BHP prefers gas to a recharged Port Augusta

SOUTH Australia’s biggest energy consumer has all but ended an ambitious plan by a Queensland entrepreneur to fire up the defunct Northern power station in Port Augusta.

UP IN SMOKE: A push to restart the Northern power station in Port Augusta appears over. Picture: Roger Wyman.

SOUTH Australia’s biggest energy consumer has all but ended an ambitious plan by a Queensland entrepreneur to fire up the defunct Northern power station in Port Augusta.

At the same time BHP ruled out any deal with Brisbane-based Trevor St Baker, the miner’s Olympic Dam asset president Jacqui McGill revealed that it had entered into an arrangement with a local gas generator.

“We have had discussions with proponents potentially looking to restart the Northern power station,” Ms McGill said yesterday.

“However, after substantial consideration we found our needs were better met by entering a supply arrangement with an existing gas generator in SA.”

It is understood BHP entered into an agreement with Pelican Point operator Engie in July, soon after SA’s biggest employers came close to costly shutdowns because of skyrocketing electricity prices. Underpinned by the BHP deal, Engie brought around 240MW online.

At the time, Mining and Energy Minister Tom Koutsantonis was forced to intervene in the market for the first time since ETSA was privatised.

Trevor St Baker at Braemar power station near Dalby in Queensland.

Last month, Mr St Baker made the case for his Sunset Power International to take control of the Northern power station, which was switched off by owner Alinta Energy in May.

He has said that a long-term contract with BHP is all he needs to make the plan commercially viable.

“We are able to close the deal (with Alinta), and halt the demolition (of the Northern power station) until after summer if we can get BHP to step up to a 40 per cent lower wholesale priced contract — as a core interested South Australia business customer — without further delay,” Mr St Baker told The Advertiser.

Mr Koutsantonis said if Mr St Baker can come to terms with Alinta to purchase the power station, the State Government would not stand in the way — provided there is no request for taxpayers’ money.

“The State Government will not make capacity payments for generators to operate — that would open a flood of requests from all other generators in SA,” he said.

Last month, Arrium’s administrator KordaMentha revealed that it had entered into a fixed power contract to avoid volatile prices within the SA electricity market.

“We don’t want any volatility around pricing so we can deliver a product at best-practice cost,” administrator Mark Mentha said.

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