Western Australia election debates energy transition

Western Australia (WA), the country's most resource-rich state, goes to the polls tomorrow with the ruling Labor party heavily favoured to win.

WA effectively cut itself off from the east Australia states to combat the Covid-19 pandemic. It had one of the lowest infection and death rates in the country, which is expected to help return Labor premier Mark McGowen for a second term.

Both Labor and the opposition Liberal party in WA are pledging similar policies for the resources and energy sectors, given that royalties from iron ore production are expected to deliver a record A$10.73bn ($8.34bn) in the current 2020-21 fiscal year to 30 June with increased exports and higher prices following firm Chinese demand and supply disruptions from Brazil. Iron ore royalties are forecast to account for almost 15pc of total government revenues in 2020-21.

Neither political party is planning any further taxes on the iron ore sector, unlike the previous election when the National party proposed a new iron ore levy.

Australia exports more than 95pc of its iron ore and has a modest domestic steel production sector, with all of the steel plants located on the east coast.

The Labour and Liberal parties are pledging funds for research into developing steel production using hydrogen that is produced from renewable sources. This concept of green steel is also promoted by Australian mining entrepreneur Andrew Forrest, who is the major shareholder in Australian iron ore producer Fortescue Metals. WA has long sought to build a steel plant given it sits on some of the world's richest reserves of iron ore.

Also being considered are battery production plants, wind turbines and blade production facilities, as WA sees itself as an emerging renewables energy hub. Its vast area is able to host large-scale solar and wind power farms to power hydrogen and ammonia plants, which can fuel a domestic manufacturing industry, as well as supplying ammonia and hydrogen to Asian markets.

Both WA parties are also committed to a net-zero emissions target for the state by 2050. The Liberal party is targeting all state-owned assets to reach net-zero emissions by 2030, which includes the closure of all state-owned coal-fired power stations by 2025. State-owned utility Synergy owns the 1,094MW Muja and 340MW Collie power stations, which both source thermal coal from the Collie basin south of the state capital Perth.

The coal-fired plants will be largely replaced by renewable energy. The Liberal party proposes building a 1,500MW solar and wind energy project in the Mid West region to power Perth, the southwest wheat belt and the mining town of Kalgoorlie. It also plans to provide financing for a further 4,500MW of wind and solar generation capacity by 2030 to convert water to 250,000 t/yr of hydrogen for export and to power a green steel industry.

Australian federal politics are a stark contrast, with the ruling Liberal-National coalition at pains to slow any transition to a lower emissions-intensive economy. It has no policies to encourage a rapid take-up of electric vehicles, neither is there a manufacturing policy built around renewable energy. The opposition Labor party has rolled back its ambitions after losing three federal elections with pledges of deeper emissions cuts and aligned itself more with the government.

By Kevin Morrison