WA power stations go for natural gas

Western Australia is sharing in a national trend towards increased use of natural gas as the fuel source for new power stations, a report by law firm Minter Ellison has found.

The report, Energy in Australia, lists 13 new power projects either proposed or under construction in WA, with 11 fuelled by natural gas.

The two exceptions in WA are Griffin Group’s 200-megawatt Bluewaters coal-fired power station, currently under construction near Collie, and Wind Energy Corporation’s proposed 30 MW wind farm near Geraldton.

Nationally, the report lists 106 power projects currently on the drawing board, with 27 using natural gas and 21 using wind.

Minter Ellison’s Perth energy and resources partner Andrew Thompson said WA’s growing energy demands would be met by existing independent power producers and new investors.

“Of the 13 proposed new power projects, it is estimated that half will be completed by the end of 2009,” Mr Thompson said.

He added that the debate surrounding climate change and emissions trading had created new legal issues.

“The sands have shifted in the past 18 months, with the business community now understanding that we will have some form of emissions trading,” he said.

“It’s just a matter of when.”

Contrary to the overall trend, some of the biggest resource projects in WA have opted for coal-fired power.

In particular, Newmont’s $2 billion Boddington gold mine has become the anchor customer for Griffin’s Bluewaters power station.

By choosing to buy power from Bluewaters, Newmont removed the need to build its own gas-fired power station.

In the Mid West region, aspiring iron ore miner Gindalbie Metals has opted for coal-fired power as its preferred energy source.

Gindalbie managing director Garrett Dixon announced earlier this month that coal was considered the only feasible energy source for the project, which will need about 100 MW of power each year to process its magnetite ore through a concentrator.

“Gas generated power is too costly and pricing is not available for the length of term we are looking for,” Mr Dixon said.

“We have sourced long-term coal-fired power generation options for the project and we are currently in the process of finalising the best alternative.”

In other Mid West news, Eneabba Gas passed a major milestone last week when the Economic Regulation Authority granted a generation licence for its 160MW Centauri 1 project.

Major gas-fired power stations under construction in WA include NewGen Power’s 320 MW unit at Kwinana and Alinta’s second 140 MW co-generation unit at Alcoa’s Pinjarra alumina refinery.

This followed commissioning of the first unit in 2005, and will be followed by further units at Alcoa’s Wagerup alumina refinery.

Another major project underway is Energy Developments’ $230 million West Kimberley project, which involves the construction of five new gas-fired units at towns in the north of WA.