WA Energy Minister Eric Ripper signed off on a series of agreements that will see work start early next year on the construction of the power station in Esperance.
The Minister said the power station, which is expected to be operational by 2004 would supply more than a quarter of Western Power's regional customers outside the south-west power grid and open up local employment and economic development opportunities.
"We expect this project to slash greenhouse gas emissions by up to 30 percent compared with Western Power's existing diesel power station," he said. "This is a cost-effective and environmentally friendly solution to Esperance's future power needs.
The power station would supply Western Power's 6,327 business and residential customers in and around Esperance - stretching west to Munglinup, east to beyond Condingup and north to Salmon Gums.
Mr Ripper said the 330km privately financed pipeline would be built to transport Carnarvon Basin gas via existing Kambalda infrastructure to the power station site in the Esperance Port Authority precinct, bringing the total length of the GGT pipeline to 1754km.
Mr Ripper also gave formal approval for Western Power to enter into an 18-year power purchase agreement with independent power producer, Burns and Roe Worley Developments (BRWD).
The Minister said BRWD would supply electricity to Western Power at a lower generation cost and at higher environmental standards than existing diesel generators. "There will be no change to the tariff for customers," he said.
"They already receive subsidised power through the uniform tariff scheme, but the cost to Western Power of providing electricity will be substantially reduced.
"This is important economic infrastructure which will put Esperance and the wider region in a strong position to capitalise on other development proposals in the future."
A related agreement allows for BRWD to purchase wind energy to complement the gas generation. This will promote investment in the Nine Mile wind farm, a second wind farm to be built and owned by Western Power.
Mr Ripper said the State Government had negotiated with BRWD to deliver a range of community benefits including investigating the feasibility of providing gas to other consumers on the pipeline route; agreement from BRWD to provide heating for the swimming pools and showers at the Bay of Isles Leisure Centre at no cost to the Shire of Esperance.
This was to replace an existing arrangement between the Shire and Western Power; and a proposal from the company to buy renewable energy from other sources if economical or to develop its own renewable energy initiatives.
BRWD planned to undertake a study with Shark Lake Meatworks into the potential for a plant to produce synthetic biodiesel fuel from tallow, a by-product of the meatworks. If viable, the plant would produce 1.5 million litres of fuel a year. It is expected the study would be completed by the end of the year.
Mr Ripper said a key part of the agreement aimed to maximise local content and employment and training in the construction and operation of the plant. This included ensuring minor maintenance was undertaken by local tradesman and training of local staff in the operation of the power station. The company was also required to spend at least $17.5million of its capital budget on goods and services sourced within Western Australia.
