State commits $260m to lift power supply

11/05/2009 - 14:31

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The state government will invest more than $260 million in the Kwinana power station as Verve Energy continues talks with a potential joint venture partner over the restart of the Muja AB station near Collie.

The state government will invest more than $260 million in the Kwinana power station as Verve Energy continues talks with a potential joint venture partner over the restart of the Muja AB station near Collie.

Energy Minister Peter Collier said the state will spend $263.4 million in the construction of two, 100 megawatt gas turbines at Kwinana which will be ready in time for a projected energy supply shortage in summer of 2011/12.

Funds for the turbines will come from this year's state budget, which will be unveiled this Thursday.

Mr Collier said the turbines will, in part, replace Verve's ageing portfolio.

"[The turbines] will be at least one-third more efficient than the generators they will replace and more efficient than the existing open-cycle gas turbines in Verve Energy's fleet," Mr Collier said.

"The additional generating capacity will also help maintain a secure supply of electricity to meet projected demand for power in WA."

Mr Collier added that Verve is investigating the future use of Muja AB to help address energy security problems.

"Negotiations are continuing with a potential joint venture partner to fund a refurbishment and recommissioning the units with improved environmental performance," the Minister said.

"A refurbished Muja AB, with a total capacity of 240 megawatts, fitted out to improve its environmental performance, will help address potential energy security concerns flowing from the slowdown of investment in new generation caused by the current economic downturn.

"Verve Energy's ageing fleet is becoming less reliable and investment is required to ensure these assets can be relied upon."

The electricity commitments come as Treasurer Troy Buswell last week revealed electricity bills will rise by 26 per cent this year.

 

 

The announcement is below:

 


The State Government will make a significant investment of $260million through this year's State Budget to improve the reliability of Western Australian's electricity supply.

Premier Colin Barnett and Energy Minister Peter Collier today announced key works to be carried out in gas and coal power generation.

These works will be balanced by an increase in the use of renewable energy for power generation as the Government meets the Council of Australian Governments (COAG) commitment of 20 per cent of Australia's electricity being generated by renewable sources by 2020.

"This Government's strategic approach is about ensuring a reliable and secure electricity supply for all Western Australians. We have a long-term plan for energy security, something that was severely lacking under eight years of a Labor government," Mr Barnett said.

"There were two significant gas supply disruptions last year, highlighting the need to develop strategies to avert future shortages and provide secure energy supply to meet the needs of the community.

"The previous government had no plan for reliable power supplies and did nothing in eight years to replace Verve Energy's ageing portfolio."

Mr Collier said a major part of this commitment is the construction of two 100-megawatt High Efficiency Gas Turbines (HEGTs) at the Kwinana Power Station, with an investment of $263.4million over the budget period.

"These kinds of turbines have not been installed anywhere else in Australia," he said.

"They will be at least one-third more efficient than the generators they will replace and more efficient than the existing open-cycle gas turbines in Verve Energy's fleet.

"The additional generating capacity will also help maintain a secure supply of electricity to meet projected demand for power in WA."

Construction is to begin immediately, with the turbines expected to be operational by late 2011, ready for the 2012 summer.

The Minister said installing the HEGTs was part of the process to transform Verve's ageing portfolio.

"These use unique, state-of-the-art gas turbine technology combining excellent efficiency and flexible operating capabilities," Mr Collier said.

"This will allow Verve Energy to better use existing base load plant, which is designed for continuous operation rather than a stop-start operating regime.

"It will also improve Verve's overall plant efficiency by making better use of gas and lowering the carbon intensity of the generation portfolio."

While substantial investment is being made to provide more reliable electricity supplies for the long-term, Verve Energy is investigating the future use of Muja AB to help address energy security concerns.

"Negotiations are continuing with a potential joint venture partner to fund a refurbishment and recommissioning the units with improved environmental performance," the Minister said.

"A refurbished Muja AB, with a total capacity of 240 megawatts, fitted out to improve its environmental performance, will help address potential energy security concerns flowing from the slowdown of investment in new generation caused by the current economic downturn.

"Verve Energy's ageing fleet is becoming less reliable and investment is required to ensure these assets can be relied upon."

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