LOL, Stryder...I have little doubt, that you would readily blame the Greens (and/or the Labs) for any and all price increases - regardless of the circumstances

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Oh I see that Equitist likes to deny any blame for the current price hikes of electricity that it simply has nothing to do with greens whats so ever, THATS WHAT HE LIKES TO BELEIVE obviously he has an explanation on why the greens cannot be blamed whats so ever.

Project Need & Justification

2.2.4 Meeting Peak Load Demand is acknowledged in the Government’s 2004 Green Paper, peak demand is growing much faster than average demand.

In NSW, summer peak demand has grown by around 3.8% per year for the past five years while base load growth has been significantly slower at around 2.8%. The Green Paper further notes that the trend toward ‘peakier’ electricity demand has significant cost implications for NSW consumers. Effectively 10% of NSW generation and network capacity is used for only 1 percent of the time.

If current growth trends continue, in 10 years time around 18 percent of generation capacity will be required for only 1 percent of the year.

In canvassing possible options, the Green Paper notes that “open cycle” gas-fired generation plant are more cost-effective in meeting peak demand and can be built in a relatively short timeframe. In the absence of a commercial gas supply, distillate-fired gas turbine technology can also be constructed quickly and offers the same market response advantages in a peak demand situation.

A peaking power plant such as that proposed by IPRA at Buronga effectively fills a “plant merit gap” in the NSW generation profile. Hitherto, NSW has generally operated coal-fired base load plant with peak demand met by hydro-generation from the Snowy Mountains plant or by electricity import from interstate. Drought conditions exacerbate the supply situation when hydro-generation is limited or curtailed by water shortages such as has occurred both in the Snowy region and Queensland.

The NEM-wide growth of peak demand has meant that the opportunity to import is rapidly decreasing and consequently market supply-demand mechanisms will drive up the cost of electricity and hence the market risk exposure of electricity retailers. Retailers hedge that risk by contracting with generators for the output of plant such as the facility proposed by IPRA at Buronga.

In contrast to a base load plant which runs most of the time to meet “core” electricity demand, peaking plants start and run only at times of very high demand or when there are system problems such as a base load generator suddenly tripping off or a transmission line failure.

Consequently, peaking plants generally run only over short periods of time on any one day and for a relatively small proportion of time on an annual basis with a focus on high demand periods during winter and summer on a seasonal basis.

Peaking power plants improve the reliability and maintain the quality of electricity supply during peak periods. They also improve the security of supply, due to a faster start-up time, should a transmission system emergency (instability or shutdown) occur.

Distillate fired gas turbines of the type proposed at Buronga still produce significantly less greenhouse emissions than traditional coal fired base load power plants. One environmental benefit of the plant proposed by IPRA is that generation at Buronga will alleviate the need for additional coal-fired plant to run when peak load demand problems create a regional capacity shortfall.

2.3 IPRA’s Proposal

2.3.1 The Proponent

The proponent is International Power (Australia) Pty Ltd (“IPRA”), a wholly owned subsidiary of International Power plc, a UK-based independent power generation and operation company with interests in 40 power stations in 18 countries around the world. International Power plc is listed on the London Stock Exchange and has a current market capitalisation in excess of A$11bn. Further information on International Power plc and IPRA is available on its website www.ipplc.com.

Since becoming established in Australia in 1996, IPRA has invested in excess of A$5bn and focused on becoming a leading player in the energy industry. The company owns and operates more than 3600MW of renewable, gas-fired and brown coal-fired generating plants in Victoria, South Australia and Western Australia. Its interests also extend across energy retailing (Energy Australia) and the (SEAGas) gas pipeline between Victoria and South Australia.

Table 2-1 illustrates the extent of IPRA’s Australian energy interests.

Asset Fuel / Type Gross Capacity MW Net capacity MW
Hazelwood, Victoria Coal 1,675 1,541
Loy Yang B Power Station, Victoria Coal 1,026 718
Synergen Peaking Units, South Australia Gas/Distillate 371 371
Pelican Point Power Station, South
Australia Gas (CCGT) 487 487
Canunda Wind Farm, South Australia Wind/renewable 46 46
Kwinana Power Station, Western Australia Gas (CCGT) 118 58
SEA Gas underground pipeline n/a n/a n/a
Simply Energy n/a n/a n/a
3,723 3,221
Table 2-1 IPRA Australian Energy Assets

(Source: IPRA, 2006)

IPRA employs around 750 personnel across its national business and is an innovative and proactive company, highly regarded in the industry as a project developer and as an energy asset operator.

In addition to its plans for the proposed Buronga Peaking Power Plant Project, IPRA plans to invest in additional peaking power plants in NSW - at Parkes in the central west of the State and at Herons Creek on the mid north coast. Project Applications have been submitted for both of these other proposals.