New $600m Kurri Kurri gas plant to replace Liddell coal power station
A gas plant in the Hunter Valley has divided the Labor party with local MPs supporting the proposal despite opposition federal energy spokesman Chris Bowen condemning it.
NSW
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A gas plant in the Hunter Valley has divided the Labor party with local MPs supporting the proposal despite opposition federal energy spokesman Chris Bowen condemning it.
Hunter MP Joel Fitzgibbon and Patterson MP Meryl Swanson have backed the Morrison government’s plan to fund a $600 million gas power station at Kurri Kurri, after it was criticised by Mr Bowen.
The plant will be built in Ms Swanson’s electorate, who said the government needed to “get on and build it as quickly as they can”.
Mr Fitzgibbon also threw his support behind the gas plant describing it as “unequivocally” a good idea.
“We have a capacity gap, a generation gap, that now must be filled and filled very quickly,” he said.
“(The gas plant) will create jobs, it will fill the supply gap, and of course, it will put downward pressure on energy prices.”
The local MPs’ comments are completely at odds with Mr Bowen who described the government’s decision to invest taxpayer money into gas as “policy failure”.
“It’s a vote of no confidence from the private sector, which hasn’t been able to invest, because this government has got energy policy so wrong,” he said.
Mr Bowen said Labor supported a “role for gas” in firming and peaking energy supply as the country moved to a “more renewable economy”.
“But this is not what this proposal is about,” he said.
“This proposal isn’t justified by the economics.”
Energy and Emissions Reduction Minister Angus Taylor said Labor needed to “make up their minds” because the government wanted the project to go ahead.
“We want it to be bipartisan without hiccups along the way,” he said.
“It must be in place by 2023 and it must be in place to ensure that we don’t see that spike in prices or loss of reliability that is so important to people right across NSW.”
The 660 megawatt gas plant would only be used to provide an instant supply of energy during peak demand to cover the expected shortfall when the Liddell coal fired power station closes in 2023.
$600m gas plant to be built in the Hunter
A new $600 million gas-fired power plant will be built in the Hunter Valley by the federal government to drive down NSW electricity prices and prevent shortages following the closure of a nearby coal-fired station.
The government-owned company Snowy Hydro Limited has been given the funding to construct a 660 megawatt open-cycle gas turbine at Kurri Kurri in the Hunter Valley, to avoid “unacceptable” price increases expected to hit when the Liddell Power Station in Muswellbrook closes in 2023.
The gas power station is also expected to create up to 600 new jobs during the peak construction, and will support 1200 indirect jobs across NSW in the longer term.
In September, Prime Minister Scott Morrison gave the private sector an ultimatum to either progress plans to replace Liddell with 1000MW of “like-for-like” dispatchable power, or the government would.
The threat followed concerning independent modelling that indicated average wholesale prices in NSW could rise by 30 per cent to about $80 per MW hour in 2024 if Liddell closed without replacement.
The Kurri Kurri project, together with EnergyAustralia’s proposed 316MW Tallawarra B gas plant, will now effectively meet the government’s target.
AGL had announced several projects as part of a replacement plan, but only its 100MW upgrade to an existing generator at Bayswater had reached a final investment decision by the government’s deadline. Mr Morrison told The Daily Telegraph it was “vital” NSW had access to new “reliable and affordable” power generation beyond Liddell.
“Without covering this shortfall left by Liddell, households, families and jobs across NSW will be held hostage to higher electricity prices and an unstable grid,” he said.
“Last September, I made it crystal clear that if the big energy companies did not take action to fill this gap, then the commonwealth, through Snowy Hydro, would take the necessary action.”
Mr Morrison said the government was “stepping up” to protect consumers and boost jobs, while supporting the “better integration of renewables into the electricity grid to drive emissions down”.
“We’re creating more local jobs in the Hunter while supporting cheaper and reliable energy for local businesses across NSW,” he said.
The Daily Telegraph previously revealed funding for the gas station had been accounted for in the 2021-22 Budget under “decisions taken but not yet announced”.
Federal Energy and Emissions Reduction Minister Angus Taylor said: “We will not stand by and watch prices go up and the lights go off.
“This project will deliver flexible gas generation to replace Liddell.”
According to the federal government, expected investment returns on the project are “strong” and Snowy Hydro is “on track” deliver the build on time.
Originally published as New $600m Kurri Kurri gas plant to replace Liddell coal power station
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