30/10/2007 - 22:00

Aviva plans power play

30/10/2007 - 22:00

Bookmark

Save articles for future reference.

South Perth company Aviva Corporation is confident of joining Alinta, Griffin Group and NewGen Power as major new entrants to Western Australia’s energy generation sector.

Aviva plans power play

South Perth company Aviva Corporation is confident of joining Alinta, Griffin Group and NewGen Power as major new entrants to Western Australia’s energy generation sector.

Aviva is planning to build a 400-megawatt coal-fired power station at Eneabba, at a cost of about $1 billion, to take advantage of low-cost coal supplies and growing electricity demand in the Mid West.

If all goes to plan, its Coolimba Power project will be in production in 2012.

Aviva has been working on the project for more than three years and in the past six months has gained market support as its share price has risen four-fold.

Key moves have included the recruitment of former Western Power and CS Energy executive Mark Chatfield and former NewGen Power executive Richard Harris.

Mr Harris is leaving NewGen – jointly owned by Queensland company ERM Power and investment bank Babcock & Brown – as it moves close to developing its second power station in WA.

It gained environmental approval this week for a 330MW gas-fired peaking plant at Neerabup, north of Perth.

Mr Harris said he was excited by the opportunities at Aviva.

“I wouldn’t have joined if I didn’t think this project was real,” he told WA Business News.

Aviva considers its project location one of its main advantages, since its plant will be close to planned mining and industrial projects in the Mid West.

“It’s a huge advantage,” said Mr Harris, who explained that existing generators, which are located south of Perth, faced big transmission losses when electricity was transported to the Mid West.

Aviva believes its second big advantage is its 73 million tonnes coal deposit, which it says will provide the cheapest fuel for any power project in WA.

Mr Chatfield said he did not anticipate any environmental or geological complications extracting the coal, which is located on private farmland and an existing mining lease.

Aviva’s access to low-cost coal contrasts with the sharply rising cost of gas, as a result of gas supply failing to keep pace with demand.

Aviva’s competitive advantages will be partly eroded by the costs associated with making its coal-fired plant environmentally acceptable.

The plant is being designed so Aviva can retro-fit the boilers to be “oxy ready”, which means they will burn pure oxygen. This will allow carbon emissions to be captured, liquefied and pumped underground for storage.

“We will design it and lay it out so that as the technology catches up, we are able to retrofit the plant,” Mr Chatfield said.

“Unless we future proof this power station, you wouldn’t build it.”

He said the carbon capture technology was currently being trialled by CS Energy in Queensland, and in Canada.

The plant will also install technology to deal with the high sulphur content in the coal.

“We think that is perfectly achievable,” Mr Chatfield said.

He believes changes in the energy market, including higher gas costs and ‘taxes’ on carbon emissions, will work to Aviva’s advantage.

“We think this is going to be very competitive with where the market finds itself in 2012,” Mr Chatfield said.

As well as supplying Mid West customers, the Aviva plant will linked to the south west through a new transmission line planned by Western Power.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options