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Gas-fired power plant ‘by 2013′


November 9, 2009

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VICTORIA and NSW could get two gas-fired power stations, with TRUenergy planning to spend more than $2 billion to slash emissions and provide cleaner power to about 1.2 million homes.

But the company says this will depend on it receiving enough compensation under the Federal Government’s Carbon Pollution Reduction Scheme, due to be put to a Senate vote as early as next week.

TRUenergy argues that unless it remains profitable, it will be unable to move away from brown coal electricity generation to cleaner technologies.

Coal-fired electricity generators are demanding $8 billion to $10 billion in compensation for the introduction of an emissions trading scheme.

The Federal Government is offering $3 billion.

The Age has learnt that TRUenergy will put a proposal before the Brumby Government within months to build a 1000-megawatt gas-fired power station next door to its 1500-megawatt Yallourn brown coal station.

If approved, it will be the first base-load power station built in Victoria since Loy Yang B was commissioned in 1993.

The combined cycle gas plant would provide about 13 per cent of Victoria’s base-load power and allow TRUenergy to retire two of Yallourn’s four processing units as early as 2013 when the first 500-megawatt unit is operational.

More than 7 million tonnes of greenhouse gas emissions would be saved if the gas power station were to replace Yallourn – just over 10 per cent of Victoria’s total annual emissions.

Engineering consultant SKM has been commissioned to assess the site next to Yallourn.

The plan is part of a multi-state investment plan that also includes TRUenergy’s proposed Tallawarra B gas power station south of Wollongong, which is being considered by the NSW Government. This would double the size of the existing plant and account for 4 per cent of NSW’s base-load power supply.

TRUenergy managing director Richard McIndoe confirmed the proposals to The Age, saying they were vital to keeping the lights on, particularly in Victoria. But he said the projects would go ahead only if its balance sheet, and that of parent company Hong Kong-based CLP Group, was not wiped out as a result of the CPRS.

”The proposed power stations will emit a quarter of the CO2 of the traditional brown coal generators, which they will ultimately replace. Whether or not these power stations proceed represents a test as to whether or not the Government’s CPRS actually ensures low emissions investments to replace existing, emissions intensive coal-fired generation,” he said.

”It takes over three years to permit and develop any new power station. If these developments do not go ahead, we see a very real risk of electricity outages in Victoria in the future.”

Climate Change Minister Penny Wong said the Government’s CPRS would provide more than $3 billion worth of assistance to coal-fired electricity generators to help them transition to a carbon price.

”It is encouraging to see the electricity sector taking real steps to reduce their emissions,” she said, referring to TruEnergy’s gas proposal. ”The CPRS is designed to encourage the transition of Australia’s electricity generation sector from high-emissions sources like brown coal to lower-emissions sources like gas.”

But Mr McIndoe said $3 billion ”wouldn’t even come close to providing reasonable assistance” and that $8 billion to $10 billion was the ”bare minimum” needed.

Victorian Energy Minister Peter Batchelor said his Government would support the project.

”The task of transforming our energy sector into a cleaner industry is massive, and it’s projects like these that will help us achieve this,” he told The Age.

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