1976 VICTORIA • • STATE ELECTRICITY COMMISSION OF VICTORIA REPORT ON PROPOSED EXTENSION TO STATE GENERATING SYSTEM LOY YANG PROJECT • Ordered by the Legislative Assembly to be prin.led, 2nd June, 1976. By Authority: C. H. RIXON, Government Printer, Melbourne. C.l.-5257176-Price $1.60. • • • • .. STATE ELECTRICITY COMMISSION OF VICTORIA REPORT ON PROPOSED EXTENSION TO STATE GENERATING SYSTEM LOY YANG PROJECT 1976 • CONTENTS Introduction Growth of Electricity Requirements 2 Balanced Development of the Generating System 2 Present Generating Capacity and Proposed Additions Of Base Load Plant 3 Reserve Generating Capacity 4 Description of Project 5 Project and Environmental Investigations 7 Parliamentary Public Works Committee Inquiry 8 Consultations With Other Bodies 9 Capital Expenditure 9 Operating Result 9 Financing, Including Services 10 Recommendations 10 Commendation 10 Plate No 1 - Loy Yang Project, Artist's Impression Plate No 2-Latrobe Valley Main Coal Fields Area Plan Plate No 3-Loy Yang Project Area Plan Plate No 4 Loy Yang Project, Layout for 2000 MW'' A" Power Station Appendix A- Report of Assistant General Manager (Development) Introduction 11 Description of Loy Yang Project 14 Environmental Effects 39 Need for Loy Yang Project 56 Size of Loy Yang Project 60 Fuels 63 Comparison of Brown Coal and Nuclear 65 Selection of Loy Yang Open Cut 66 Selection of Power Station Cooling Water Systems 68 General Comments 71 Public Participation 72 Final Selection of Loy Yang 73 Recommendations 74 The Hon J C M Balfour, MP Minister for Fuel and Power, Melbourne Sir STATE ELECTRICITY COMMISSION OF VICTORIA REPORT ON PROPOSED EXTENSION TO THE STA ·rE GENERATING SYSTEM LOY YANG PROJECT ... INTRODUCTION discarded on economic and environmental In this report, the Commission presents for grounds as discussed in some detail in Appen­ approval as an undertaking, within the meaning dix A. of Section 3(1) of the State Electricity Commis­ 6 The need for such a major project has been sion Act, the proposed construction of a 4000 foreshadowed in recent annual reports of the MW fuel and power generating project com­ Commission, and the preliminary report on the prising an open cut, two power stations, eacH 4000 MW Loy Yang Project submitted to you in with an installed capacity of 2000 MW, and February 1974 formed the basis for the review associated works to be located in the Parish of by the Parliamentary Public Works Committee Loy Yang, within the Shire of Traralgon, 7 km which led to its endorsement in principle of south-east of the City of Traralgon. The project the project. would be designated "Loy Yang". An artists im­ pression of the completed project is shown in 7 Appendix A summarises the extensive in­ Plate 1. vestigations made over a number of years by the specialist departments of the Commission to determine the future growth of load on the 2 The construction of this project is program­ generating system and the ways by which the med to achieve commercial service of the first base load component can be met. lt surveys the generating unit in 1983, by which time the resources to be used, the optimum sizes of brown coal fuelled Yallourn W Power Station power stations, generating units and open cut should have been completed to its full1450 MW plant, the environmental effects of t.he works, as capacity, the 1000 MW natural gas fired plant well as the economic and other factors which purchased for Newport should be in service, led to the recommendations of the Loy Yang and the 150 MW Dartmouth hydro-electric project. power station would be operational. Each of these projects has been approved as an under.: taking of the Commission. 8 The principal alternatives open to the Com­ mission are to develop further the brown coal 3 The attached report, dated February 1976, resources of the State or to develop projects of the Assistant General Manager (Develop­ utilising nuclear energy. A comparison of ment) (Appendix A) describes the project in brown coal and nuclear projects shows the detail and sets down the considerations which economic benefits to be gained by continuing led to a recommendation that the project be ap­ to utilise brown coal for the State's base load proved. This report has been adopted by the electricity generation and the advantage of Commission. reliability to be gained from the use of in­ digenous fuel resources. 