Environment better-off with gas-fired power plant - National - theage.com.au

A PROPOSED $1 billion gas-fired power station — environmentally friendlier than a brown coal plant — could supply the extra power needed if Alcoa expands its Portland aluminium smelter.
Origin Energy expects to hear from state authorities this month whether it has planning approval for a 1000-megawatt gas-fired power plant at Mortlake, in south-west Victoria.
An independent panel last week submitted its report on the project's environmental impact to the Department of Sustainability and Environment. Green groups, which have strongly criticised the Victorian Government's environmental record, prefer gas over brown coal for power generation because it produces fewer greenhouse emissions.
The environmental effects statement for the Mortlake station says the emissions would be up to 69 per cent less than from existing brown coal generators. Victoria accounts for 22 per cent of Australia's greenhouse gas emissions, and more than half of these stem from brown coal used for electricity generation.
Origin spokesman Wayne Gregory said the board was likely to decide later this year whether to proceed with the Mortlake plant. The power station was not dependent on Alcoa expanding, he said.
Alcoa and the Government have been discussing the expansion of the Portland smelter for more than two years. The company's smelters already use between 18 and 25 per cent of the state's electricity production and new sources of power would be needed if the Portland smelter were to expand.
Treasurer John Brumby told The Sunday Age he believed Origin would build a power station if it could find customers for the electricity. "They have to get the price right," he said.
Gas-fired electricity currently costs more to produce than power from brown coal. A spokesman for Alcoa, Patrick Gibbons, said discussions on the expanded smelter were continuing with the Government and that the project would be subject to the availability of power at a "world competitive price for aluminium smelting".
Alcoa has long-term power contracts with VicPower Trading (formerly the SECV) for its Portland and Point Henry smelters. The Government has been subsiding VicPower reportedly by between $100 million and $200 million a year, though the recent budget indicated this would reduce significantly.
Greens' spokesman on energy, Chris Mardon, said he expected the Government would make a "financial transfer" to Alcoa to help offset any higher price under a gas plant. One option being examined, he believed, was a subsidy to Alcoa to help it upgrade its coal-power plant at Anglesea.
Mr Mardon said he believed Alcoa wanted to announce the smelter expansion last year but the Government forced a delay until after the November poll.
Origin's Mr Gregory said: "Carbon trading is certainly one of the things our board will be looking at."
Meanwhile, renewable energy company Pacific Hydro has reached in-principle agreement with Alcoa to use its Portland transformer to connect wind farms to the grid. Pacific Hydro is building the farms at four sites near Portland.