Energy minister Peter Collier has predicted that state-owned energy retailer Synergy will need to contract up to 1,000 megawatts of new power generation capacity in WA over the coming decade.
Speaking today at the Energy in Western Australia conference, Mr Collier said there would be a mix of renewable and non-renewable generation, from existing and new suppliers.
“During the period until 2020, I expect that Synergy will need to contract up to 650 megawatts of non-renewable supplies and about 450 megawatts of renewable energy from a mix of renewable energy sources,” Mr Collier said.
Synergey elaborated on the Minister's statement by releasing a brochure titled Powering WA's Future, which stated that Synergy agreed with recent forecasts by the Independent Market Operator (IMO).
The IMO has forecast average growth in energy consumption over the period to 2020-21 of 2.9 per cent pa.
"While Synergy’s existing supply contracts at present adequately cover expected energy requirements until around 2014-15, the organisation is actively looking to secure new electricity supplies up to 2020 and beyond (predominately mid merit/peaking energy in the medium term)," the Synergy brochure stated.
Synergy said it was inviting interested parties to "make a concise submission outlining participant capability and intended business concepts".
"Submissions will be used as a basis to consider an ongoing dialogue with suitable participants to explore the opportunities within an appropriate confidentiality and, where relevant, procurement framework."
The Minister's announcement comes after a recent Economic Regulation Authority report into the state of WA’s wholesale energy market criticised the lack of competition in the market and said that market control contributed to the inefficient uptake of new energy sources.
The announcement also follows the minister’s comments that significant opportunities are still available to the private sector following the replacement of the Vesting Contract between state-owned generator Verve Energy and retailer Synergy.
“A criticism of the replacement contract was the removal of the displacement schedule under which Synergy would periodically seek competitive bids for electricity previously supplied by Verve Energy,” he said.
Mr Collier said the displacement schedule had contributed to some of Verve Energy’s most efficient plant being stranded.
“Taxpayer-funded assets should not sit idle while we pay hundreds of millions of dollars to the private sector for excess capacity in the market,” he said, referring to issues with intermittent renewable sources that contribute to the states energy supplies typically during off peak times.
Mr Collier said interested parties should respond to the initiative, which is an open forum for power players.
“Synergy is looking for a diverse and broad range of energy sources and now is the opportunity for market participants to express their interest.”
