W Australia may need more gas plants over next 10 years

More gas plants will be required in Western Australia (WA) during the next 10 years under the high electricity demand scenarios outlined in the state government's long-term power strategy released this week. The state's gas demand has an impact on the five LNG projects in WA, which is the only state that imposes a gas reservation on LNG producers.

Gas for power generation in WA accounts for around 20pc of daily gas demand in the state and for about 52pc of installed large-scale power generation in 2020, according to the Whole of System Plan released by the Energy Transformation Taskforce, which is part of the WA energy department.

Gas accounted for 44pc of power generated in the 2019-20 fiscal year to 30 June, while coal-fired plants accounted for 26pc of installed large-scale power generation and 44pc of the power generated in 2019-20, the WA government report said. Coal's share of power generation has declined over the past 10 years from 51pc in 2009-10, the report said.

Renewable generation comprises 2,494MW or 34pc of installed capacity in WA, of which rooftop photovoltaic (PV) makes up more than half or 1,291MW, according to the Whole of System Plan.

The report modelled four demand scenarios — castaway, which has muted economic growth; groundhog day, where distributed energy resources thrive but reliance on the network remains high; techtopia, where technological change flattens the increasing energy demand profile; and double bubble, where an ongoing strong economy results in the largest growth in demand.

In all four scenarios, rooftop PV uptake is assumed to continue to increase but at differing levels. Under the lower-demand castaway and groundhog day scenarios, little additional generation capacity is required before 2030 as there is more than enough rooftop PV and existing large-scale generation in the system to meet demand, the report said.

No new thermal generation capacity is required under the lower-demand scenarios, but between 667MW and 867MW of new gas-fired generation is required in the higher-demand techtopia and double bubble scenarios by 2030, the report said.

Under the techtopia scenario, 667MW of flexible gas capacity is connected by 2030 to meet demand and provide firming power for renewable energy, and there is no economic exit of coal-fired generation, it said. Under the double bubble scenario, operational demand is large and additional renewable and gas-fired capacity is required immediately, it said.

No additional gas-fired generation capacity is required under the lower-demand scenarios because there is already more than 3,000MW of gas and co-generation facilities in the South West Interconnected System, the report said.

Fast-starting gas generation tends to be flexible and better suited to firming or peaking generation than coal-fired generation, it said. As operational demand falls and coal becomes less economic to run, gas-fired generation is used more often to balance the intermittency of renewables and the fast ramp-ups required when wind or solar drops out, the report said.

There will be a retirement of 600MW of gas-fired capacity post-2030 following the end of the technical life of open-cycle gas turbine plants in 2031 and 2036, the report said.

WA has a gas reservation that requires LNG exporters to reserve 15pc of exported gas volumes for domestic use. The reservation has been in place since 2006. The five LNG plants in WA include the 16.3mn t/yr North West Shelf LNG and 4.3mn t/yr Pluto LNG ventures — which are operated by Australian independent Woodside Petroleum — and the 15.6mn t/yr Gorgon LNG and 8.9mn t/yr Wheatstone LNG plants, which are operated by Chevron.

By Kevin Morrison