Bluewaters power station

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Bluewaters power station is an operating power station of at least 466-megawatts (MW) in Collie, Western Australia, Australia with multiple units, some of which are not currently operating.

Location

Table 1: Project-level location details

Plant name	Location	Coordinates (WGS 84)
Bluewaters power station	Collie, Western Australia, Australia	-33.332186, 116.228023 (exact)

The map below shows the exact location of the power station.

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Unit-level coordinates (WGS 84):

• Unit 1, Unit 2, Unit 3, Unit 4: -33.332186, 116.228023

Project Details

Table 2: Unit-level details

Unit name	Status	Fuel(s)	Capacity (MW)	Technology	Start year	Retired year
Unit 1	operating	coal - subbituminous	233	subcritical	2009	2029 (planned)
Unit 2	operating	coal - subbituminous	233	subcritical	2009	2029 (planned)
Unit 3	cancelled	coal - subbituminous	208	subcritical	–	–
Unit 4	cancelled	coal - subbituminous	208	subcritical	–	–

Table 3: Unit-level ownership and operator details

Unit name	Owner
Unit 1	Summit Southern Cross Power Holdings Pty Ltd [100.0%]
Unit 2	Summit Southern Cross Power Holdings Pty Ltd [100.0%]
Unit 3	Summit Southern Cross Power Holdings Pty Ltd [100.0%]
Unit 4	Summit Southern Cross Power Holdings Pty Ltd [100.0%]

Project-level coal details

• Coal source(s): Ewington mine

Background

Bluewaters power station is a 2 x 233-megawatt (MW) coal plant located 4.5 kilometres north east of Collie, Western Australia.

Griffin Energy's proposals for two subcritical coal-fired power station were approved by the Western Australian government in 2004 and 2005. In December 2005 the company announced that Mitsui would begin construction of the $400 million Unit 1 in early 2006 with a completion date set for 2008. The station was planned on the basis of using coal from Griffin’s new Ewington I mine

The plant was initially scheduled to be commissioned in late 2008. Construction of Unit 2 began in 2007 with the commissioning date pushed back to 2009. Both units were commissioned in 2009.

The administrators of the Griffin Group, KordaMentha report that 93% of the power from the plant is sold "under 3 complex PPAs [Power Purchase Agreements] (and the remainder sold on market)."

Ownership upheavals

The plant was initially built by Griffin Energy. However, following the financial collapse of the Griffin Group in January 2010 after failing to meet a payment on its $700 million of debts, the administrators sold off the power generation assets of Griffin Energy.

In January 2011 it was announced that Kansai Electric Power (KEPCO) and Sumitomo Corporation had agreed to buy the power station for approximately $1.1 billion and that the deal was expected to be finalised within two months.

However, the deal was delayed by complex negotiations with Lanco, which insisted on renegotiating the coal supply contracts for the power station which they argued -- after buying the mines -- that the contracted coal price was too low. Renegotiating the coal price required the administrators to renegotiate the power purchase agreements before Kansai Electric Power and Sumitomo Corporation would agree to complete the deal. By January 2012 the administrators were estimating the sale could be completed by March.

However, the sale wasn't completed until mid-February 2013. Sumitomo announced that the consortium formed between it and Kansai Electric Power would "jointly manage the acquired electricity business". Sumitomo announced that its share of the project would be managed through its Sydney-headquartered wholly owned subsidiary Summit Southern Cross Power Holdings Pty Ltd. Sumitomo, which had bought a stake in the 320 MW Kwinana gas fired plant in 2009, signalled that "aims to further expand its power project business in the Australian market."

In August 2022, Sumitomo initiated legal action in an attempt to take over ownership of the Griffin coal mine, because the company had failed to provide reliable coal supplies and had directly impacted the operation of the Bluewaters plant. At this point, Griffin reportedly had US$671 million in debts.

In October 2022, a liquidator's audit found that Griffin Coal owed $1.41 billion to secured creditors and another $33 million to local suppliers.

In February 2023, the West Australian Government offered Griffin Coal A$19.5 million ($13.61 million USD) to continue supplying coal to the power station.

In November 2023, the West Australian government extended their financial support for Griffin Coal, pledging to provide A$220 million (US$144 million) to keep the Griffin coal mine operating until 2026.

Coal retirement

In February 2023, the Australian Energy Market Operator (AEMO) stated that Bluewaters power station, the youngest coal-fired project in Austrailia, would retire by 2029. They also predicted a scenario where the power station could be shuttered by as soon as mid-2023.

2023: Waning profitability and potentially expedited retirement

Reporting in August 2023 stated that the Bluewaters plant was facing financial issues and could be shut down as early as 2025, though it would "likely" close near the end of the decade. September reporting further noted that the power station had been running well below its regular capacity due to a shortage of available coal from its supplier, Griffin Coal. In the AEMO's 2023 Wholesale Electricity Market report (published August 2023), it was estimated that the Bluewater units would close in October 2030 in the expected scenario, or in October 2025 according to a "high" or accelerated scenario.

Debt problems in 2020

In July 2020, The Australian reported that an August 2020 deadline for the Bluewaters Power Station to pay back A$400m of debt would prove challenging for Sumitomo Corporation due to the fact that many international commercial banks are no longer prepared to provide finance for the thermal coal sector. It could therefore fall on the power station owners to provide their own capital to service the debt.

