News: France's ENGIE to run South Australia power plant at capacity

SYDNEY, March 29 (Reuters) - French energy major ENGIE said on Wednesday it will return its Pelican Point plant in South Australia to full capacity to help meet the renewable energy dependent state's power needs.

ENGIE said it would spend more than A$40 million ($31 million) upgrading its second turbine at Pelican Point, which was withdrawn from the market in April 2015.

South Australia, which relies on wind for about a third of its power capacity, has become vulnerable to outages and soaring prices as it does not have enough back-up power when the wind is not blowing.

The state outlined plans earlier this month to spend A$510 million ($385 million) to stabilise its electricity system, including battery storage and a new A$360 million 250-megawatt gas power plant, following a state-wide blackout last September.

ENGIE said both of Pelican Point's gas-fired turbines will be operational from July 1.

"We will be able to offer an additional 240MW of energy to the South Australian market," Engie Australia Chief Executive Officer, Alex Keisser said in a statement.

"Recent events have highlighted the challenges of the National Electricity Market (NEM) in South Australia, and by customers contracting Pelican Point's additional capacity some of the supply pressures experienced in times of high demand could be alleviated," he added.

ENGIE Australia has also entered into a gas supply agreement, via its retail business Simply Energy, to purchase 8 petajoules of gas from the country's top power and gas retailer Origin Energy (ORG).

The gas will be used to service Simply Energy's residential and commercial customers across South Australia and Victoria.

($1 = 1.3087 Australian dollars)