PM Scott Morrison picks four SA energy projects for potential federal support

More than a billion dollars of investment in energy projects in South Australia are on a short-list for underwriting by the federal Government.

More than a billion dollars of investment in energy projects in South Australia are on a short-list for underwriting by the federal Government.

Three of the four proposals are for pumped hydro — at Lincoln Gap and Middleback Ranges on the Eyre Peninsula, and Baroota near Port Pirie.

A $450 million gas-diesel project by Alinta Energy at Reeves Plains, 12km southeast of Malalla, is also through to the next stage of assessment.

Prime Minister Scott Morrison in Canberra on Tuesday. Picture: AP Photos/Rod McGuirk

Prime Minister Scott Morrison on Tuesday announced a nationwide shortlist of a dozen projects — including a NSW coal plant — which could boost supply and lower prices.

Mr Morrison said the 12 projects, reduced from 66 applicants, could deliver nearly 4000MW, which was about twice the size of current coal-fired power stations like Liddell in the Hunter Valley, NSW, which is slated to close in 2022.

“They’ll be able to present their case, these 12 projects, for us to form a position on using the underwriting mechanism that was recommended by the Australian Competition and Consumer Commission,” Mr Morrison said.

The $480 million Middleback Ranges project proposed by SIMEC ZEN Energy would take advantage of the iron mines bought by businessman Sanjeev Gupta as part of acquiring the Whyalla’s steel works.

“We’re very excited to be included,” SIMEC Energy chief executive Marc Barrington said.

The Middleback Ranges project has been proposed by SIMEC ZEN Energy and would take advantage of the iron mines bought by businessman Sanjeev Gupta as part of acquiring the Arrium assets centred on Whyalla.

The Baroota project, led by Rise Renewables, would use the old reservoir in the Lower Flinders Ranges, 40km northeast of Port Pirie, to generate up to 270MW.

The Lincoln Gap pumped hydro project proposed by Sunset Power and allied company Delta Electricity, would generate 230MW of power for up to eight hours.

Delta Energy executive Steve Gurney said costs were still being calculated but there would be a “natural synergy” with the neighbouring wind farm which is separately owned.

Alinta, which owned the Port Augusta power stations, wants to re-enter the generation market in SA.

Its 300MW Reeves Plains project already has State planning approval.

A spokesman said Alinta was looking forward to working with the Federal Government on underwriting.

The underwriting project is intended to deliver projects which generate electricity at 25 to 30 per cent below current wholesale prices.

The government excluded proposals from companies which already hold significant market share.

As the proposals are for underwriting rather than grants or subsidies, the government has not announced a financial envelope for the four-year project.

The short-list was for:

SIX pumped hydro projects

FIVE gas projects

ONE coal upgrade project at Lake Macquarie in New South Wales

“There is no commitment to underwrite or support any of those projects,” Mr Morrison said of the short list.

“Wherever it comes from, we just want what is going to provide for the reliability that is necessary.”

In addition to the short-listed projects, Mr Morrison announced a $10 million study into energy projects for Queensland.

These would include a coal project in Collinsville as well as gas and hydro.