In November 2020, Sumitomo reported a US$241 million loss at the Bluewaters coal power plant as it posted record losses overall for the first half of its financial year. In December 2020 Sumitomo wrote off its $250 million investment in the plant, evaluating the plant as worthless given Australia's turn towards other forms of energy.

In March 2021, The Australian Financial Review reported that due to climate change concerns the Australian investment management company IFM Investors had declined to get involved with a potential refinancing deal for Bluewaters. While IFM did not refer directly to Bluewaters, AFR reporting strongly suggested that the investment company's climate report had alluded to its rejection of an offered refinancing package from Bluewaters. According to IFM's climate report, "Whilst we do not typically exclude companies, IFM has declined to participate in several debt offerings principally due to a lack of alignment with our Responsible Investment Charter and ESG Policy, or due to ownership, governance or other ESG issues of the borrower (or parent of the borrower) ... For example, refinance for a power station was rejected due to concerns relating to the use of coal as the main fuel, as well as the plant's revenue reliance on a particular company that we believe lacked appropriate governance structures."

Background on Bluewaters Power Station Expansion Project

Griffin Energy proposed to add a further two 230 MW coal-fired generating units with a proposed commissioning date of 2012 and 2014 at the same location. The company stated that it "will also ensure the Bluewaters Power Station Expansion project will be capable of adopting carbon capture technology in the future, once this developing technology becomes commercially viable in Western Australia."

Bluewaters Power states on its website that the two additional units would be 208 MW each and "are planned for completion in 2015" and that it "will be capable of adopting carbon capture technology in the future, once this developing technology becomes commercially viable in Western Australia."

However, the EPA were scathing in their 2010 assessment of the proposed plants carbon capture and storage element. While noting that the proposed plant would emit 3.1 million tonnes of carbon dioxide equivalent emissions a year, the EPA wrote:

"Although the proponent intends to make sufficient space available on land immediately adjacent to each of the new generation plants to accommodate carbon capture related plant and equipment, it has not clearly indicated where this area of land is located within the proposed plant layout. Nor has the proponent confirmed that this area of land will be safeguarded against the construction of non-carbon capture related plant and equipment within it in the future."

"The Lower Lesueur Formation and the Gage Sandstone geological formations have been identified by the proponent as potential geosequestration sites for the proposal. However, the proponent has not confirmed that these sites could accommodate the CO2 emissions from the Bluewaters Power Station Phase III and Phase IV generating plants over the anticipated life of the proposal. Considerable additional work needs to be undertaken to determine the viability of the Lower Lesueur Formation as a suitable geosequestration site. No detailed information was provided by the proponent in regard to the geosequestration potential of the Gage Sandstone formation. The proponent has not provided any information regarding the identification of potential transport routes to the above sites."

"As a result, the EPA does not consider that the proponent has demonstrated that the project meets the IEA definition of CCS ready. Additionally, the likelihood that CCS will become technically and commercially viable is the near future is uncertain, and relying on CCS to constrain carbon emissions for this proposal in the future represents considerable risk."

In March 2015 the EPA issued a new review of the project and found that "the environmental factors of the proposal have not changed significantly" since the 2010 proposal, but recommended that the time limit of authorization of the expansion be extended by five years, to September 2020.

In December 2018, the owners of Bluewaters power station were reported to be looking for a $500 million dollar investment to replace existing facilities.

Approval

In March 2010 the Western Australian Environmental Protection Authority recommended to the Minister for the Environment that the Bluewaters Power Station Expansion Project be approved subject to a range conditions.

In July 2010 the Western Australian Minister for the Environment, Donna Faragher, approved the expansion of the project subject to requiring the power station "to achieve continuous improvement in net greenhouse gas emissions through the adoption of advances in technology and process management. This includes consideration of carbon capture and storage and the use of new technologies to improve the efficiency of the generator units."

While the project has been approved, in June 2014 the Independent Market Operator - which assesses the adequacy of generation capacity to meet forecast electricity load -- stated that "no new capacity will be required in the SWIS until 2023-24" on its expected forecast.

Timeline

• March 2010: Western Australian Environmental Protection Authority recommends the Minister for the Environment approve the expansion subject to conditions;

• July 2010: Western Australian Minister for the Environment, Donna Faragher, approved the expansion;

• June 2014: Independent Market Operator states that "no new capacity will be required in the SWIS until 2023-24" on its expected forecast.

Plant Details (for Units 1 & 2)

• Sponsor: Summit Southern Cross Power Holdings
• Parent company: Kansai Electric Power Company, Sumitomo
• Location: Collie, Western Australia, Australia
• Coordinates: -33.3321861, 116.2280227 (exact)
• Status: Operating
• Gross capacity: 466 MW
  • Units 1 & 2: 233 MW
• Type: Subcritical
• In service: 2009
• Coal type:
• Coal source:
• Source of financing: Financing for Kansai Electric Power and Sumitomo Corporation's acquisition of the power station in 2013 came in the form of A$922 million debt provided by a banking consortium comprising ANZ, Bank of Ireland, BayernLB, BBVA, BNP Paribas, Dexia Group, DZ Bank, GE Energy Financial Services, Intesa Sanpaolo, KBC Bank, NAB, OCBC Bank, Portigon, Societe Generale and Westpac

Articles and Resources

Additional data

To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.