There are fears that a growing crisis in Western Australia's coal heartlands could imperil the state's biggest electricity grid less than a year after the lights flickered out during an intense heatwave.
A long-running saga involving Griffin Coal, one of WA's two coal mines, this week took a critical turn after the operation was tipped into receivership by its Indian bankers.
The move cut off an attempt by Griffin's biggest customer, the 440-megawatt Bluewaters power station, to seize control of the mine following months of disrupted coal deliveries.
But it also comes as coal stockpiles in the Collie basin, where more than a third of the grid's power is generated, plumb historically low levels.
In a sign of the desperation, mining giant South32 this week revealed it was looking to import coal in a bid to ensure supplies for its Worsley alumina refinery.
The announcement comes despite the skyrocketing cost of the commodity on global markets, where coal is fetching prices higher than South32 pays Griffin.
Steve Thomas, an Upper House South West Liberal MP, said the events suggested the crisis affecting Griffin had now spread to its customers.
What's more, Dr Thomas said the problems were threatening to undermine power supplies in WA's biggest grid, which supplies almost two million people in the state's south.
Woes a 'cause of concern'
This follows a series of outages that affected tens of thousands of households last summer, when constraints in the poles-and-wires network cut the power to customers during searing heat.
Dr Thomas said even though the causes of last summer's problems were unrelated to generation, the effects on customers would be the same.
"It is cause for concern. Nobody knows what the next step is," he said.
"And one of those next steps might be the complete collapse of Griffin, its inability to provide coal and then suddenly the lights are threatened over summer when the peak comes."
Griffin's fall into receivership — as well as the appointment of liquidators — has drawn attention to the growing squeeze on coal supplies in WA's main grid.
It is believed stockpiles at Bluewaters have fallen to less than half their contracted levels, while buffers have also been diminished at Premier Coal, which supplies state-owned utility Synergy for its two remaining coal plants.
At the same time, Synergy's 340MW Collie coal-fired power station has effectively been mothballed for more than a week, while Bluewaters has had to buy power from the wholesale market to meet its customers' needs.
Coal-fired generation in the system has fallen to as little as 10 per cent of demand in recent days.
Coal going, but not gone yet
Matthew Bowen, a partner at law firm Jackson McDonald specialising in energy, said the importance of coal to the security of power supplies in WA was reducing all the time.
Mr Bowen also predicted that renewable energy and batteries would largely replace the need for coal within about five years.
However, he noted coal would still be required in the meantime and "disruption of supply … does not help", particularly if consumers did not use electricity "more frugally or more cleverly".
"Managing an electricity system involves having a range of tools available to deal with the range of things that can go wrong," Mr Bowen said.
"And, in the future, we will be in a world where the range of tools available to the operator include a lot of storage to help deal with things that go wrong.
"At the moment, we don't have that.
"And at the moment, one of the tools that's available to the system operator is access to fossil-fuel-powered generation, some of which is coal-powered generation."
The failure of Griffin follows years of losses by its Indian owners — first through conglomerate Lanco Infratech and, since 2017, its financiers led by state-owned bank ICICI.
Tallied up, those losses are understood to be more than $1 billion since 2010.
Receiver Matt Donnelly from big four consultancy Deloitte stressed that none of the mine's workers — believed to be about 600 direct and indirect — would lose their job as a result of the appointment.
Cash needed, but from where?
Mr Donnelly said his aim was to ensure the mine continued to supply coal to its customers, including Bluewaters and South32.
In order to do this, he acknowledged Griffin would need an injection of cash to fix problems with equipment and machinery that have hit production.
But he declined to say where he would find the money, arguing the details of any rescue were yet to be thrashed out.
"If you want to chart a course for the mine to 2030, it's going to need capital.
"Now, there are many different forms of capital — there's debt, there's equity, but there's also improved contractual terms with customers.
"And I wouldn't predict which one of those at this stage is the preferred outcome."
Greg Busson, the state secretary of the Construction, Forestry, Maritime, Mining and Energy Union's mining division, said Mr Donnelly's assurances to workers provided some comfort, but longer-term solutions to the mine's woes were urgently needed.
Mr Busson said managing Collie's transition away from coal in an orderly way was impossible as long as Griffin remained so unstable.
"The lack of investment into the company, the lack of money that was available, is starting to take its toll," Mr Busson said.
"It restricts the management on what they can do with the equipment as far as maintenance goes.
"Obviously, procurement of new equipment has been non-existent.
"And all that sort of stuff, as you start losing equipment or the efficiency of the equipment drops off, your ability to develop new parts of the mine and just continue to mine diminishes."
A hard reckoning 'overdue'
Dr Thomas was more forthright, saying Griffin under its current ownership had served the people of Collie, and WA in general, badly.
He said that until Griffin's Indian owners accepted what he claimed were their inevitable losses, turbulence would continue to reign over WA's coal industry and the broader power system.
"The company that bought Griffin made a horrendous mistake back in 2010," Dr Thomas said.
"They purchased a mine that was worth, at best, $100 million for $730 million and then suffered losses year in, year out.
"I think this company ultimately didn't understand what it was buying ...
"This bank is in a hole here for at least $1.2 billion and I see no possible prospect of that ever being repaid."
No plan for government intervention
WA Energy Minister Bill Johnston said the government was not about to intervene in the Griffin-Bluewaters dispute, which he described as a commercial matter.
But he acknowledged he was keeping a close eye on events.
"As we all know, the coal industry is in a period of transition and it is important that we manage issues as they inevitably occur," Mr Johnston said.
"Commercial disputes are a matter for the parties, however the government wants to see solutions that ensure coal production continues over the coming years.
"Synergy continually assesses generation and fuel requirements and will take all necessary steps to ensure reliable power supply in WA."
