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Newcastle Power Station Project


Aerial view of Newcastle Power Station Project featuring expansive industrial facilities with multiple large, rectangular buildings and cylindrical storage tanks, adjacent to a winding river with vegetated banks, surrounded by a mix of developed and open land, under a clear blue sky.


As coal-fired power stations close, gas-fired power stations will provide flexible, fast-start generation capable of delivering rapidly dispatchable peaking and firming capacity into the National Electricity Market. Fast start dispatchable generation complements renewables by providing back-up to wind and solar energy and can help respond to peak demand.

The gas-fired power station can help improve the security of electricity supply. The proposed location of the station is close to high electricity demand industry in the Newcastle region. The power station will modernise the NSW generation fleet and lower carbon intensity.

There are two technologies that are typically used for the type of flexible, fast start operation that the energy market needs right now. These are reciprocating gas engines and aeroderivative gas turbines. AGL is currently assessing the best technology for both the proposed service and the location at Tomago.

Gas Turbine Technology

With its heritage in the airline industry, aeroderivative gas turbine units consist of a compressor, combustion chamber, turbine and generator. Air is compressed to high pressure before being admitted into the combustion chamber. Fuel (natural gas or diesel as required) is injected into the combustion chamber where combustion occurs at very high temperatures and the gases expand. The resulting mixture of hot gas is admitted into the turbine causing the turbine to turn, generating power. In the open cycle configuration, hot exhaust gas is vented directly to the atmosphere through an exhaust stack, without heat recovery.

Reciprocating Engine Technology

With its heritage in the shipping industry and a form of internal combustion engine, reciprocating engines used for power generation harness the controlled ignition of gas and/or diesel to drive a piston within a cylinder. A number of pistons move sequentially to rotate a crank shaft which turns the generator.

To ensure operational flexibility, particularly at times of high demand, engines will be capable of firing both natural gas and distillate fuel. Natural gas will be the predominant fuel. Duel fuel gas engines have the ability to use liquid fuel as a backup when gas supply is constrained.

We will invest up to $400 million in the construction.

We estimate 150-200 new jobs will be created during construction over 18 months, with more employment opportunities expected through the local supply chain.

The market has gone through significant changes due to multiple factors.

In particular, the sudden exit of coal-fired power stations has created a tighter supply and demand balance. There is also the increase in the cost of gas due to material changes in gas demand for domestic and international markets. This project demonstrates our support for an orderly transition to a carbon-constrained future. This investment is to avoid the price spikes the market saw with the unanticipated and sudden exit of Northern and Hazelwood power stations. We believe that increasing supply of generation into the market will ultimately put downward pressure on prices.

We always encourage customers to shop around for the best deal. To compare energy deals, customers can visit the Australian government website, Energy Made Easy.