Western Australia's Muja coal-fired power station will remain operational for longer.

Western Australia has opted to extend the operation of one of its coal-fired power plants due to concerns of an impending electricity supply shortfall by 2025, as highlighted in a report by the Australian Energy Market Operator (AEMO).

Originally scheduled to cease operations in October 2024, the Muja 6 plant's retirement will now be postponed until April 2025, as projected demand growth looms large on the horizon. 

The move comes as part of the government's commitment last year to phase out coal-fired power plants by 2030.

The AEMO report identifies a surge in electricity demand over the coming decade driven by increased utilisation of electrical appliances, electric vehicles, and amplified industrial requirements, particularly from the burgeoning lithium mining and processing sector. 

Should no action be taken to address this trend, power outages are anticipated to strike Western Australia as early as 2025.

Kate Ryan, Managing Director of AEMO's Western Australia division, has emphasised the role of population growth, saying; “We're also seeing some growth in our large industrial use, so that's by existing industrial customers but also new ones, so when you think of lithium mines and processing facilities that are being announced”. 

Peak demand is forecast to escalate by approximately one-third over the next decade.

To ensure a stable power supply, AEMO estimates the need for an additional 945 megawatts (MW) of reserve capacity in Western Australia's electricity supply networks by the 2025-26 fiscal year, an amount equivalent to a coal-fired power plant. 

This figure balloons to a 4,000 MW shortfall by 2032-33, a significant surge compared to last year's projection of 303 MW for the same period. 

This year's report marks the first time AEMO has factored in Western Australia's commitment to shift away from coal-fired energy by 2030, a transition that would subtract approximately 1,366 MW from the power generation capacity.

AEMO has called for immediate investments in the state's generation, transmission, and storage systems to bridge this impending energy gap. 

Energy Minister Bill Johnston has indicated that the staged retirement of Western Australia's coal-fired power stations remains feasible. 

To mitigate the energy shortfall, the planned closure of the Muja 6 power plant will be delayed, with the facility transitioning into “reserve outage mode” starting in October. It will be available during periods of peak demand, particularly in the summer.