Alinta Energy has taken the first steps toward developing what it hopes will be a fully integrated energy network in the state’s north, potentially trumping plans by government utility Horizon Power.
Horizon has for some years been advocating the development of an East Pilbara Link, which would connect energy infrastructure in the towns of Port Hedland and Newman.
Its planning for the project has included calling for expressions of interest from the private sector. Alinta participated in that process but has subsequently decided to go its own way.
“While they have a concept of what they want to do, we’re actually getting on with doing it,” Alinta chief executive Jeff Dimery told WA Business News.
“We’re happy to work with them but we’re going to do what we need to do, either way.”
Best known as a gas retailer in the state’s South West, Alinta is pursuing growth in the north, where it already operates power stations in Newman and Port Hedland.
With major customer BHP Billiton in the process of building its own power station near Newman, Alinta is keen to sell power to other mining companies.
“We’ve been in active discussions with large customers and relevant authorities and I’m pleased to say were making very good progress,” Mr Dimery said.
“In fact, we’re undertaking feasibility studies and are well advanced in looking at building high voltage transmission lines to transport energy to remote locations.”
He said Alinta was ultimately aiming to connect its Hedland and Newman power stations.
“We’re building at each end and at some point we want to connect them up.”
Mr Dimery said he was open to working with Horizon on the project, which he estimated would cost about $650 million.
“If we have an opportunity to work together, once we build part of the link, if they want to be involved in the next part, that’s fine,” he said.
Horizon told WA Business News it had progressed the expression of interest process but not to the point where a partner had been selected.
Its proposed East Pilbara Link would connect to the existing north-west electricity grid, which largely runs along the coast.
Horizon believes an integrated power network in the Pilbara would deliver clear benefits, including giving smaller businesses access to critical infrastructure at a price that does not constitute a barrier to entry.
Mr Dimery believes the state should go further.
“Having the South West connected to the Mid West and further north to the Pilbara is a vision the government should have for the state over the next decade and a half,” he said.
Despite all the talk of a Pilbara electricity grid, the mining companies that dominate the region continue to favour stand-alone developments, which deliver the energy security each of them needs.
Last September, Rio Tinto announced it would spend $US520 million on a 120-megawatt power station while BHP Billiton and its partners are spending $US597 million on a 190-megawatt power station at Newman.
Mr Dimery was in Perth last week to unveil a new logo and livery for Alinta, which has dispensed with its traditional gas flame in favour of an energy burst, and formally changed its name to Alinta Energy.
Under the ownership of private equity funds for the past year, Mr Dimery said the business was aiming to double in size over the next five years, right across the country.
He said the ambitious target was to hit 1.5 million customers.
Mr Dimery said Alinta would be actively promoting gas appliances as more economical than electrical appliances.
