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In an unprecedented move, the Federal Government has decided to go forth with plans to build a $600 million gas power plant in the Hunter Valley, replacing the Liddel coal power plant that is set to close in April 2023.

The decision has come after Prime Minister Scott Morrison gave the energy sector an ultimatum in 2020, telling the industry to deliver 1,000MW of new dispatchable energy by 2023 or face the prospect of the government building it’s own state-run gas generator. 

The Federal Government has now come good on this threat, committing $600 million for Snowy Hydro Limited to construct a 660MW open-cycle gas turbine at Kurri Kurri in the Hunter Valley.

The Government’s Liddell Taskforce found closing the plant without adequate dispatchable replacement capacity risked prices rising by around 30 per cent over two years, or $20 per MW hour to $80 in 2024. 

According to the Government, the Hunter Power Project will deliver an economic boost to the region, creating up to 600 new jobs during peak construction and 1,200 indirect jobs across NSW.

This project, together with EnergyAustralia’s 316MW Tallawarra B open cycle gas plant, will help shore up the security, reliability and affordability of electricity for consumers in NSW, with a commitment to be generating in time for summer 2023-24, after Liddell closes.

Federal Minister for Energy and Emissions Reduction, Angus Taylor, said the Government had given the private sector every opportunity and is fulfilling its promise to deliver cheap, reliable power that NSW households, businesses and industries need to prosper. 

“Cheap power is crucial to ensuring families, businesses and job-creating industries in NSW can thrive, which is why we are committed to replacing the energy generated by Liddell to keep prices down,” Minister Taylor said.

“This important project is good news for NSW as well as the broader National Electricity Market. 

“We were very clear from the start – 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 and maintain reliable power alongside Australia’s world-leading investment in renewables.”

Industry reaction to the Hunter Valley Project has been mixed, with the clean energy council referring to the project as “unhelpful and unnecessary”.

Clean Energy Council Chief Executive, Kane Thornton, believes the decision is “reckless and undermines Australia’s efforts to deliver lower-cost power and reduce emissions”.

“Government intervention to directly build their own high-cost generation is not only a poor use of taxpayer funds but also further undermines investor confidence in the new generation. In the Clean Energy Council’s most recent survey of CEOs of Australia’s leading renewable energy investors, after challenges with the grid, ‘unpredictable or unhelpful government intervention in the energy market’ rated as the second most significant challenge,” Mr Thornton said. 

For more information on the Hunter Valley gas power plant, click here

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