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National energy company ERM Power is investigating the feasibility of building an interstate gas pipeline between New South Wales and Queensland. The pipeline will increase competition between gas suppliers in NSW and significantly affect energy prices.
The proposed 900km, $500million pipeline project would transport and store gas between Wambo, south-east Queensland and Wellington, north-east NSW; it would consist of four sections, to be developed in stages.
In the future, the interstate pipeline would allow transportation of gas from prospective coal seam gas fields in Queensland, which would secure electricity generation in NSW, and create significant greenhouse gas abatement as has occurred in Queensland since the introduction of the Gas Electricity Certificate (GEC) scheme.
ERM Power managing director Philip St Baker said in order to make the interstate pipeline more feasible, ERM Power had revised some already approved projects that were awaiting finance.
“In July, we met with the NSW Treasury to discuss the challenges we are facing in arranging finance for the Wellington power station project and we have written to Infrastructure Australia to ask for the project to be prioritised as critical infrastructure,” he said.
As part of ERM’s gas-fired Wellington power station project, approved earlier this year, a pipeline between Alectown and Wellington, NSW was proposed. Now, as part of the interstate pipeline feasibility study, ERM is investigating an alternative route from Young to Wellington, NSW.
This would increase the sustainability of the overall project, as it would make up part of the interstate pipeline. It would also ensure gas supply to ERM’s future Wellington power station which is essential to meet NSW’s demand for electricity by summer 2011-12.
If approved, the project will provide more than 300 jobs, giving the local economy a much-needed boost and will mean that NSW can enjoy similar results as the Queensland GEC scheme.
The Queensland GEC scheme, which mandates the use of gas to generate 13 per cent of the state’s electricity, has resulted in a 15 per cent reduction in CO2 emissions during the last five years, without an electricity price shock. If the interstate pipeline goes ahead, NSW can expect similar greenhouse gas abatement, as well as increased competition in the gas supply market resulting in lower gas prices in the future.