West Australia Expands Power Grid 10% With New Gas-Fired Plant

By Jason Scott

Nov. 7 (Bloomberg) -- Western Australia's power grid will expand 10 percent today as NewGen Power, a partnership between ERM Power and Babcock & Brown Power, starts up a 320 megawatt gas-fired station.

The combined-cycle plant, in the industrial area of Kwinana about 40 kilometers south of Perth, cost A$800 million ($531 million), NewGen said in a statement on its Web site. The plant was built seven weeks ahead of schedule and under budget, it said.

Output from the station, which produces electricity from both gas and steam, is contracted to Western Australia's biggest electricity retailer, government-owned Synergy. The gas from the Woodside Petroleum Ltd.-operated North West Shelf venture will be delivered to the plant through the Dampier to Bunbury Natural Gas Pipeline.

The plant harnesses steam produced from waste heat generated by its gas-fired system to run a steam turbine. ``Which means we are able to produce more power using less fuel, and significantly reduce the greenhouse gas emissions from the project,'' NewGen said.

Western Australia's electricity supplies were cut 30 percent after a June 3 explosion at an Apache Corp.-owned plant in the state's north-west. Apache has resumed 70 percent of the natural gas output at Varanus Island, with the rest due back on- line in December.

``One of the state government's primary objectives this year is to improve power reliability across the state,'' Western Australian Energy Minister Peter Collier was quoted as saying in the statement. ``The Kwinana power station is an integral part of this initiative and will bring much-needed additional capacity to meet Western Australia's electricity requirements.''

Brisbane-based ERM is a privately held company that has developed six power stations in four Australian states. Babcock & Brown Power, the Australian electricity producer whose shares have sunk 95 percent in the past six months, has interests in 12 operating stations.

To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net