WA Energy Minister Eric Ripper said the contract would result in the construction of the new power station in Welch Street with an initial six megawatt reliable generating capacity, expanding to 8.5 megawatts in later years.
The power supply contract, between Western Power and Exmouth Power Station Pty Ltd, a subsidiary of Burns and Roe Worley Limited, was signed last week in Perth. CNG will be trucked 220km from the Dampier to Bunbury Natural Gas Pipeline to fuel the station.
Western Power will also continue to own, operate and maintain its existing wind farm at Exmouth.
Western Power is already responsible for 26 small stand alone power systems serving 22,500 customers in regional and remote areas not connected to the main electricity grids. Costing the company more than $50million a year to subsidise power supplies in regional areas off the grid.
"Many regional towns in Western Australia rely on costly and inefficient diesel powered electricity generation which also contributes to greenhouse gas emissions. The aim of putting regional power generation to competitive tender is to seek power suppliers who may be able to offer a more cost-effective and efficient alternative," Ripper said.
"While there will be no change to the tariff for customers, Western Power expects to reduce its costs by as much as 28% as a result of this new power station in Exmouth."
