As existing coal-fired assets reach the end of their natural service life, companies like AGL are faced with the question of how to replace the existing generation capacity with technology that meets the requirements of an evolving energy market. We spoke to David Johnson, AGL’s General Manager Development and Construction, to learn a bit more about the process the company goes through
when designing and developing new assets.
In July 2017, AGL announced a $295 million investment to develop a 210MW reciprocating engine power station, the Barker Inlet Power Station (BIPS). This station will sit alongside AGL’s Torrens Island Power Station site, 18km from Adelaide’s CBD.
The BIPS will comprise 12 reciprocating engines capable of generating approximately 18MW of output each. The engines operate at high efficiency and with a lower heat rate than other forms of fast-start plants currently available. The station will also be capable of operating at full capacity within five minutes, providing a rapid response to changes in renewable generation supply.
The BIPS will replace two of the four Torrens A turbines, which AGL will progressively mothball from September 2019. AGL also has development approval to build an identical BIPS Stage 2 which would replace the remaining A Station units, although at this stage, no decision has been made to commit to stage 2. This decision may be taken following further assessment of the electricity market in South Australia. The four Torrens B generating units will continue to operate as normal.
As South Australia increases its renewable energy generation, sites like Barker Inlet are an important part of the energy mix. Given the importance of this site to the South Australian market (and indeed the national electricity market), we were keen to talk with David Johnson about the process the company went through in designing and developing this new asset.
“Torrens A Station turned 50 years old in February 2018, which is quite old for a thermal power station,” said Mr Johnson.
“It has reached the end of its economic life and is being retired in a planned and structured way. The BIPS project will use 12 dual fuel (natural gas and diesel) low speed reciprocating engine generator sets, each rated at 17.6MW with a total station output of 210MW.”
The engines are manufactured by Wartsila Oy of Finland. Wartsila has been contracted to deliver the entire power station under a turnkey contract based on their established plant design installed across the world.
When it comes to selecting the equipment and suppliers AGL will work with for its large-scale projects, the assessment process is naturally quite complex.
“During the assessment process, we considered a range of aeroderivative gas turbine and reciprocating engine generating plant configurations,” said Mr Johnson.
“After assessing a wide range of factors, reciprocating engines were deemed to be the best outcome for the BIPS project for theSouth Australian electricity market.”
Some of the features that led the team to opt for reciprocating engines included:
- Very flexible operation
- Fast start to station full load
- High turndown ratio
- Capable of frequent starts without additional maintenance costs
- High efficiency (significantly better than gas turbines)
- Lower fuel costs and carbon dioxide emissions
- Lower total project capital cost
The construction contract between AGL and Wartsila allows AGL’s BIPS project team to work very closely with Wartsila to review the power station detail design and to monitor the construction and testing of the plant. AGL negotiated a comprehensive set of technical specifications based on Wartsila’s proven power station design.
According to Mr Johnson, the BIPS project is based on a Wartsila standard plant configuration that has been installed in many parts of the world, particularly into relatively weak networks and large mine site applications. More recently, Wartsila has been selling the same power plants into applications to support wind farm output and for network support, taking advantage of their very flexible and fast response capability. These applications are comparable to the power network in South Australia.
Working with AGL
As part of a large operator in the national energy market, Mr Johnson has plenty of useful advice for service and equipment providers looking to work with businesses such as AGL.
“It’s important to look to align your values associated with project delivery with those of AGL, and understand the key market drivers associated with the particular project,” said Mr Johnson.
He also advises that companies should expect that AGL will take an active role overseeing the project delivery to ensure a high-quality outcome.
“AGL will expect to work with the contractor during project execution to review and optimise the project outcomes, particularly in the areas of safety and environment,” he added.
“When it comes to power plants specifically, be clear about the expectations for the operating requirements for the plant, such as peaking or intermediate load, as well as the value of starting flexibility and the real value of efficiency over capital cost,” noted Mr Johnson.
Mr Johnson also advised that potential suppliers be aware of the fact that AGL will always be mindful of balancing capital and operating costs.
“Capital and operating costs are assessed in an economic model encompassing the lifetime of the project to determine the project returns against internal hurdle rates,” said Mr Johnson. “The operating profile forecast for the plant is a key input into this analysis which will weight the outcome in favour of capital cost or operating cost.”
Energy efficiency is also important to AGL, as it provides both economic and environmental benefits. In the commercial evaluation of a project, efficiency is balanced against capital and other costs when considering the overall project life economics.
Building the BIPS
The BIPS is now almost halfway through the construction process, which is employing 200 people throughout the project.
Ultimately, the BIPS will deliver more reliable, dispatchable power to the National Electricity Market, and it will be 28 per cent more efficient than the Torrens A Station units it is replacing.
“This will deliver gas savings of the same order, reducing costs and lowering emissions,” noted Mr Johnson.
It is expected that the plant will be operational in September 2019.