Pacific Energy has signed a $7.5 million agreement to acquire the 10MW Nova gas-fired power generation plant (Nova) in Traralgon, Victoria.

Nova was commissioned in 2014 as a high-efficiency/low emissions gas-fired power station to generate quick response to electricity demand in peak periods, funded partially by the Clean Energy Finance Corporation.

The plant operates when the spot price of electricity exceeds the cost of acquiring gas plus an R&M allowance. With technology delivering lower emissions than traditional coal-fired power generation, Nova provides a cleaner form of electricity directly to the Traralgon network.

The Nova site has an ability to expand, with gas supply infrastructure in place to fuel a 20MW plant, subject to augmenting existing grid connection infrastructure. The company has also identified other opportunities to enhance the power supply facilities at the two hectare site, with opportunities for battery storage technology and gas storage technology to be investigated.

Pacific Energy’s Managing Director, Jamie Cullen, said, “This is an exciting opportunity to expand our presence in the National Electricity Market, where there is clearly significant focus at present.”

“With the Federal Government’s new policy aimed at reliability as well as emissions, Nova represents a well-timed and affordable acquisition of a strategic asset that can be expanded to capitalise on opportunities in the NEM. We will be developing an optimisation plan for the site which will include consideration of battery and gas storage as well as potentially entering into long-term capacity contracts.”

Mr Cullen said that Nova was not expected to have a material impact on FY18 results as the company would spend the initial period after completing the acquisition developing its asset optimisation plan and finalising its strategy utilising latest technology.

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