Wednesday, 22 September 2010 09:43

The West Australian Government has moved to improve the state’s energy security, linking a new electricity supply contract that will save up to $1.5 billion and unveiling plans for a new solar energy plant.

WA Energy Minister Peter Collier announced a new electricity supply or “vesting” contract between the state’s power generator Verve Energy and electricity retailer Synergy that will save up to $1.5 billion in subsidies over 10 years.

“As a responsible government, on behalf of the tax payers of WA, we cannot continue to subsidise Verve’s losses,” Mr Collier said.

The previous contract left Verve’s power plants sitting idle and securing Verve’s financial position was essential to ensuring WA’s light stayed on, Mr Collier said.

“Improving the financial position of the corporations may also ultimately reduce the subsidy paid to cover the difference between the cost-reflective price of electricity and the price paid by consumers.”

The new contract would not solve all of Verve’s issues but would arrest the slide of its financial performance and was a step towards strengthening the state’s energy sector, the minister said.

WA’s Liberal government has inherited from the previous Labor government an energy sector “in tatters” after a “totally flawed” disaggregation process, Mr Collier said.

The state’s opposition energy spokeswoman Kate Doust said disaggregation had been aimed at attracting investment and diversity in WA’s electricity market, but the new vesting contract did not provide incentives for private investment in the space.

“Electricity prices are crippling Western Australian households and changes to Verve and Synergy’s arrangements are not likely to lead to any relief for families or small business,” Ms Doust said.

Also on Tuesday, Mr Collier said the WA government would foot one-third of the bill for Australia’s largest grid-connected PV solar power plant to be built at Geraldton in the state’s mid-west.

Mr Collier said the $58 million project would generate up to 10 megawatt hours of electricity a year.

This could be expanded to 40MWh as transmission capacity became available and component costs were reduced, with both production scale and improvements in PV technology.

“This facility will become the biggest solar PV project in the nation, testing and demonstrating the technology in WA on a commercial scale,” he said.

Ms Doust took a swipe at Mr Collier’s track record on renewable energy, saying he had signed off on the re-start of old coal power plants.

“The oldest and most inefficient coal turbines in Australia have been re-fired at Muja,” Ms Doust said.

Source: AuSES.