Perth Energy in $30m Verve deal

28/05/2008 - 22:00


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West Perth-based power minnow Perth Energy has signed a $30 million-a-year deal to buy energy from generator Verve Energy.

The five-year deal will significantly increase Perth Energy's supply to its contestable and small-use customers, which currently stands at about 30 megawatts a year.

Perth Energy commercial manager Geoff Gaston said the contract would help the company expand its overall operations and make it a viable and strong third choice in the retail electricity market.

He said the company was aiming for about 10 per cent of the market within five years.

"Since the market opened in September 2006 we've been focused on growing our business," Mr Gaston told WA Business News.

"Once the rules were finalised, we were ready to focus on growing our business and providing a choice for small and medium commercial and industrial customers.

"This puts us pretty solidly in third spot in the retail game."

And while the company competes with other energy generators which retail to the contestable market, including Griffin Energy and Wesfarmers, Mr Gaston said Perth Energy was keen to attract customers of all sizes and not just focus on larger contracts within the resources sector.

Established in 1999, Perth Energy currently has more than 100 commercial and industrial customers, including universities, government owned utilities and fruit and vegetable shops, through to larger industrial users.

Synergy and Alinta are the only retailers licensed to supply electricity to the residential market.

Perth Energy takes power from a number of generators, including Verve Energy, AGL Energy and other independent landfill gas power generators.

The company is also on the verge of becoming an energy generator itself, with the development of a 120MW gas fired power station in Kwinana through its wholly owned subsidiary, Western Energy Pty Ltd, now close to fruition.

On the drawing board since 2003, the dual-fuel open-cycle gas turbine power plant will use the latest generation in gas turbine technology.

Mr Gaston said the peaking plant could complement a renewable energy plant, such as wind farms or landfill gas, meeting peak and high shoulder load demands and increasing reliability and security of electricity supply.

The plant will employ up to 80 people during the construction phase, with a permanent operating workforce of up to five people and a contingent management workforce.

Construction of the plant is expected to start later this year, and should be delivered to the market by October 2010.

At a cost of $100 million, the plant will be funded by infrastructure investor Infratil Australia Ltd, a subsidiary of New Zealand stock exchange-listed Infratil Ltd and majority owner of Perth Energy, and other financial backers.

Infratil owns a portfolio of energy, airport, public transport and property assets across Australia, NZ and Europe.


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