Billion dollar gas plant proposal

A NEW billion dollar gas power station proposed for the Latrobe Valley will be built, but only when the market demands it.

That was the cautionary message from TRUenergy on Friday, when managers told The Express the project, expected to create about 600 jobs during its peak construction phase, was “a matter of when, not if” but would not go ahead until there was an increase in electricity demand, or when other power generators closed.

TRUenergy thermal development manager Graham Dowers said the 1000 megawatt Yallourn Combined Cycle Gas Turbine power station, proposed as a stand-alone plant alongside TRUenergy’s existing Yallourn coal-fired generator, was about half-way into an estimated five to six-year development process.

The permit phase was a “significant part” of the process and project plans were currently on public display throughout the Valley, with a panel hearing scheduled for September to hear all submissions on the company’s Environment Effects Statement, he said.

Mr Dowers and TRUenergy corporate relations manager Carl Kitchen maintained the company saw the Valley as the state’s “continuing energy hub” and local workers were “eminently” suited to the operational and maintenance roles tipped to be created at the new gas plant.

Construction of the two-unit station would proceed in stages and, once complete, would employ between 50 and 60 people, many in senior, well-paid positions, Mr Dowers predicted.

The plant would be the largest of its kind in the TRUenergy “fleet”, requiring an investment of up to $1.2 billion, he said.

It would be modelled on the “absolutely successful ‘state-of-the-art combined cycle'” natural gas plant TRUenergy already operated in Tallawarra, New South Wales, he said.

The company’s EES claims the CCGT technology results in a 70 per cent reduction in greenhouse gases compared with traditional coal-fired stations.

Key components of the proposal include the baseload power station, a 6.5 kilometre gas pipeline and a 10km electricity transmission line. While the EES said an “early start scenario” could see construction start as early as 2014, Mr Kitchen was non-committal on timelines.

“When we started this process we may have thought it would be closer- but there is a softer demand overall in the market now,” he said, attributing it to weather, energy efficiencies and more alternative fuels entering the national electricity market.

“We do think this (project) is a matter of when, not if, but we are not seeing it as something we would drop straight into constructing once we got the permit- but getting the permits brings us two to three years closer if we need to,” he added.

The costly permit process was evidence TRUenergy was serious about the proposal, Mr Kitchen said, “but it is a question of timing”.

TRUenergy is currently in negotiations with the Federal Government as part of its contract for closure process.

When The Express asked if a future scenario could see a gas-fired plant at Yallourn but the closure of its coal-fired station, Mr Kitchen would not speculate.

“We can’t talk about the contracts for closure at all – or link this (proposal) to it,” he said.

“We do understand though that there needs to be a transition over time and this proposal is all about that transition to a newer, cleaner technology.”

“The view is that gas will become the intermediate fuel source over time and CCGT will become ‘baseload’ because it’s cleaner and more efficient,” Mr Dowers said.

Meanwhile, Mr Kitchen said TRUenergy continued to support clean coal initiatives in the Valley and still saw coal as a “valuable resource to Victoria and we want to improve its usage as well”.

He said gas, however, could play a part in the “bridge from where are now, to where we might be in the future – if it’s necessary and if the market demands it”.

Mr Dowers said TRUenergy had consulted numerous stakeholders while preparing its EES and did not anticipate “any real significant impacts” from its proposal, but added “we can only judge that after the exhibition period”.