New spark from AGL

Herald Sun


AGL will spend $230 million to build the largest hydro-electric power plant in 25 years to provide Victoria with additional power generation capacity during peak summer periods.AGL will build the new 140 megawatt plant at Bogong in the Kiewa Valley while it will also construct a smaller 12.2 megawatt hydro-electric power station at Banimboola.
The new plants will help provide enough electricity to meet the peak summer demand for about 122,000 homes and will deliver the power with zero greenhouse gas emissions.
The Bogong plant will increase the hydro proportion of AGL's wholesale generation portfolio by 5 per cent.
More than half the group's total energy generation portfolio is produced with zero emissions.
Up to 200 jobs are expected to be created during construction with contracts awarded on the Bogong project to McConnell Dowell Constructors and Toshiba International.
The assets, which were part of AGL's $1.5 billion purchase of Southern Hydro's renewable energy business last year, will be owned by AGL Energy to be created through the proposed $6.4 billion merger between AGL and Western Australia's Alinta. The merger proposal will be put to a shareholder vote early next month.
AGL chief executive Paul Anthony said Bogong was one of the last opportunities in Australia to build a large-scale hydro power plant.
"This development will deliver important strategic benefits to AGL's wholesale energy portfolio and through its fast start up capabilities, will also help meet Victoria's electricity demand during peak periods," he said.
Victoria's electricity network has struggled to meet demand during extreme heat over summer when energy consumption soars due to the use of airconditioners.
Mr Anthony said the decision to proceed with the Bogong plant follows the Victorian Government's recent move to set up a Renewable Energy Target (VRET) Certificate scheme from 2008.
The VRET scheme was set up after the Commonwealth decided not to pursue a national plan to increase its mandatory renewable energy target (MRET) above the current 2 per cent level to 10 per cent to stimulate further investment in the sector.
Victoria's VRET scheme would require electricity retailers to meet 10 per cent of their power from renewable sources such as wind, solar and hydro electricity by 2016.
Premier Steve Bracks said the scheme made investment in renewable energy a viable option for companies.
"This new power station would not have been possible without the Victorian Renewable Energy Target, which was approved by Parliament last week," Mr Bracks said.
"This really creates a market for renewable energy."
Opposition Leader Ted Baillieu has said he will scrap the mandatory renewable energy target for electricity retailers if he wins government at the November 25 poll.
Bogong is expected to be fully commissioned by October 2009.AGL shares closed up 32 at $21.07.