Power generation, Projects

Newly commissioned power stations defy industry trends

Jointly developed by AGL Energy and APA Group, the Diamantina Power Station is a modern, high-efficiency power station comprising 242 megawatt (MW) power generation from combined-cycle gas turbines, with 60 MW back-up power supply available from the Leichhardt Power Station open-cycle facility.

Working in tandem, AGL Energy supplies the natural gas fuel source for Diamantina, which is then delivered to site by APA Group’s Carpentaria Gas Pipeline from Ballera in south west Queensland to the Mount Isa region.

Mr Jones says APA set about developing an alternative power generation solution in the region as peak demand on the North West Power system network was approaching capacity and projections indicated that additional capacity was required to meet future mining demands.

At the time, another consortium was proposing a 1,000 km transmission line connection to the east coast.

“APA needed to source gas for Diamantina and AGL was keen to increase its presence in the Mount Isa region, so it was prepared to contract to Diamantina as part of a joint venture with APA,”? says Mr Jones.

Connecting and engaging Mt Isa

The power station facilities were designed to deliver a cleaner source of power generation for Mount Isa with lower emissions and higher plant efficiencies than traditional coal-fired power plants.

Mr Jones says there were no environmental issues during the construction and subsequent operation of the power station.

“The Diamantina Power Station meets all the environmental requirements as listed under the Development Approvals and the latest mono-nitrogen oxides technology ensures emissions levels meet current best industry practice.”?

Further, Mr Jones says the Diamantina Power Station will use 30 per cent less water than the power station that used to service the Mount Isa region.

The Diamantina Power Station has also provided the local Mount Isa community with employment opportunities, with the site averaging up to 350 people per day at the peak of project construction. Around 5,000 people in total passed through the entrance turnstile and almost two million hours of work have been undertaken.

Community consultation was also a cornerstone of the project, with an awareness campaign delivered through community forums, sponsorships and representation at the Mount Isa Mining Expo.

Construction challenges

The construction of the two facilities wasn’t without its challenges, however.

Mr Jones recounts: “Our turn-key operator at Diamantina went into voluntary administration during the construction phase. Fortunately, we were able to transition to a new operator without losing any construction days.”?

That aside, a key achievement was unlocked when APA successfully commissioned Diamantina in October last year.

“There were a number of milestones on the project. Generation with two gas turbines operating in open-cycle commenced in January 2014 while construction activities were in full swing. The next milestone was the completion of the Leichhardt Power Station in July 2014 followed by the completion and operation of the first combine cycle load block in August 2014,”? says Mr Jones.

Although the outlook for gas-fired power generation has been gloomy in recent years, what with the sharp decline in power demand and the upward surge of renewable energy sources, Mr Jones believes gas-fired power generation is still a “very competitive offering from a reliability and pricing perspective in remote areas”? such as Mount Isa.

There is even scope for further expansion of the two power stations as energy demands increase in the region.

“This is despite the gas market being subjected to considerable volatility due to the emergence of the LNG market in Australia. Diamantina and Leichhardt are competitive even in the high gas price environment, and we believe they play a very important role in the future supply of power to the Mount Isa region.”?

Mr Jones says APA is looking to further invest in gas-fired power generation in areas where it believes it can earn a fair commercial return.

“One particular benefit of our investment in Diamantina and Leichhardt is that they drive improved performance on our existing infrastructure. We would consider further opportunities where there is a demand for power generation assets and where we have a presence via our infrastructure.”?

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