WESTERN Australia will need only eight megawatts of additional electricity generation capacity by mid 2013 to meet forecast demand, according to the Independent Market Operator’s latest statement of opportunities.
WESTERN Australia will need only eight megawatts of additional electricity generation capacity by mid 2013 to meet forecast demand, according to the Independent Market Operator’s latest statement of opportunities.
The report’s findings suggest a tough year ahead for private generation proponents seeking to break into the WA market. Last year’s report identified a potential 585MW shortfall in generation capacity by mid 2013.
The forecast reflects slower than expected completion of the new transmission capacity in the Mid West vital for several key mining projects to proceed.
The state energy market regulator’s annual report measures current and committed generation capacity on WA’s main electricity grid against forecast requirements.
Critically, it has underpinned the annual power procurement process undertaken by state energy retailer Synergy, which has delivered more than $2 billion of private sector investment in new generation capacity since the disaggregation of Western Power in 2006.
But that procurement process has effectively been on hold since last October, when Synergy named state generator Verve Energy as its preferred supplier for future supplies. The decision followed a government review into Verve’s heavy ongoing losses since disaggregation.
The state government is now revising the vesting contract between the two utilities, easing the requirements on Synergy to purchase power from private operators and allowing Verve to make better use of its existing capacity.
In its 2010 report, the IMO has set a reserve capacity target of 5,501MW for 2012-13 based on forecast demand, only 8MW more than the 5,493MW of capacity already in service or committed.
The IMO said while WA’s economic growth was expected to be higher than previously forecast at 5 per cent per annum, most generation demand growth was related to block loads associated with new mining projects in the Mid West.
However, the bulk of these projects were dependent on Western Power completing a $318 million upgrade of transmission lines between Perth and Eneabba.
While the line has been given provisional funding in the current budget, the IMO noted it remained subject to final government approvals, and was unlikely to be completed until late 2013.
“Based on the information available, the IMO has decided that the forecast capacity requirements for 2012-13 should presume no additional new block loads on the northern transmission system beyond the capacity of the existing network,” the IMO report said.
However, an extra 444MW would be needed by 2014 to meet forecast demand as those mines started production.
The IMO said 644 MW of potential new supply had been identified in the most recent tender process, but none was certain to proceed.
Critically, two of the biggest potential new suppliers have since fallen under a cloud. Aviva Corporation’s planned Coolimba power station was scrapped after Synergy’s procurement deal with Verve, while the $1 billion collapse of Rick Stowe’s Griffin empire has hit the proposed 450MW Bluewaters 3-4 plant expansion at Collie.
Eneabba Gas maintains only its fully-permitted 168 MW Centauri 1 power plant could be delivered within 18 months of signing offtake agreements.
