Speaking at an official launch of the project at the Alcoa refinery in Pinjarra, Alinta chief executive Bob Browning said the fact that most of the 140 MW of electricity from the first plant had been sold so far in advance was an indication of the strong desire from customers for choice and competition.

"Even though the plant won't be producing electricity until mid next year, Alinta has already signed up a large number of customers who will benefit significantly from cheaper and cleaner electricity," Browning said.

"With full reform of the electricity market, Alinta will have the opportunity of providing the same cheap and clean electricity to all consumers, including householders."

At the time of the ceremony the energy crisis facing the state with forced restrictions was not known. Now that fact that Western Power has admitted it will struggle for the next three years to guarantee reliable energy supply will ensure that Alinta will have a ready-made market for any power supply it can produce.

The cogeneration plant will generate 140 MW of electricity and more than 220 tonnes per hour of high-pressure steam. Alinta will sell the electricity direct to customers while Alcoa will use all the steam in its bauxite refinery process.

Browning said the other major advantage of cogeneration was its environmental benefits.

"Cogeneration is a green-friendly, new technology alternative to traditional gas and coal-fired power stations," Browning said.

"The cogeneration plant operates at 80 per cent energy efficiency, compared with 25 to 50 per cent for other power plants operating in WA.

"This efficiency has enormous benefits in terms of greenhouse emissions. Instead of the South West Interconnected System average of 890 kg of CO2 per megawatt hour, Alinta will be producing electricity at 490 kg of CO2 per megawatt hour.

"Cogeneration is the cleanest form of energy for alumina production worldwide and that means greenhouse gas emissions per tonne of alumina produced by Alcoa are reduced significantly. These are substantial environmental benefits for the people of Western Australia."

Browning said given the right electricity market conditions, Alinta's cogeneration project could potentially provide an electricity supply of 1200 MW, or about 30 per cent of the current SWIS capacity.

This would mean $1 billion in private sector investment in Western Australia and Competitively priced electricity available to all electricity consumers.