Western Australia’s Strike plans gas-fired power plant

Australian independent Strike Energy plans to build and operate an 85MW peaking gas-fired power plant that could come on line by October 2026 near its South Erregulla operations in Western Australia (WA).

Strike applied to the Australia Energy Market Operator (Aemo) for capacity credits and network access to develop the power plant. It is targeting a final investment decision in November this year subject to Aemo's decision.

Gas supplies of around 1.3 PJ/yr (34.7mn m³/yr) would come from Strike's South Erregulla reserves. The power plant would be on land owned by Strike 280km north of Perth and around 15km of existing power transmission lines within the South West Interconnected System, the electricity network that covers Perth and the southwest region of WA.

The WA system will need around 3.9GW of new flexible gas-fired power capacity by 2042 to firm increasing renewable generation as the state exits coal-fired power generation, the state government said last year. It plans to close the two remaining state-owned coal-fired power plants by 2030, while the private-sector Bluewaters coal-fired power plant is expected to retire by 2030-31, according to Aemo.

Aemo has identified a supply shortfall of 391MW emerging in 2027-28 because of a progressive coal-fired power phase-out and increasing electricity demand. The shortfall could reach as high as 2.88GW by 2033-34, highlighting the need for continued capacity investment particularly from 2027 onwards, Aemo said in its latest electricity statement of opportunities for WA's Wholesale Electricity Market, which is not connected to east Australia's National Electricity Market.

Strike estimates total annual revenues of A$40mn-50mn ($26.6mn-33.2mn) for the gas-fired peaking plant over the first five years of operation, of which almost 40pc would come from payments under WA's capacity credit scheme. The plant would operate for over 25 years, with investment costs currently estimated between A$120mn-160mn.

By Juan Weik