Business News - WA
At Close of Business podcast September 18 2024
(upbeat music) All the latest business news from WA, deliver daily. (upbeat music) At close of business, news briefing. - Good afternoon and welcome to the Outcloser Business podcast, I'm Sam Jones and I'll be reading your Wednesday headlines. - Golden Sedai's $4 billion Burswood Point project is set to commence construction early next year more than a decade after the developer purchased the site. The Golden Group joint venture held a groundbreaking ceremony at the Melbourne Park site today and of its expected commencement in the first quarter of next year. The Indonesian group has already spent about $200 million on civil works at the site with a view to building up to 4,500 dwellings over several stages. The first stage comprising a two-tower 203 apartment development and 67 townhouses is set to commence next year with residents expected to move in from early 2026. Golden Sedai received approval for the $150 million towers in February of this year and the townhouses late last year. Speaking to media today, Golden Sedai managing director Andrew Siggia Putra said construction would commence without any presale requirements. And to our regions now, the state government is sounding out abattoir operators to support Southwest Farm to Table businesses, which will next month lose the service of the last big processor they could access locally. West Fork backed Dardenup butchering company it last week gave small farmers four weeks notice it would cease custom kills, the final major processor in the region to do so. That decision followed Craig Mossen group's call earlier in the year to reduce the small kill services at its V and V Welsh abattoir in Bumbry. Custom killing, also known as contract or service kills, is a service whereby farmers can pay and abattoir to process their livestock and then hand it back, ensuring the farmer retains ownership for their own business purposes. Both decisions are understood to have been made due to capacity constraints and complications such as service causes with the production lines for their own value-add products. W.A. Agriculture and Food Minister Jackie Jarvis said the state had asked DBC if short-term state government support was required. And finally, the town of Cambridge is recommending the peak planning body refuse Blackburn's plans to turn the ocean village shopping center into an apartment and retail complex. At Tuesday's council meeting, Cambridge council is unanimously voted in favor of recommending the W.A. Planning Commission refuse the developer's $200 million plan. The proposal is currently being assessed by the W.A.P.C. for its significant development pathway. Blackburn is proposing to build adjacent apartment buildings towering 22 and 10 stories and neighborhood shopping center, restaurants and cafes at the CTBH site. The Sobiaco-based developer acquired the company that owned the ocean village shopping center two years ago being an entity of collapsed builder Pin Dan. The proposed development would comprise of 247 dwellings, which was spooked as responding to the town's local planning strategy, which aims to attract new housing. That's all for today's headlines. You can read more at businessnews.com.au. Coming up on the podcast, Nadia Buddiharjo and Jacqueline Ginn discuss the complexities of navigating W.A.'s gas market. (upbeat music) - Ears, they're everywhere and getting in them is a pretty good way to promote your business. At Creative Fix, we won't just get your business into the ears of customers. We make it stick in their minds. Podcasting, music streaming, radio. We create personalized audio advertising. With over 94% of Australians tuning into audio each week, it's time to get your brand heard. Creative Fix, we give brands a sound. Search Creative Fix online. (upbeat music) - Welcome back to our close business. I'm Nadia Buddiharjo, and today I'm having a chat with Jack McGinn, who wrote the power energy feature in the recent edition of the Business News magazine. So, Jack, you did a lot of research for this. You've tackled the market in, when it's sort of a complex time, what has been the biggest challenge for gas producers in the W.A. market? - Yeah, so with this power and energy feature, I decided to split it into, that was quite deliberate, because there was the recent hand-in-down, tabling in Parliament of the final report from the Domestic Gas Inquiry. So, gas in Western Australia is used pretty prominently as a feedstock for manufacturing of materials. It's used by private energy generators and increasingly going to be used in the electricity market. And that inquiry, over the course of its life, it was supposed to sort of supposed to be six months and ended up being more than a year that they were hearing evidence from different parties and then putting together their report. It became increasingly apparent that the grid was going to be more and more reliant on gas as a firming fuel. And the basic premise behind that is that, while we are seeking to move the grid to renewable power, renewable power isn't always easily accessible. There are times when we have less of it, times when we're relying on the power that's stored in batteries. The gas is a really good firming fuel in terms of it can be scaled up and down to support the grid. A very complex situation for sure. And you mentioned some of the major players in this field. What's the state of their business in the current gas market? Well, there's sort of two, I suppose, genre of gas market players out there at the moment. There's the ones offshore who produce LNG for export. They have a domestic gas agreement obligation to supply 15% of the life of their production for the