LATE on Thursday afternoon, energy company AGL issued a notice to the stock exchange, confirming it is planning to go ahead with gas-fired power station in the Hunter Valley.
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The official language was “somewhere near Newcastle”, but when word was confirmed that AGL chief executive Andy Vesey would be making his formal announcement – with a state MP or two – at Tomago, the potential site for the power plant was soon narrowed down. AGL has since confirmed it is looking at three sites in the area, which is close to what must be its biggest customer in NSW – the Tomago Aluminium smelter – and an AGL gas facility.
AGL’s NSW coal-fired power stations, Liddell and Bayswater, come from its 2014 purchase from the NSW government of Macquarie Generation. MacGen, as it was known, had a substation on Old Punt Road, Tomago, and it was this site, back in 2003, that was fixed on as the best place for an earlier gas turbine that MacGen had proposed as a “peaking” plant to deal with short bursts of very high demand, blamed at the time on a rapid uptake of household air-conditioners.
That plan never went ahead but now, 15 years later, AGL is going down a similar path.
While the fundamentals of “peaking” plants remain the same – they are there to supply that extra bit of power at the top of the demand curve – the power market itself has changed fundamentally.
A decade ago, the main concern, in government eyes, anyway, was baseload capacity. The Iemma government’s Owen inquiry into the electricity market, which preceded the privatisation of the NSW power industry, was more about meeting demand than managing emissions environmentally.
But all of that has changed. Although those who believe renewable energy has the capacity to power a modern Australian grid believe the Turnbull government’s National Energy Guarantee does not go far enough, it does recognise that the electricity industry has a lot to do to lower its emissions footprint. It also recognises that solar and wind power, especially, can provide large amounts of “fuel-free” energy and that coupled with battery technology and gas-fired turbines, such a system can go a considerable distance to reducing our reliance on coal.
And the first stage of 252 megawatts may well be just a start.
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