In the podcast, there was a brief mention of a standby plant that receives $15 million per year and never gets turned on.
Even under the old government, this was seen as being unsustainable and that changes needed to be made. The new government is in the process of getting rid of the capacity regime.
Could the reference to an "auction system" replacing "capacity payments" be behind CCE's decision to go with a merchant agreement at the Northam Project?
"The third decision is to gradually ramp down the scale of “capacity payments”, which saw a fleet of gas-fired or diesel-fired peaking power plants built, but rarely if ever used. Instead they received payments merely for being on standby, and in WA those payments were around $120,000 for each MW of capacity per year.
That meant that a 100MW diesel plant – such as the one built near Merredin and highlighted in our story “Dumb and dumber energy choices in WA” – would receive $12 million a year just to be on standby. Some of these plants will likely be shut as the capacity payments are wound back and then replaced with an “auction” system."
