gas power plant

The Federal Government has progressed two projects to agreement of key initial support terms as a part of their Underwriting New Generation Investments program (UNGI).

APA Group’s proposed 220MW gas generator in Dandenong, Victoria and Quinbrook’s proposed 132MW gas generator, in Gatton, Queensland, are the first two projects selected from the shortlist.

Minister for Energy and Emissions Reduction, Angus Taylor, said the projects are well advanced, have demonstrated financial viability and would secure the grid and put downward pressure on prices.

Mr Taylor said, “We are taking action to bring power prices down and keep the lights on.

“We’re delivering immediate relief through our new price safety net and banning sneaky late payment fees but we’ve also got our eye to the future with projects like these.”

APA Group’s gas generator was selected to supply fast-start, reliable generation to balance the significant increase in intermittent renewables in Victoria. 

Rob Wheals, APA Group CEO, said, “The agreement of key initial support terms to underwrite the Dandenong Power Station Project will assist in accelerating the delivery of more reliable and dispatchable electricity to market.

“We look forward to continuing to work with the Federal Government and its key agencies to progress this important project.”

Quinbrook’s gas generator project will provide new capacity to help meet peak periods in both Queensland and New South Wales, increase competition and compliment the Federal and NSW Government’s QNI interconnector upgrade.

“We are working to deliver an energy system that isn’t a roadblock to businesses growing and employing more people and that isn’t stinging family hip-pockets,” Mr Taylor said.

“The Government will now enter detailed underwriting and contractual negotiations with the project proponents ahead of their financial investment decision.” 

The selection of the two projects was based on expert advice and careful consideration of the potential impacts. Consideration included the stage of development, the financial viability and the benefit to energy market customers of the projects.

Final agreement is expected to be reached in 2020, with construction to commence shortly after the projects secure private sector finance.

Electricity supply is precarious in some states, with blackouts in Victoria, New South Wales and South Australia over the last three summers. Victoria has a real risk in the summer of 2019/20 of being exposed to more blackouts and very high prices because of their projected reliability gap.

Through UNGI, the Retailer Reliability Obligation and the $1 billion Grid Reliability Fund, the Commonwealth is providing targeted support to unlock new investment in the reliable generation needed to increase competition, keep the lights on and bring prices down.

These initiatives fall within the Government’s A Fair Deal on Energy policy and will aim to contribute to meeting the $70 per MWh price target and maintaining and increasing reliable supply of electricity.

View the Government’s energy policy blueprint here.

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