For power or profits?

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Nanjing Night Net


ARE AGL’s profit margins more important than Dalton residents’ quality of life?

This was the question many were asking at last week’s Planning Assessment Commission (PAC) public consultation meeting following revelations that the company’s justification for its proposed $1.5billion gas fired power station may be based on out dated information.

When the Post contacted the energy giant, a spokesperson said they would not comment on any of the public submissions. During her address, Member for Burrinjuck Katrina Hodgkinson said the ‘Project Need and Justification’ section of the Director General’s Environmental Assessment Report was based on two reports published in 2007 that called for more energy developments to help meet future shortages.

However, Origin Energy’s decision to withdraw an application to build a similar gas fired power station at Big Hill was based on a report, authored earlier this year, which revealed that there would be an oversupply of energy in NSW by 2020.

“We have two diametrically opposed assessments on the future need for power supplies,” Minister Hodgkinson said.

“Dalton’s based on five year old reports and Origin’s report this year. This means the only other justification for the Dalton power station proposal is…AGL’s financial bottom line.”

In the Preliminary Environmental Assessment, conducted by URS in March, 2010, it listed the company’s retail position as a factor that determined the project need and timing.

“This is influenced by AGL’s ability to hedge market exposure through contracting,” the report stated.

“As the time approaches where demand equals supply, the wholesale price of electricity to AGL rises, sometimes dramatically, while sales to consumers remain at a fixed, regulated price. This affects the contact market and increases the cost of electricity for AGL that it supplies to consumers at a fixed price.

“The Dalton Power Project is fundamental to allowing AGL to continue to supply electricity to consumers at a competitive and regulated price.

“In order to reduce its exposure to electricity price volatility, AGL seeks to construct and operate a gas fired peaking power station to mitigate against potential substantial losses during times of high price.”

“You have received many comments and submissions from my constituents detailing their concerns about the impact this project would have on their way of life: a way of life which continues to attract new residents to the area,” Minister Hodgkinson said.

“While I recognise the need for development to meet the State’s future energy needs, I question whether AGL’s financial bottom line is, in itself, sufficient justification for the construction of a gas fired power station within 4 km of the village of Dalton.

“I would ask you to consider very carefully whether in the next decade there will be a shortfall or an oversupply of electricity.”

NSW Greens MP John Kaye has echoed the Minister’s concerns. While he was not able to attend the PAC meeting because of travel complications he said AGL’s project justification was based on “out dated reports and fuzzy thinking”.

“The best AGL could come up with was three out dated reports, two of which have been comprehensively discredited. None bear any relevance to the energy needs of the next 20 years,” he said.

“The 2004 NSW Government Green Paper is not only eightyears out-of-date but it also never made it past the draft stage. It did not become accepted policy. The paper was heavily criticised for failing to account for the lower cost opportunities for improving energy efficiency and better managing the demand.

“Projecting forward from a discredited 2004 document to the energy needs of the middle 21st century looks like an act of desperation.

“The 2007 Owen Inquiry suggested NSW would face the risk of widespread blackouts by 2013-14. This was ridiculed at the time and has proven to be entirely fanciful.

“Even the 2010 Statement of Opportunities report has been replaced by a more up-to-date forecast that suggests there is no need for new large scale capacity before 2018-19.

“None of these reports justifies the type of investment that AGL wants to make in Dalton. The energy giant will no doubt be making money out of the misfortune of NSW households who are trapped into paying for expensive infrastructure…

“Spending $1.5 billion on gas generation to satisfy the peak demand might make more money for AGL but spending a fraction of that amount on demand management would lead to lower power bills and a cleaner environment.”




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