Alinta has projected a 2006 net profit of $145 million, up from $140m. The company has said it expects further strong growth.

Browning said cogeneration was the perfect launching pad into the electricity market and would be a major growth driver for Alinta.

“We have a strong position in the West Australian gas market," he said.

"The level of contestability in electricity has opened up enough to allow us to get a good foothold in the market.

“We’re very keen to see full contestability commence. We’re confident the inherent efficiencies of cogeneration will position us well to compete for electricity customers”.

But Alinta’s first cogeneration unit at Alcoa’s Pinjarra site - due to be commissioned six months ago - is currently generating 70MW compared to its maximum capacity of 140MW. It is expected to be commissioned in mid January, the delay potentially causing outages for Perth over summer.

In 2003, Perth faced an energy crisis after an extended period of high temperatures and high demand resulted in widespread blackouts. Security of power supply has been a major issue in state politics ever since.

Browning said the second cogeneration unit was due late next year and the third and fourth units would initially be built as peaking plants at Wagerup for the summer of 2007/08.

According to Alinta, the first two units would contribute EBITDA of about $20 million each while the third and fourth units would contribute a combined $33 million EBITDA in their role as reserve capacity peaking plants.

“As we sell the output of those units we would intend converting them to cogeneration plants”, Browning said.