The state government has delayed calling tenders for its electricity purchases after Premier Alan Carpenter announced a big increase in the state’s renewable energy targets.
The state government has delayed calling tenders for its electricity purchases after Premier Alan Carpenter announced a big increase in the state’s renewable energy targets.
The premier announced earlier this year that the government would purchase 20 per cent of its electricity from renewable energy sources by 2010.
A spokesman for Treasurer Eric Ripper, who manages government procurement, said the tender proposal was delayed because of several significant developments, including the new renewable energy target and the potential for a national emissions trading scheme.
The delay has added to uncertainty about whether the government will achieve hoped-for savings on its electricity purchases, which amount to 160 megawatts per year.
The government had planned to award an interim electricity supply contract last year, but scrapped that plan when rising gas prices wiped out expected savings.
Five suppliers have been short-listed to bid for the government contract for the substantive supply period, starting in 2009, including Alinta, Synergy, Griffin Energy and Wambo Power.
The treasurer’s spokesman said “it is unlikely that the tender document will be made available to the shortlisted firms in the near future”.
The delay in the government tender follows speculation about a tender being run by Synergy for the supply of 400 megawatts of generating capacity.
Industry sources say that Griffin, which is building the Bluewaters coal-fired power station at Collie, is the only serious bidder for the Synergy tender.
The lack of competition reflects the very tight supply of gas in the south of the state, with gas users unable to secure long-term supplies for new projects.
The one exception is Wambo, which is building the 320MW NewGen gas-fired power station at Kwinana.
Wambo spokesman Richard Harris said his group locked in its gas supplies in 2005 and was probably the last user to sign a long-term contract for large volumes of gas.
Mr Harris said Wambo was focusing on the planned government tender, and was assessing several supply options.
Wambo has contracted gas supplies in excess of its requirements at Kwinana and is also working with Aviva Corporation, which is hoping to develop a coal project in the Mid West.
A big challenge facing electricity generators is the limited transmission capacity in Western Power’s existing network. This constrains the ability of generators like Griffin and Verve, which have power plants at Collie, to supply customers in areas like the Mid West and Great Southern.
Western Power is planning to increase spending on its transmission and distribution network to deal with fast-growing electricity demand. This includes planning for a 330,000 volt transmission line between Pinjar, just north of Perth, to Moonyoonooka near Geraldton.
