Coal contract controversy

The State Government has been urged to release the details of Muja Power Station's coal contracts following the recent announcement that the station's Stage C Units would close.

Liberal Member for the South West Steve Thomas called on the State Government to confirm the details of its agreement with Premier Coal.

Closing Coal: Premier Mark McGowan with Synergy chief executive officer Jason Waters at the closure announcement this month. Picture: Taylar Amonini.

Closing Coal: Premier Mark McGowan with Synergy chief executive officer Jason Waters at the closure announcement this month. Picture: Taylar Amonini.

"In April this year, more than three months before Labor Premier Mark McGowan announced the timeframe for the closure of those Muja units, the Shire of Collie put out a media release telling us all that, in a briefing, Premier Coal had told the council that the state's coal supply contract contained a minimum take of 2.8 million tonnes" he said.

"With the announcement last week of the impending shut down of half of Muja's capacity, the local community deserves to know the impacts - exactly how much less coal will Synergy be buying from Premier Coal after October 2022, and how much less again after October 2024?"

According to the Shire of Collie, councillors received a briefing from Premier Coal operations manager Jim Falconer in which he stated the local coal mine had a contract with Synergy that required a minimum take of coal until 2030.

Councillors were allegedly told that the state would still be liable to pay for the minimum tonnage if it decided to close its coal burning power stations.

They were also told that despite the emergence of rooftop solar and other alternative energy sources, Premier Coal supplied Synergy with 3.88 million tonnes of coal in 2018.

Plenty of supply: The state may have to buy the same amount of coal from Premier Coal even after the closure of the Stage C units.

Plenty of supply: The state may have to buy the same amount of coal from Premier Coal even after the closure of the Stage C units.

When asked about the coal supply contract between Muja Power Station and Premier Coal, a Synergy spokeswoman said the terms of the coal supply agreement remained 'commercial in confidence.'

"The coal supply agreement with Premier Coal remains on foot," she said.

"The terms and conditions of that agreement are confidential, but the counter parties maintain a long and constructive relationship - that will continue."

Despite the closure of the State C units, the spokeswoman said the reduction in coal-fired units would not necessarily impact on the required coal volumes.

"It is likely that other Synergy generation assets will be able to operate more optimally, which will increase the volumes of coal they currently use," she said.

In the 2016-17 financial year, Australia's coal consumption was 18 per cent lower than its peak in 2008-09 and it continues to decrease as the use of renewable energy grows.

Premier Coal was approached for comment on its contract with Synergy, but did not respond by the time of print.

COAL USE FALLS: Australian energy consumption by fuel type. Source: Department of the Environment and Energy.

COAL USE FALLS: Australian energy consumption by fuel type. Source: Department of the Environment and Energy.