Turbine upgrade to be self funded by Delta Electricity

Delta Electricity has withdrawn its application for federal government funding for a turbine upgrade at its Vales Point Power Station.

Delta initially submitted an expression of interest for efficiency related projects under the Underwriting New Generation Investments (UNGI) Program in early 2019.

It was announced in 2020 that Vales Point was shortlisted in the UNGI Program to receive $8.7M of public money for a turbine upgrade aimed at improving efficiency and reliability of power delivery as well as significantly reducing carbon dioxide emissions.

Despite funding being identified in the Federal Budget in October 2020, a formal grant application and evaluation was still required with a decision expected early in 2021.

The Federal Budget included $134.7M over four years for a range of electricity infrastructure projects aimed at improving affordability and reliability, and Vales Point was one project to be fast tracked.

Delta has now advised the Federal Government that it would not be submitting a funding application for the proposed efficiency upgrade to the Vales Point turbines.

Managing Director, Greg Everett, confirmed that while the turbine upgrade project was scheduled for late 2022, contracts needed to be placed now given the size and complexity of the project.

“Unfortunately, the timing of the UNGI funding application process and the placement of contracts do not align,” Everett said.

“Given the forward market outlook, the nominal closure of Vales Point in 2029 and proposed changes to electricity industry policy settings, the project is not economically viable without certainty around the UNGI funding.

“Despite misinformation put forward by anti-coal groups, the upgrade to one of the Vales Point turbines had the potential to bring additional dispatchable generation into the grid while significantly reducing carbon dioxide emission,” he said.

“This project was about enhancing energy security while providing an overall reduction in carbon emissions by generating the same amount of electricity but by burning less coal.”

Delta has already committed to and will install the same upgrade to its other Vales Point unit in April, Everett said.

Sue Murray