- Six new power stations to be built before existing supply agreement ends in April next year
- Deal will result in millions of dollars in annual savings compared with previous power purchase agreement
Towns in Western Australia’s Mid-West region will benefit from a reliable new power supply which Horizon Power forecasts will save taxpayers millions of dollars.
Energy Minister Mike Nahan today announced a new power purchase agreement with WA company Contract Power Australia for the supply of electricity to the Mid-West towns of Cue, Meekatharra, Yalgoo, Wiluna, Sandstone and Mount Magnet.
“This agreement will ensure a safe and reliable power supply for the Mid-West as well as providing savings for the State Government through a more flexible supply arrangement,” Dr Nahan said.
Five new diesel-fired power stations and one gas-fired power station will be funded and built by Contract Power Australia on land owned by Horizon Power. A new station may be built in Norseman, if required.
“The new arrangement gives Horizon Power much more flexibility in finding the most economical way of providing additional capacity if required in the future, and offers the ability to augment the generation capacity with renewable energy,” the Minister said.
“Horizon Power is currently exploring several options to enable more households to connect solar energy to our network and we hope to give more information on this new development in the coming months.”
Since the inception of Horizon Power in 2006, the operating subsidy from the State Government has grown substantially and the business has recognised that this is not sustainable in the long term. Horizon Power undertook a strategic review last year following consultation with the State Government and identified that it could reduce its operating costs significantly. The goal is to decrease its subsidy by $100million a year by 2018.
Dr Nahan said the Mid-West project was testimony to how the Government would continue its work to find better ways to deliver essential services to all West Australians while allowing for the uptake of renewable energy and displacing diesel fuel generation.
- Other recent cost-saving initiatives implemented by Horizon Power include; the outsourcing of maintenance operations in the Gascoyne/Mid-West region to achieve savings and improve customer service and the outsourcing of engineering and projects capability to GHD
- For the 2014-15 State Budget forecast, Horizon Power reduced its ongoing operating costs against previous budgets by $36.6m per annum over the forward estimate period
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