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Strike Energy gets backing forMid West gas power station while Frontier Energy’s solar farm misses out

McGowan Credit: DanielWilkins/The West Australian

Strike Energy’s proposed new peaking gas plant has won crucial backing to join the State’s main power grid.

But a solar farm proposed by Frontier Energy has missed out — and shares in the business to be chaired by Mark McGowan dived 43 per cent on the news.

Strike’s Mid West gas powerstation was added to a list of about 70 energy generators registered for capacity credits by the Australian Energy Market Operator.

Those credits pay power stations to to be available when demand peaks, through a system designed to support long-term investment in the grid.

A series of peaking gas plants run by local company Tesla Holdings — not linked to Elon Musk’s car maker —also missed out.

Frontier chalked up the omission to a likely surplus of capacity on the market amid an influx of battery projects. That follows years of concern the State would face a major shortage of power through the next decade.

The company had been developing a $300 million solar project and battery storage project at Waroona, which was knocked back by AEMO despite scoring a mention on a draft list just weeks ago.

The damage was much wider for Frontier, as a $210m debt funding deal with Infradebt was canned because the project could not secure the key revenue stream.

“Whilst the outcome of AEMO’s allocations is not ideal, energy prices remain at record highs and are forecast to continue into the future, the underlying fundamentals for our Waroona Renewable Energy Project remain excellent,” chief executive Adam Kiley said.

He said the business would pursue alternative funding options and hoped to win support from the Federal Government’s Capacity Investment Scheme — another mechanism designed to bankroll projects.

Meanwhile, Strike chief Stuart Nicholls said AEMO’s decision had confirmed the need for his company’s 85 megawatt power station in the Mid West to back up renewable power.

“This project marks the next leg of Strike’s gas development and decarbonisation strategy and demonstrates how Strike is using its gas endowment for a positive impact in Western Australia’s energy transition,” he said.