The number of companies in Western Australia’s electricity generation market is continuing to grow, with a new report detailing more than a dozen projects currently under way or planned.
The number of companies in Western Australia’s electricity generation market is continuing to grow, with a new report detailing more than a dozen projects currently under way or planned.
The new players in the market range from big companies such as Alinta and the Griffin Group through to aspiring producers like Eneabba Gas, which has a novel strategy based on coal seam methane gas.
Eneabba’s plans were disclosed in the inaugural report of the Independent Market Operator, a government entity that oversees WA’s wholesale electricity market.
Eneabba, run by managing director Mark Babidge, who in the 1980s was chairman of Bond Corporation’s Chile subsidiary, is aiming to construct a 100-megawatt gas turbine power station near Dongara.
It would be breaking new ground if its plans came to fruition.
Coal seam methane is gaining acceptance as a fuel source in Queensland but has not been considered competitive in WA, given the well established gas supplies from the North West Shelf and the Perth Basin.
Eneabba also faces legislative hurdles.
While it has been granted an exploration licence, the right to extract coal seam methane gas rests with the holders of petroleum licences, which in the Dongara area include Arc Energy.
Other aspiring entrants to the energy market include Western Energy and Beacons Consulting.
Western Energy, jointly owned by local energy retailer Perth Energy and international investment bank Babcock & Brown, plans to construct a 120MW gas-fired power station in Kwinana.
Local company Beacons is aiming to develop three 45MW units powered by timber residue, with two in Albany and one at Neerabup, north of Perth.
They are hoping to join Alinta and Griffin, which are proceeding with five new power stations – powered by gas, coal and wind – that collectively will generate 650MW of electricity.
Alinta recently suffered a hiccup in its plans, announcing that completion of its first gas-fired plant at Pinjarra would be delayed until August, with full production not expected until October.
As well as the new entrants, Western Power is planning modifications to upgrade the capacity of its existing power stations.
It is also planning to award a contract this year for the construction of a new 300MW power station.
The three short-listed bidders are Wambo Power Ventures, which plans a gas-fired plant at Kwinana, and Collie coal producers Griffin and Wesfarmers.
The new generating capacity will partly be offset by the closure of three of Western Power’s ageing generation units over the next three years.
The IMO plans to run “reserve capacity auctions” to ensure there is sufficient generation capacity in WA but says “it is unclear” at this stage if it will have to conduct an auction later this year.
It said the system will need 4,000MW of generation capacity in 2007-08 compared with installed and committed capacity of 3,731MW.
The need for an auction will depend on how many other projects come to fruition.
Looking ahead, the IMO said electricity demand in WA is expected to grow by 120MW per year.
Meanwhile, the key people behind Eneabba are its chairman John Saunders, whose past roles have included chairing Spargos Mining and Enterprise Gold Mines, and Mr Babidge.
In addition to his role with Bond Corporation, Mr Babidge was general manager of Telecom (now Telstra) in WA, and more recently a director of Southern Wine Corporation, which was the entity managing the financially stricken Preston Vale Vineyard investment project.
He claimed his main role in Preston Vale was managing the vineyard rather than the project’s financial matters.
