❓ Dr. Honey questions the government's $220 million support to Griffin Coal, seeking analysis details and usage of funds. The Premier acknowledges the difficult situation, citing energy security concerns and commercial confidentiality limitations.
AnsweredQoN 637Legislative Assembly
QuestionView source ↗
GRIFFIN
COAL
637. Dr D.J. HONEY to the Premier:
I refer to the $220 million that the state has paid to
Griffin Coal to support its operation.
(1) What analysis was carried out by the government to
support the amount paid to Griffin Coal?
(2) If any analysis was done, will the Premier release that
analysis?
(3) Has any of the money paid to Griffin Coal been used to
pay off its debt?
COAL
637. Dr D.J. HONEY to the Premier:
I refer to the $220 million that the state has paid to
Griffin Coal to support its operation.
(1) What analysis was carried out by the government to
support the amount paid to Griffin Coal?
(2) If any analysis was done, will the Premier release that
analysis?
(3) Has any of the money paid to Griffin Coal been used to
pay off its debt?
AnswerView source ↗
(1)–(3) I thank the member for the question. A lot
of analysis has been undertaken for both the financial viability of Griffin Coal and also Bluewaters power station. To
recap briefly, we have a situation in which Griffin Coal bought the
coalmine with an existing contract with Bluewaters power station. The fact of
the matter is that it cannot afford to provide that coal to Bluewaters power
station at the contract price. Therefore, we have a situation whereby it
potentially fails and lights go off. That is not a situation we want to see
occur. The energy security of Western Australians is absolutely paramount. We
want to keep the lights and the air conditioners on and we want to do so until
such time that we can afford to do without the power that comes from that
coal-fired power station.
We went into protracted
negotiations with all parties and, quite simply, could not find a way through
that allowed us to guarantee energy security for Western Australian households
and industry. As a result, we struck the
arrangements we have, which is that we will support Griffin Coal to the extent
that it can continue to mine effectively to provide supply to Bluewaters
power station. It is not a great situation. A number of financial parties are
protecting their financial interests. Of course, as we know, companies do just
that; they are there to protect their financial interests. We are there to
protect the interests of Western Australian households and industry. As a result,
we are now in the invidious position of having to support the contractual obligations
and rights that exist in this relationship in order to ensure that Bluewaters
power station can continue. Bluewaters believe it has certain step-in
provisions in relation to that mine. It has been challenged in a legal sense by
Griffin and Griffin subsequently has placed itself into receivership, so whatever step-in provisions that might be
available to Bluewaters are now essentially suspended or not exercisable. As a result, we have a difficult situation. We do not like it.
No-one likes it but it is something we have inherited and we are dealing with.
The
unfortunate circumstance that further complicates this situation is that all
these companies are working in commercial-in-confidence arrangements.
Therefore, we cannot provide the usual level of transparency that members would
anticipate in this situation. However, we are providing as much information to
Parliament as possible, as those commercial-in-confidence arrangements allow.
We will continue to do a range of things. We
will make sure that Griffin can continue to mine the coal in a way that meets
the needs of Bluewaters power
station, so that Bluewaters power station can operate to meet the needs of its
customers . Its customers include the Water Corporation, South32 and
others. We will continue to work in this vein. We recently brought in changes
to the state agreement that will see that state agreement concluded by 30 June 2026, I believe. At that point, we believe
we will have enough renewable and stored battery energy in the system so that Bluewaters can do what it
needs to do—whether that is find new contracts or, in fact ,
simply close down, as we anticipate for all our coal-fired power stations by
2030.
of analysis has been undertaken for both the financial viability of Griffin Coal and also Bluewaters power station. To
recap briefly, we have a situation in which Griffin Coal bought the
coalmine with an existing contract with Bluewaters power station. The fact of
the matter is that it cannot afford to provide that coal to Bluewaters power
station at the contract price. Therefore, we have a situation whereby it
potentially fails and lights go off. That is not a situation we want to see
occur. The energy security of Western Australians is absolutely paramount. We
want to keep the lights and the air conditioners on and we want to do so until
such time that we can afford to do without the power that comes from that
coal-fired power station.
We went into protracted
negotiations with all parties and, quite simply, could not find a way through
that allowed us to guarantee energy security for Western Australian households
and industry. As a result, we struck the
arrangements we have, which is that we will support Griffin Coal to the extent
that it can continue to mine effectively to provide supply to Bluewaters
power station. It is not a great situation. A number of financial parties are
protecting their financial interests. Of course, as we know, companies do just
that; they are there to protect their financial interests. We are there to
protect the interests of Western Australian households and industry. As a result,
we are now in the invidious position of having to support the contractual obligations
and rights that exist in this relationship in order to ensure that Bluewaters
power station can continue. Bluewaters believe it has certain step-in
provisions in relation to that mine. It has been challenged in a legal sense by
Griffin and Griffin subsequently has placed itself into receivership, so whatever step-in provisions that might be
available to Bluewaters are now essentially suspended or not exercisable. As a result, we have a difficult situation. We do not like it.
No-one likes it but it is something we have inherited and we are dealing with.
The
unfortunate circumstance that further complicates this situation is that all
these companies are working in commercial-in-confidence arrangements.
Therefore, we cannot provide the usual level of transparency that members would
anticipate in this situation. However, we are providing as much information to
Parliament as possible, as those commercial-in-confidence arrangements allow.
We will continue to do a range of things. We
will make sure that Griffin can continue to mine the coal in a way that meets
the needs of Bluewaters power
station, so that Bluewaters power station can operate to meet the needs of its
customers . Its customers include the Water Corporation, South32 and
others. We will continue to work in this vein. We recently brought in changes
to the state agreement that will see that state agreement concluded by 30 June 2026, I believe. At that point, we believe
we will have enough renewable and stored battery energy in the system so that Bluewaters can do what it
needs to do—whether that is find new contracts or, in fact ,
simply close down, as we anticipate for all our coal-fired power stations by
2030.
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