Plans have been submitted for Australia’s most powerful gas-fired peaking power plant, as experts warn future energy demand could trigger a wave of new “mega” facilities.

Energy Australia was granted approval in 2009 to build the 800-megawatt (MW) Marulan gas-fired power station in the NSW Southern Highlands.

With work yet to begin on the project, the foreign-owned company has now applied to almost double the plant’s capacity.

The power station, which would now include two open-cycle gas-fired generators, would have a maximum capacity of 1.4 gigawatts (GW) and be operational by 2032.

South Australia’s Torrens Island is the country’s largest gas-fired power station, generating a maximum of 800MW, down from its peak of 1.28GW after its staged closure. The 724MW Colongra plant is the largest gas-fired power station in NSW.

artists impression of the Marulan gas plant with wastewater ponds, and gas turbines

The site on Canyonleigh Road in Brayton would include two gas turbines providing peaking power generation. (Supplied: Energy Australia)

Forecast demand from data centres is part of the reason for the expansion, with 90 centres up and running in NSW and dozens more in the planning pipeline.

“The data centre growth and the growth in the energy market, the movement towards more wind and battery projects and as coal-fired power stations retire, then there is a gap of gigawatts of energy that are required in New South Wales,” Energy Australia’s project manager Matthew Poole said.

More gas anticipated

The original Marulan project proposed one turbine providing peaking power and one providing continuous baseload power, while the new proposal would be two peaking plants.

“It will be operated as a peaking facility and only operate when the renewables aren’t there to support the grid,” Mr Poole said.

He said while the company was seeking a maximum of 1.4GW for approval, it would decide the final size of the project later in the process.

“But it would be a mega project, significant, in the billions of dollars,” he said.

Geoff Bongers runs an energy consultancy firm and is an adjunct professor at the University of Queensland’s Gas and Energy Transition Research Centre.

He said he expected to see more gas projects of a similar size.

image of man smiling in a business shirt

Geoff Bongers says gas supply will pose a problem if more large-scale gas-fired power plants come online. (Supplied: Geoff Bongers)

“As coal plants disappear and nuclear is not an option in Australia at the moment … the only other large-scale, firm, dispatchable technology we have available is a gas plant,” he said.

“From that point of view, we’re going to need three or four more of these at this sort of scale.”

AEMO’s energy generation data shows that for about 6,000MW of coal-fired generation being decommissioned, there is about 6,800MW of new gas-fired generation in the pipeline.

“There is a tension between available gas and gas usage,” Dr Bongers said. 

“That will be a complicating factor going forward. We are going to have to find more gas in Australia for domestic use to fire gas power, and that’s likely to require additional infrastructure as well.”

An aerial view of a large power station with two tall smoke stacks.

Energy Australia says large gas-fired power stations will be needed as coal-fired plants are decommissioned. (Shuttershock: Harley Kingston)

Marulan will link to the Moomba to Sydney Pipeline, which sits about 7 kilometres south of the site.

A 20 per cent domestic gas reservation was announced in this week’s federal budget to secure a proportion of LNG production for the domestic market, which will come into effect mid-2027.

Cost questioned

Last week, Bluescope CEO Tania Archibald called on the federal government to lower the wholesale gas price to $8 a gigajoule, arguing the current price was three to four times higher than in the US and Qatar.

Dr Bongers said that cost was something this project was likely to bump up against.

“How often that plant gets to run is going to be a key factor in how economic it is going to be,” he said.

“If it runs for 10 per cent of the time, it’s going to have to have a very high power price [to consumers] for it to be able to pay back its investors.”
a man in a collared short looking serious

Ty Christopher says an increase in gas projects is concerning. (ABC News: Sissy Reyes)

Ty Christopher, director of Energy Futures Network at the University of Wollongong, also questioned whether it would be “viable” to run such a large facility as a peaking plant.

“I can’t see how something on the scale that they’re talking about would stack up economically,” he said.

Mr Poole said the project would not provide continuous baseload generation and the modification application removed a clause that would have allowed it as an option.

An Energy Australia spokesperson pointed to the performance of its Tallawarra B firming plant, a 320MW turbine which had 150 starts in its first year, in response to questions about profitability.

20th-century technology

Mr Christopher said while some gas might be needed, he was concerned by the new gas projects coming online, and the scale of the plans at Marulan. 

“We do need to be very careful of people using Trojan horses; basically, continuing reliance on gas for baseload,” he said.

“It’s clearly been shown for most of the time and under most weather conditions, solar, wind and storage can actually deliver what we need in the clean energy future.”

He said while gas was considered less emissions-intensive than coal, he feared locking Australia into more long-term fossil fuels.

“The bottom line is that looking at gas for the energy grid at the moment falls into the category of 20th-century technology for a 21st-century grid.”

The modification application is being assessed by the federal Department for Climate Change, Energy, the Environment and Water under the Environment Protection and Biodiversity Conservation (EPBC) Act. 

Energy Australia said it would be placed on public exhibition once completed, around October.