Proposed Kurri Kurri gas station deemed ‘critical’ by NSW government

The NSW government has declared the proposed Kurri Kurri gas generator “critical” state infrastructure in a major step forward for the project.

A proposed new gas-fired power station has been deemed “critical” state infrastructure by the NSW government in a major step forward for the project, which the Commonwealth has vowed to build if private industry won’t.

Planning Minister Rob Stokes has made a new order to declare the proposed Kurri Kurri gas generator “significant and critical” state infrastructure, paving the way for its construction and operation at the former aluminium smelter site.

The NSW Government has also green lit the gas station to produce up to 750 megawatts of energy, which would mean the project could almost single-handedly fill the shortfall in dispatchable power expected to hit the east coast market when the Liddell coal-fired power station closes in 2023.

NSW Minister for Planning Rob Stokes. Picture: NCA NewsWire/Bianca De Marchi

The federal government has demanded energy companies create 1000MW of dispatchable power by the time Liddell shuts to ensure prices do not skyrocket for consumers.

The demand was sparked by concerns the energy sector was overly focused on building wind and solar farms, which would not fully replace Liddell.

If energy companies do not come up with a plan to create 1000MW of power in time for 2023, the Commonwealth has threatened to intervene directly in the market and have Snowy Hydro build the Kurri Kurri gas station.

The government has set an April deadline for a decision on Kurri Kurri.

Energy Minister Angus Taylor said the government set a 1000MW dispatachable power generation target in NSW to offset the projected increased electricity costs once the Liddell station closes.

Liddell Power Station in Muswellbrook in 2018. Picture: AAP/Dan Himbrechts

“Energy prices are coming down however the AEMC’s findings that NSW annual electricity bills could rise following the closure of Liddell is again showing that we need to get new dispatchable generation up and running in NSW before Liddell exits,” he said.

“The Government is already preparing to step up if the energy companies don’t, with Snowy Hydro securing critical state significant infrastructure status for their proposed Kurri Kurri gas generator.”

The latest AEMC price findings showed wholesale prices could skyrocket, echoing a report by the Liddell Taskforce which found costs could jump by up to 30 per cent to $80 per MWh if the coal-fired power station was not replaced with sufficient dispatchable capacity.

It follows concerns raised by the federal government that the NSW energy road map rushed through parliament late this year would prematurely disincentivise investment in new dispatachable sources of power.

Since the road map was unveiled, AGL has taken a step back from its proposed investments in the Newcastle Gas Peaker and Liddell Battery.

Originally published as Proposed Kurri Kurri gas station deemed ‘critical’ by NSW government