Power upgrade opens new phase

THE proponent of Australia's biggest new coal-fired power plant believes the two-stage 330-kilovolt upgrade of the Perth-Geraldton transmission line has left the door open to competition among aspiring power proponents in the Mid West.

Aviva Corporation, in partnership with US power giant AES Corporation, plans to spend $1.3 billion building the 450MW Coolimba power station, with a further 375MW of gas-fired peaking capacity, at Eneabba by 2014.

Aviva would have been the biggest winner of an end-to-end upgrade of the transmission line as both a major supplier to the Perth market and emerging demand in the Geraldton region.

Not surprisingly, Aviva was one of the state government's loudest critics in May when no funding was allocated for the 330kv upgrade because the projected cost had doubled to $700 million.

But Aviva believes the decision to split the upgrade into two sections and defer the Eneabba-Geraldton section until at least 2015 will still enable it to supply Western Australia's main electricity market without shutting out smaller scale proponents seeking to supply regional customers.

Aviva's general manager development, Richard Harris, said Coolimba was always primarily intended as a base load supplier into WA's main power grid, despite some outside perceptions of it as a Mid West-focused proposal.

"While Coolimba is in the Mid West and looks attractive to local customers, it is very much a grid project," Mr Harris told WA Business News. "It is another element in the security of supply in the South West.

"So we've always said that ... we're happy as long as we can connect at Eneabba, because the bulk of our power is going to be exported this way [south]."

While other proponents may be looking at direct supply agreements with emerging mining or industrial customers in the Mid West region, Mr Harris said the scale of investment at Coolimba required the certainty provided by a reliable long-term base load customer, such as Synergy.

But splitting the 330kv upgrade did leave room for some smaller scale supply to feed future local demand, he said.

"It (the staged upgrade) says there is maybe an opportunity for some localised generation," Mr Harris said.

In March, energy retailer Synergy shortlisted eight groups for its 2009 procurement tender to secure up to 686MW of additional supply from 2011 onwards.

The short list included several Mid West proponents such as Aviva, five wind farm proponents, and Griffin Energy, which is seeking customers for its planned Bluewaters III and IV coal power plants at Collie.

Synergy declined to comment on the timing of its 2009 procurement tender, but it is believed an announcement could come as soon as next month.

Separately, Eneabba Gas is also confident of proceeding with its 168MW Centauri-1 gas fired power station at Dongara once the timing of new Mid West demand is clearer.

Unlike Coolimba, Centauri-1 will be a direct supplier to new industrial customers in the Geraldton region, and has already secured all necessary permits and approvals.

Once offtake contracts are in place, Eneabba Gas believes Centauri-1 can be developed within 12-14 months, much faster than any competing power proposal.