Australia to Build New A$600M Gas Plant for Start-Up in 2023


Australia will spend A$600 million ($468 million) to build a new gas power plant that it says will help reduce emissions, as the nation’s aging coal-fired plants shutter and pressure increases on Prime Minister Scott Morrison’s government to do more to combat climate change.

The government’s Snowy Hydro Ltd will construct a 660 megawatt open-cycle gas turbine at Kurri Kurri in the Hunter Valley region of New South Wales state, Energy Minister Angus Taylor said in a statement.

The project “will help shore up the security, reliability and affordability of electricity for consumers” in the state, and will be in operation by the end of 2023 as the Liddell coal-fired plant closes, Taylor said.

The announcement comes as international pressure mounts on Australia, one of the world’s biggest fossil fuel exporters and per-capita emitters, to commit to a hard target to reach net-zero emissions. The nation is generally considered a climate laggard, even as some of its biggest markets -- China, Japan and South Korea -- express increased ambition to combat climate change.

A study by the energy market operator last year found that the flood of renewables coming into the grid meant there was less need for a like-for-like replacement for Liddell. Still, it also identified a potential “gap” in system needs following the plant’s closure that could be filled by a combination of solar, grid-scale batteries and gas turbines.

The Australia Institute, a progressive think tank, on Wednesday described the funding for the new gas plant as “a waste of public money.”

“How bad is the business case for Kurri Kurri if Snowy Hydro needs the entire A$600 million capital cost covered by taxpayers?,” said Richie Merzian, the institute’s climate and energy program director.

EnergyAustralia Pty, which is owned by CLP Holdings Ltd, is also proceeding with a 300-plus megawatt expansion project at its Tallawarra gas-fired power station in New South Wales, after announcing an agreement with the state government earlier this month.

©2021 Bloomberg L.P.

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