18/01/2022 - 15:52

Court switches in Newgen, Synergy battle

18/01/2022 - 15:52

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A court has overturned a June 2020 ruling requiring Synergy to pay the owners of the Newgen Kwinana power station a fee for periods when the plant was in reserve.

Court switches in Newgen, Synergy battle
Synergy is the biggest generator of electricity in the South West Interconnected System. Photo: Gabriel Oliveira

A court has overturned a June 2020 ruling requiring Synergy to pay the owners of the Newgen Kwinana power station a fee for periods when the plant was in reserve.

An industry source had previously speculated to Business News the bill would have cost Synergy millions of dollars.

The battle hinges on the interpretation of a contract signed between Western Power and NewGen Power Kwinana Partnership in 2005, before the company built a 320 megawatt gas fired generator.

The plant’s owners, Energy Infrastructure Trust and Sumitomo Corporation, were to be paid to provide a spinning reserve.

That’s extra generation capacity rapidly available to the system to keep the grid stable and safe.

Synergy and Newgen differed as to the exact circumstances when the payments should be made, with the trial judge, Justice Jennifer Hill, preferring Newgen’s construction of the contract.

Newgen believed it should be paid for all times the spinning reserve capacity was made available, not just the times specified by Synergy.

Synergy argued the payments should only be made only when the reserve capacity was requested.

The interpretation depends on reading of the state’s electricity market rules.

In a judgement today, Justices Robert Mitchell and John Vaughan, and Chief Justice Peter Quinlan, allowed Synergy’s appeal.

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