World Environment News

Australia brown coal targeted for power plant

Date: 28-Jan-02

Australian Power and Energy Ltd (APEL) said it had lodged a bid that could lead to mining of the Flynn coal field east of the Loy Yang power station to develop a 50,000 barrel-per-day gas-to-liquids plant and 1,060 megawatt power generator.

APEL chief executive elect Pearce Bowman said the proposal would mine around 26 million tonnes of brown coal a year, which would be turned into gas for a GTL plant and power generation. Carbon dioxide would be returned into the ground.

"We believe this is an efficient use and environmentally acceptable use of brown coal," Bowman told Reuters. "From all the evaluations it looks like a very viable project."

Bowman said the first low sulphur diesel produced would come onstream in five to seven years, providing additional fuel at a time when the offshore Bass Strait oil fields were declining.

The power station would produce 500 MW baseload and potentially 500 MW for peak demand and would be fired by gas and waste heat and steam.

Bowman, a former chief executive of the previous state-government corporatised Generation Victoria, said liquid fuel would be the main product from the plant, allowing the gas-fired generation to be competitive in the electricity market.

APEL comprises a group of private investors who would be seeking equity partners to move forward with the project.

"Certainly all of the major players have been contacted and are familiar with our proposal," Bowman said.

The Victorian government in October called for exploration tenders to open up new areas of the state's vast low-grade brown coal fields, estimated to contain sufficient supplies for at least 500 years usage at current rates.

The government said projects should focus on limiting greenhouse gas emissions from brown coal, which green groups say is so highly polluting it should be left in the ground while renewable energy projects are developed.

Brown coal-fired generation currently accounts for about 85 percent of Victoria's total electricity supply with four major baseload generators located in the Latrobe Valley.

Tenders were invited for four blocks covering a total area of about 764 square kilometres and are the first new areas to be offered since the 1920s.
The governments expects that any mining licences would be offered to successful exploration licence tenderers after about two years.

Energy market participants said more than one bid was lodged on Thursday, with proposals to be considered over the next three months. An announcement is due to be made by July.

© Thomson Reuters 2002 All rights reserved

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