Grid block as Pilbara powers ahead

Could the breakneck speed of development in the Pilbara end up costing producers and the state through inefficient duplication of power plants?

The state’s Karratha-based regional energy player Horizon Power warns that Western Australia has a one-off opportunity to create a new and more efficient power grid in the North West to save up to $350 million each year in costs as well as offer big reductions in CO2 emissions.

Horizon boss Rod Hayes, who revealed the opportunity to the recent WA State Energy Conference, said that the forecast growth in energy requirements through to 2015 could be a catalyst to developing a network of big, third-party-operated generators feeding into an interconnected system rather than adding more isolated energy generation.

 “We are talking about a power system for the next 50 years,” Mr Hayes told WA Business News.

Mr Hayes said publicly announced plans just from existing and emerging iron ore producers represented enough demand to build two major power stations. More was needed for LNG processors and the general population of the region.

Mr Hayes said most big resources companies were planning stand-alone power stations of 150-300 megawatt capacity, with several smaller power plants also in the pipeline.

Both Rio Tinto Ltd and BHP Iron Ore Ltd are forecast to install about 300MW of new power generation to drive their operations.

China-based CITIC Pacific’s CP Mining operation at Cape Preston has already announced a 450MW plant, due to the big energy requirements for processing magnetite ore.

This new capacity would need much more fuel and produce significantly more emissions than bigger power plants operating off a grid, as is seen in the South West Interconnected System.

The SWIS covers the most populated region of the state including parts of the Mid West where third-party power generators like Aviva Corporation Ltd are establishing to service miners through the grid.

Power stations of around 750MW are considered so much more efficient that they would reduce the required installed capacity in the NW from a projected 6,000MW in 2015 on the current model to 5,200MW through a grid, and still adequately meet the needs of industry.

Mr Hayes said that the challenge will be to harness that need for energy cooperatively in a timeframe that met the needs of mining rivals and their LNG-producing neighbours.

He added that a distribution grid would also need to be funded and installed in that time frame.

“The block to it is that everyone is in a mad, frantic rush to get their product to market in a boom,” Mr Hayes said.

 “This (idea) requires everyone to collaborate on a long-term plan and put their short-term plans into that context.

“The difficulty for everyone is how do we do that and not get held up timewise? That is a valid concern.”