The 370-megawatt base load power station will be supplied with gas from AGL’s wholesale gas portfolio and is expected to consume around 20 petajoules per annum, the company said.

Managing director Greg Martin said construction was also driven by North Queensland’s burgeoning electricity consumption, which is forecast to grow 7.8% pa over the next two years and 2.8% pa over the next 10 years, and a recent announcement by the state government that it would open its gas and electricity markets to full retail contestability.

Martin said the Townsville power station would generate electricity using a combined cycle gas turbine with high efficiency technology to provide better environmental performance benefits than traditional coal-fired power generation.

“AGL will be working closely with the Queensland Government and other local authorities regarding approval processes and the opportunity the project offers for attracting other industrial customers to the recently declared Townsville State Development Area,” he said.

“The power station will bring greater competition to wholesale electricity prices in Townsville, aligning with the Queensland Government’s intention to provide enhanced opportunities to attract major industry investment and further economic development for the region.”

Several potential sites within 40 kilometres of Townsville are being considered for the plant, he said.

In July, AGL announced its intention to commit to 1500 PJ of gas from the PNG Gas project and acquire a 10% upstream project stake from Oil Search Limited.

AGL is Australia’s largest energy retailer with more than 2.8 million customer accounts. It also has the largest wholesale gas portfolio including contracts with Queensland coal bed methane producers, as well as producers in the Gippsland and Cooper Basin.