Increase the MRET - business will follow!

The Age

AGL to build $230m power plant


September 18, 2006 - 3:35PM


The Australian Gas Light Company (AGL) is set to build the country's largest hydroelectric power plant in 25 years in Victoria's Alpine region.

Australia's biggest energy retailer today said the $230 million plant - to be opened at Bogong by October 2009 - would provide extra peaking electricity generation capacity for the state, and boost the amount of so-called zero emission electricity the company produced.

About 200 jobs will be created by the project, which AGL decided to develop following the Victorian government's recently-announced plans to introduce a Renewable Energy Target Certificate (VRET) scheme.

The scheme, to be introduced in 2008, requires energy retailers to buy at least 10 per cent of their electricity from renewable sources by 2016.

"AGL is encouraged by the Bracks' government's sensible approach to the development of a renewable energy industry in Victoria," AGL chief executive Paul Anthony said.

Mr Anthony said the 140-megawatt plant, which would only run when demand for power peaked, would help Victoria meet its power needs.

"This development will deliver important strategic benefits to AGL's wholesale energy portfolio and through its fast start-up capabilities, will also help meet Victoria's electricity demand during peak periods," he said.

AGL will also commission the nearby Banimboola hydroelectric power station, with an output of 12.2 megawatts, at a cost of $24 million.

The Bogong station is expected to be ready for the peak summer demand of 2009/10, and together the plants will make enough electricity to meet the summer demand of about 122,000 average homes.

In full production, they will cut greenhouse gas emissions by more than 185,000 tonnes annually, AGL said.

The privately-owned McConnell Dowell Constructors and Toshiba International have been contracted for the Bogong project, while GE and Baulderstone and Hornibrook have been appointed for Banimboola.

The new plant will bump up the hydro component of AGL's wholesale power business by five per cent, and the company said almost half of the portfolio now produces zero emissions.

AGL Energy, which will be created through the planned merger of AGL's infrastructure business with that of Western Australian utility Alinta Ltd, will own the assets.

AGL and Alinta shareholders are due to vote on the merger next month.

AAP