PERTH, Jan 21 (Reuters) – The state government of Western Australia committed on Wednesday to a five-year extension of a subsidy to the private Griffin Coal company, which supplies the private Bluewaters power station.
The state said the extension would help secure power supplies during the transition to cleaner sources of energy, although it planned to shut the state-owned Muja coal station by 2030.
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It has provided A$308 million ($206 million) since 2022 to keep Griffin’s Ewington Mine running. The agreement, set to end this July, will now run until 2031 but state Premier Roger Cook said the subsidy would be “significantly” reduced.
The government will report more detailed costs to the state parliament later in the year.
The state’s Chamber of Minerals and Energy called the decision pragmatic and said coal remained important in the state’s grid, which is not connected to the national power network.
The Australian Energy Market Operator (AEMO) has forecast a small power shortfall in the state of 50 megawatts in the 2025-2026 period in its latest analysis of mid-2025, although longer term the picture is more complex given the uncertainty around closure of large-scale coal- and gas-fired generation. The AEMO report was clear more capacity must be procured before the end of the decade.
Separately on Tuesday, Origin Energy (ORG.AX), opens new tab announced it would extend the life of the 2.8 gigawatt Eraring coal power station in New South Wales by almost two years to balance energy security until more renewables entered the grid.
WA is not part of the main National Electricity Market (NEM) that spans the southern and eastern states and has always used a lower percentage of coal than Australia’s east coast with its abundant thermal coal mines.
However, the renewable energy roll out on both coasts has been slower than expected, while gas-fired generation remains costly and the gas market is tight.
Last year Queensland’s newly elected conservative government vowed to keep coal in the energy mix indefinitely in its energy roadmap.
Australia has a target of 82% renewable energy by 2030. Western Australia, unlike its peers, has no renewable energy target.
Reporting by Helen Clark; Editor Neil Fullick
