The Australian Government has agreed to underwrite the first two projects from the shortlist of the Underwriting New Generation Investments program (UNGI) and set out the initial support terms.
The first project, APA Group’s proposed 220MW gas generator in Dandenong, Victoria, will provide much-needed fast-start generation to balance the significant increase in intermittent renewables in the state.
The second project, Quinbrook’s proposed 132MW gas generator in Gatton, Queensland, will provide new capacity to help meet peak periods in both Queensland and New South Wales, increase competition and compliment the Commonwealth and NSW Government’s QNI interconnector upgrade.
Minister for Energy and Emissions Reduction, Angus Taylor, said the projects are well advanced, have demonstrated financial viability, and would secure the grid and put downward pressure on prices.
“We are taking action to bring power prices down and keep the lights on,” Mr Taylor said.
“We are working to deliver an energy system that isn’t a roadblock to businesses growing and employing more people and that isn’t stinging family hip-pockets.
“The government will now enter detailed underwriting and contractual negotiations with the project proponents ahead of their financial investment decisions.”
The selection of the two projects was based on expert advice and careful consideration of the potential impacts. Consideration included the stage of development, the financial viability and the benefit to energy market customers of the projects.
Final agreement is expected to be reached in 2020, with construction to commence shortly after the projects secure private sector finance.