domestic market. And then there's the sort of emerging story out of the Perth Basin, which is a smaller story, but there's some really big names involved. There's a bunch of billionaires that are tied up in the Perth Basin. Everyone's there. You've got Gina Rohnhart, Kerry Stokes is there. Chris Ellison's there. John Pointen's the chair of strike energy, which is there and producing now. And those ones that are onshore and the Perth Basin are actually required to supply all of their gas into the domestic market, which is a point of contention for them. There is one company there, or one joint venture there that has an exemption that was given to it before the rules changed. And so there's a bit of a haves and has not situation in the Perth Basin. But it's a challenging time for the Western Australian mix of energy and I guess getting the gas into the domestic market because there's this perception that the need for gas is going to increase, particularly after 2030 when we switch off coal. It's challenging to get new gas projects over the line. There's a lot of difficulty there and some real reluctance around FID given the changing regulatory circumstances. We've heard some of the murmurings and rumors around Woodside's browse project, and we've seen some of the challenges that Woodside's had at Scarborough. In terms of some legal challenges, which resulted in having to go back and redo some consultation stuff. So it's a really difficult climate to get a gas project over the line. And increasingly we're seeing some of the gas players, particularly those bigger offshore ones with international interests, maybe focus a little bit elsewhere. And then you've got this duality of the Australian energy market operator saying basically that we're going to need more gas. We're going to need new supply from 2030 and that's not to sell into international markets or for production of materials necessarily, although the Purdleman project that's going to start production in the years ahead on the Bharat Peninsula is going to take quite a lot of the natural gas from Scarborough. It's really about keeping the lights on. And so, yeah, it's a very interesting time, I think, to be particularly developing gas projects in Western Australia. And it'll be interesting to see what all of that means for the grid in the years ahead. - And we saw some of that hurdle in the Barossa? - Yeah, Barossa as well. I mean, that was a huge delay. That's probably the poster child for it. But Barossa being off the NT won't be supplying gas for WA, but very much the poster child for the sort of delay that could happen if you don't have the right regulatory settings in place. And yeah, a huge challenge, huge. - And just moving to your second story for the feature, you touched on the WA electricity market. What's going on there? - Yeah, it was following on from a bit of work that Mark Byer did a few weeks ago around renewables projects under development. So Mark did a big sort of study into the projects projects that were being developed to supply the Southwestern's connected system. So in the Southwest of Western Australia, and he found that basically there's no major wind or solar projects in development at the moment. Recently, the Australian energy market operator put out its capacity tenders for the 2026/27 period, which are basically, it's like a ticket to play in the market. It's not a final thing. There's more modeling that has to be done before potential players in that market can then get their sort of allocation and things are a little bit fluid there. And there's other mechanisms that can be drawn on by AMO to bring energy into the market when it's needed. But there was a few questions subsequently asked that maybe, do we have too many batteries? Do we have too many batteries and not enough renewables to supply them? And the answer is maybe, essentially, from some of the conversations that I've had. So what's happened really, really well in Western Australia is this investment in battery tech. And we built the big batteries. And we know about the synergy ones. We know neon's got a big one down there at Colley. And that's really good. But unless you have the power generation and the transmission lines to actually firstly generate the power and then transmit the power to where it needs to be, those batteries might not be able to sort of operate to the full capacity. And that's a challenge facing the grid at the moment is we've got a lot of battery capacity coming on. But what's actually going to put the energy in the batteries? So that was an interesting sort of thing to look at. I don't think anyone sitting there going, oh, no, we've built all these batteries. What a terrible situation. Because they're clearly going to be needed in the years ahead as the grid transitions. But it's just, I guess, a little bit of a situation where maybe the people making the policy need to look at how they can support the project proponents in developing those new renewable projects. So yeah, it was good and off the back of that work that Mark did. I mean, when Bio looks into something, it always makes it a bit easier to then follow up and have a look at issues around it. So that was really good work to draw on. - Sounds like a lot of teas needs to be crossed and eyes needs to be dotted in the sector. Listeners can read Jack's feature online at businessnews.com.au. I'll pick up the September 16th edition of the Business News magazine that's out now. Thank you for listening and thank you, Jack, for joining me. - Thank you. - The latest business news, deliver daily. Subscribe and rate the show wherever you listen to your podcasts. For all the latest business news, visit businessnews.com.au. (upbeat music) [ Silence ]