Wesfarmers' enGen wins Carnarvon power station bid

Wesfarmers' subsidiary Energy Generation Pty Ltd has been named by the state government as the preferred bidder to build, own and operate a new gas fired power station in Carnarvon.

The value of the bid was not disclosed.

State energy minister Alan Carpenter said four companies had submitted bids for Western Power's Carnarvon power project, which was developed to replace an existing diesel/gas power station in the town.

Perth-based PearlStreet is known to have been one of the four companies which bid for the new 15-megawatt gas-fired power station in Carnarvon.

The announcement coincides with news from investment bank Babcock & Brown that its NewGen Power Kwinana Partnership had finalised financial arrangements for the 320MW gas-fied power station for which construction is intended to start next month.

Below is the full announcement:

Energy Minister Alan Carpenter has today announced that Energy Generation Pty Ltd (enGen) is the preferred bidder to build, own and operate a new gas fired power station in Carnarvon.

Mr Carpenter said four companies had submitted bids for Western Power's Carnarvon power project, which was developed to replace Western Power's existing diesel/gas power station in the town.

"enGen is a Wesfarmers' subsidiary and has proven expertise in both power station construction and power supply," he said.

"The company is currently building power stations in five remote towns in the Goldfields, Gascoyne and Pilbara that are due to be commissioned from January, 2006 onwards.

"In addition, enGen is supplying energy to Western Power in seven towns across the Mid-West and in the Goldfields."

Mr Carpenter said Western Power had assessed each bid against a wide range of criteria including price, reliability, community benefits, risk and the ability to undertake and operate the project, both from a financial and technical perspective.

The Minister said the Gallop Government was committed to ensuring regional Western Australia received its fair share.

"The State Government has made a record $2.3billion four-year investment in Western Power to improve reliability and safety across the electricity network," he said.

"Of the maintenance budget, 55 per cent is currently spent in the non-metropolitan areas of the South West Interconnected System (SWIS) - the State's main electricity grid.

"And 30 per cent of the total budget to improve reliability of power supplies currently goes to country areas. In 2008-09, this figure will increase to 50 per cent."

Mr Carpenter said regional customers would also benefit from the Gallop Government's break up of Western Power into four separate business units.

"A new regional power corporation has been created following the break up of Western Power," he said.

"The new corporation will be dedicated solely to improving the electricity supply to regional customers outside the SWIS.

"In addition, the uniform tariff will be maintained for residential and business customers in regional areas, ensuring that regional consumers pay the same as customers in the SWIS."

Mr Carpenter said negotiations between Western Power and enGen should be finalised by the middle of 2006. A 20-year power purchase agreement would then be put in place.

Commissioning of the Carnarvon power station was expected to begin in late 2007.