On Monday it commissioned CQ Partners and ElectraNet to provide advice in how to get the electricity it hopes to generate into the peaking and baseload markets.
ElectraNet, which provides energy and infrastructure solutions across Australia, owning and operating over $2.5 billion of electricity transmission assets that transport electricity over long distances and to remote areas, is ideally placed to offer Leigh Creek advice.
It will offer the junior UCG hopeful tangible advice on exactly how to connect Leigh Creek via high-voltage electricity transmission lines to the National Electricity Market.
Not only will the Leigh Creek project need its own base load power generation to help generate methane from the deal coals, initial market analysis shows there is a strong potential to provide base load power to external customers.
The engagement is focussed on route and transmission infrastructure options, grid connection opportunities and risk mitigation strategies.
ElectraNet’s clients include power generators, South Australia's electricity distributor, SA Power, which has recently been struggling with a reliance on the two interconnectors with Victoria.
“Our work with ElectraNet helps focus more detailed analysis ahead of investment decisions with this work to include route options, transmission infrastructure choices and grid connection opportunities,” Leigh Creek managing director David Shearwood said.
“Leigh Creek is now considering baseload power generation for long term customers but also investigating peaking power that would swing into production when wind energy is not dispatching.”
CQ will provide strategic advice regarding market studies on peaking power in the NEM.
Leigh Creek believes its UCG project can produce power at times when the state’s intermittent electricity is not operating at capacity.
Gas extracted from the coal field, stored on site, could be used to spin up generators quickly in response to high demand.
CQ will analyse the local market, forecast of future market fundamentals and opportunities for gas fired base load and peaking generation; and provide strategic advice around electricity pricing and risk mitigation.
Shearwood said the changes in electricity and gas markets across Eastern Australia that his company had seen sharpen over the past 18 months afforded opportunities to bring reliable energy to South Australia.
“This is particularly important in higher power demand periods, generally summer months, when South Australia relies on power being available via interconnects with Victoria.
“Our work with CQ Partners will help longer term investment decisions by ensuring analysis of base load and peaking power opportunities is underpinned by substantiated historical analysis and reliable forecasts.”
That’s despite the fact that UCG has a patchy track record in Australia and first gas is still yet to be generated in SA, and Leigh Creek has yet to develop a pilot project.
South Australia has been closing down its coal-fired base load power, and now relies heavily on Victoria and its own renewables, which do have intermittency issues.
With a typical summer day requiring 2700MW, and with South Australia reliant on some baseload gas, and there are risks of shortages in 2018, or at least expensive gas will drive up the costs of peaking power to crippling levels in the summer.
Leigh Creek is looking to tap into these markets, providing baseload power under long-term contracts, under a heads of agreement with Shanghai Electric Power.
Leigh Creek has around $8.7 million in the bank, has recently started its first drilling, completing the first water monitoring well, which will be vital in proving that the issues that affected UCG in Queensland are not repeated in SA.
