Solar and gas a threat to Gladstone's power station

WITH demand for electricity dropping and an increase in use of solar, Gladstone's power station has major challenges to ensure employees can keep their jobs.

GLADSTONE's power station has a fight on its hands to stay relevant and competitive.

With demand for electricity dropping, an increase in the uptake of solar and new options for gas, the "sluggish, coal driven power station" has major challenges to ensure employees can keep their jobs.

In the past two years the power station has decreased its staff through natural attrition - with "organisational changes" meaning numbers could drop to as low as 245 people on site. That is 100 people less than in 2013.

According to general manager John Abbott, the power station does have options to run for another 30 years.

But to do that, his company needs to remain competitive in the marketplace.

He said over the past five years the demand for electricity had fallen "far short" of what predictions had been.

"The current demand in the market is very unpredictable and some of the things we've seen this year certainly don't match anything we were expecting last year," he said.

Mr Abbott said the new State Government manifesto showed it was looking for another 2000-3000 megawatts of solar power into the grid over the next five years.

"When they're generating rooftop solar it doesn't cost the individuals money, so it affects demand," he said.

"But it goes on and off when the sun comes up and down, and that's hard for a coal-fired power station to manage."

"Whatever prediction we make (about the market and power prices) will be wrong, which makes planning difficult for us."

Mr Abbott was talking about the company's position in the Gladstone supply chain to the Gladstone Engineering Alliance Panel of Procurement last week.

It was a bleak message for those wanting to tender.

"We have a challenge to minimise our cost base because no matter what the market faces us, the lower our cost base the better we're able to play in that market," Mr Abbott said.

"We look for competition in the national market for our supplies."

He said while buying local did provide advantages to his company, there were also considerable cost savings to be made looking out of town.

"If I use 20 as the lowest base cost quoted locally I was able to get that work done for 5 including materials out of Brisbane," he said.

"That is the challenge you, as local players, have for our business."