At long last the deal to get five new power stations and supply Western Power’s electricity needs in the West Kimberley for 20 years has been signed.
The electricity supply deal is worth more than $600 million to Queensland-based Energy Developments Limited over 20 years.
The contract requires EDL to build new power stations at Broome, Derby, Fitzroy Crossing, Halls Creek and Camballin-Looma and an LNG plant at Karratha.
Gas from that plant will be trucked to the five power stations. It is the first time gas-fired power stations have been used in the region.
The construction works are expected to cost $100 million.
Construction is due to begin in October on the Broome power station.
Also under the deal EDL will set up a $1 million trust fund that will be disbursed to the five communities.
There are also the development benefits from being a new type of fuel into the region and the communities will benefit from the quieter power stations. There are also expected to be fewer emissions than those that have been coming from the old diesel-fired stations the communities have been relying on.
Western Australian Energy Minister Eric Ripper said the EDL contract would significantly reduce Western Power’s losses in the region which were running at more than $20 million a year.
Western Power has about 6,500 customers in those five communities.
While there were smiles all around at the signing ceremony at Western Power’s headquarters on July 2, the road to conclusion has been a long and torturous one.
EDL was awarded single bidder status for the project on October 17, 2003, fighting off a determined bid from the Avon Resources-backed Kimberley Power bid.
Western Power regional procurement manager Mark de Laeter told WA Business News that an extension of the bid process, the complexity of the contract and the Kimberley’s wet season had led to an eight month delay in getting the contract signed.
However, there was also controversy when EDL was announced single bidder status.
Kimberley Power accused the WA Government of mishandling the process, claiming that EDL had dramatically lowered its price to come closer to that of Avon Energy.
Western Power strenuously denied Avon’s claims, saying the process had been open, competitive and supervised by a probity auditor.
That bid process was the second tilt the Government has had at getting a private party to produce electricity in the West Kimberley.
Perhaps best remembered are the exciting, yet ultimately futile, attempts to get a tidal power plant set up at Derby.
The then Liberal Government pulled the plug on the tidal project in favour of an LNG-fired option led by Maurice Brand’s Energy Equity in partnership with Woodside subsidiary Metasource.
The project had trouble raising finance and when the Gallop Government came to power the tidal power project was again back on the agenda.
However, when the bid process was restarted the tidal power proponents failed to enter a bid and it became a two-horse race between EDL and Kimberley Power – another company led by Mr Brand.
