesterday to deliver the news to workers at Muja AB, labelled the decision to refurbish the plant as a “shocker” but he could not put a figure on the total loss to the State.
He said commercial considerations had driven the closures, while stressing they would not risk the security of supply.
“It was in hindsight a very poor decision and it is a cost that is being carried by the bills of Synergy customers,” he said.
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