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Gas to the fore after Liddell power station closure

Gas to the fore after Liddell power station closure

NSW is set to double its gas-fired power generation capacity and is on track to exceed the amount of dispatchable capacity needed to meet demand after the expected closure of the Liddell power station in 2022.

The number of gas-fired power stations due to come on line has led NSW Resources and Energy Minister Don Harwin to proclaim gas is the way to address energy woes that are concerning industry, arguing the gas projects will be secured by the certainty of the national energy guarantee.

Mr Harwin’s comments indicate that the NSW government believes the state can get by in terms of energy supply without a new coal-fired power station.

The additional gas generation being developed in NSW comes as federal Coalition MPs have been told that a plan to bring on extra base-load power through either new coal or gas is being drafted by Energy Minister Josh Frydenberg as an “add-on’’ to the NEG.

A March report by the Australian Energy Market Operator, “Advice to the Commonwealth relating to AGL’s proposal to replace Liddell”, said NSW required 850 megawatts of additional dispatchable capacity to meet demand after the Liddell closure, expected in four years.

But Mr Harwin told The Australian: “NSW has over 2000MW of gas projects either proposed or in the planning system, which is in addition to the 2000MW of gas-powered electricity generation already in service.”

He said the additional 2000MW of proposed gas generation was more than double the AEMO’s estimate of required dispatchable generation.

“The NSW government is taking a sensible approach to ensuring a reliable and affordable energy future. Gas will be an important element in the future because of its quick ramp-up capabilities.’’

He said the NSW government had recently provided a critical state-significant infrastructure declaration for Australian Industrial Energy’s proposed liquefied natural gas terminal at Port Kembla.

“This project could supply 70 per cent of NSW’s gas needs, as well as placing downward pressure on gas prices,’’ Mr Harwin said.

Andrew Forrest’s venture AIE has raised the possibility of developing a gas generator near the Port Kembla LNG terminal.

Advice to the government suggests gas has the ability to respond faster than coal generation in both a “cold start” and “ramping up and down” to meet electricity demand.

The AEMO forecasts a maximum demand of about 14,000 MW in the medium term. This is about the same as the historical maximum demand.

The 2000MW of additional gas generation capacity would supply about 14 per cent of NSW ­electricity needs during a peak event.

The Australian

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