Australia flicks switch on first new power station in 7 years

[SYDNEY] AGL Energy Ltd's Barker Inlet gas-fired power plant began operations Monday, Australia's first major new power station since 2012, with its quick-start capability designed to back-up fast-growing wind and solar generation.

The A$295 million (S$276.7 million) facility in South Australia has 210 megawatts of capacity and will help supplement renewables, which regularly meet more than 50 per cent of the state's power demand, the company said in a statement. The plant is capable of reaching full capacity within 5 minutes, AGL said.

"This is important, because it will allow us to provide a rapid response to changes in renewable generation supply and demand -- particularly wind generation here in South Australia," Chief Executive Officer Brett Redman said in the statement. Barker Inlet is part of AGL's A$2 billion pipeline of infrastructure projects aimed at bolstering the grid.

Australia will likely need around A$400 billion in new utility-scale generation assets over the next 30 years as aging coal-fired power plants retire, the Grattan Institute, a think tank, said in a study last month. However, the industry has complained that the lack of policy certainty at a national level is hampering investment.

The government has short-listed 12 projects under a program to underwrite investment in new generation, and is also giving financial backing to the A$5 billion-plus Snowy 2.0 pumped-hydro project that will provide large-scale energy storage to back-up renewables.

BLOOMBERG