AGL Energy Limited Progresses with Major Power Generation Projects, Serving Australia's Growing Demand

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Researched by Industrial Info Resources (Perth, Australia)--AGL Energy Limited (ASX:AGK) (Sydney, Australia) is Australia's largest gas and electricity retailer. It invests largely in the supply of gas and electricity and has a growing portfolio of renewable energy projects, predominately windfarms. Industrial Info is tracking 11 AGL Energy projects across four Australian states, totalling more than $4.63 billion in investment value.

AGL Energy, with consortium partner APA Group (ASX:APA) (Brisbane, Australia), is developing the Diamantina power station in Queensland. The power plant will supply electricity to neighbouring industrial operations, including the Mount Isa mines operated by Xstrata Copper (Brisbane, Australia). The highly efficient combined-cycle technology is expected to minimize the environmental impact of industrial power generation.

The decision to proceed with the Diamantina power station follows a two-year analysis to determine the most efficient way to supply energy to the growing resource industry in the area. Australia's plans for a 1,000-kilometer transmission line in northwest Queensland are now in doubt because of the announcement that Xstrata plans to obtain its power from the nearby gas-fired Diamantina power plant.

Siemens Australia Pty Limited (Melbourne, Australia) has secured a $195.1 million contract to supply machines for Diamantina. The 242-megawatt (MW) power station will utilize two SST-400 steam turbines, four SGT-800 gas turbines and two heat-recovery steam generators (HRSG). Equipment will be installed on two power islands in combined-cycle configuration. CTEC Pty Limited (Balcatta, Australia) has been selected as the EPC contractor, and together with Siemens will be working to construct, install and commission the $513.35 million project. The project is scheduled for completion in the first quarter of 2014.

Xstrata Copper has entered a 17-year contract with the Diamantina Consortium. APA Group is the owner and operator of the Carpentaria Gas Pipeline, and AGL Energy will supply the power station with 138 petajoules of gas for the first 10 years of the project.

AGL Energy is Australia's leading renewable energy company and recently has announced plans to buy the Silverton windfarm, which is being developed by EPURON Pty Limited (Sydney). If both stages are constructed, the Silverton windfarm will be on track to be the biggest in the southern hemisphere. The windfarm has the potential to generate up to 1,000 MW of renewable energy from 600 wind turbines. The first stage of construction is scheduled for 2013 and will consist of 282 wind turbines.

AGL Energy recently received government approval for its Tarrone peaking power plant. The 500-MW to 600-MW project (with the potential to expand to 920 MW) will cost about $600 billion, and AGL Energy will continue with permitting and approvals before making a final decision to proceed. In Australia, it is predicted that rising electricity demand, combined with a change in the mix of generation sources, will see continued increase in the need for rapid and efficient peaking power generation.

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