4 The proposed project has been the subject of a public inquiry by the Parliamentary Public 9 During the period of development of the Works Committee which, in December 1975, Loy Yang base load project, additional peak issued its Progress Report No 1 which broadly load power stations will be necessary to sup­ endorses the proposals. plement the base load installations as well as the Newport Power Station which will have to 5 The project entails the opening and utilisa­ provide substantial regulating energy. This will tion of a third major coal field in the Latrobe ensure that there is available an acceptaole Valley, following the plans for development of total amount of generating plant to satisfy the the Yallourn field to its economic limit with the Commission's duty to provide a safe, economic expansion of the Yallourn W undertaking to and effective supply of electricity. Recommen­ 1450 MW, and having regard to the limited dations will be made at a later stage in relation resources of the Morwell open cut area without to peak plant requirements, which, since the a major change to the course of the Morwell completion of the Snowy Mountains Scheme by River. The three coalfields on which a 4000 MW the Commonwealth Government, must now be project could be developed are shown in Plate provided entirely from the Commission's own 2. The Maryvale and Narracan alternatives were resources. 10 The expenditure, including overheads, for 14 These forecasts of electricity requirements the first 2000 MW stage to the completion of Loy are near to the "low level" forecasts contained Yang A Power Station is estimated at $920M at in the Government's White Paper (Part 1 ), Sum­ January 1976 price levels, including $40M for mary of Victorian Energy Resources and Esti­ the extension of the transmission system from mated Requirements 1974-2004, prepared by Hazelwood Terminal Station to the Loy Yang the Ministry of Fuel and Power. The Parliamen­ Power Station. lt is believed to be in the best in­ tary Public Works Committee, in their Progress terests of the State that the substantial capital Report No 1, stated that- investments entailed in developing an open cut "The views of the State Electricity Com­ and common services for a new project should mission regarding the progressive in­ be spread over an increment of new generation crease in demand for electric power ap­ of not less than 4000 MW. pear to be quite realistic and well 11 The estimated cost of the 4000 MW authenticated, and the validity of for­ development comprising the open cut, two ward planning to provide for this de­ power stations and associated works is $1635M mand cannot reasonably be ques­ at January 1976 price levels, including $65M for tioned." extension of the transmission system from 15 The Commission's estimate of electricity Hazelwood Terminal Station to the Loy Yang requirements corresponds to a rate growth Project. averaging 6.6% pa compounded over the period up to 1990. This rate of growth is lower 12 The additional cost for reinforcement of the than that experienced over the past 15 years main transmission system from Hazelwood Ter­ when, during a period of high migration, rapid minal Station to the metropolitan load centres industrialisation and recovery from the periods for the 4000 MW Loy Yang development is esti­ of shortages after World War 2, the demand for mated to amount to $112M at January 1976 electricity grew at an average annual com­ price levels. pound rate of 7.8%. BALANCED DEVELOPMENT OF THE GENERATING SYSTEM 16 The Commission's generating system re­ quires the development of new projects to meet GROWTH OF ELECTRICITY both the growth of demand and energy and to REQUIREMENTS replace obsolete plant. lt is necessary to main­ 13 The following table records the Commis­ tain a proper balance between the base load sion's latest estimate of the coincident max­ plant, which operates for extended periods and imum demand and energy at generator ter­ supplies the bulk of the energy requirements minals up to 1992: and therefore must h~ve low operating and fuel costs, and other plant types which meet the variati"ons in daily demand and cover outages of Financial SEC Estimate: the base load plant. Year Ending April1975 17 The determination of the most appropriate 30 June Maximum Energy plant mix on the system requires a process of Demand Requirements optimisation of the variables of capital cost of MW GWh different plant types, i.e. brown coal, hydro, gas 1976 3650 18 500 turbines, etc, cost and availability of fuel, plant 1977 3900 19 500 performances, operating costs and the like, in 1978 4100 21 000 order to achieve the minimum production cost 1979 4350 22 500 for annual and daily energy requirements. 1980 4600 23 500 1981 4950 25 500 18 The bulk of the regulating energy should be 1982 5250 28000 provided by plant which can achieve the lowest 1983 5600 29500 practicable cost of production over a wide 1984 5900 31 500 range of loading and the peak loads from which 1985 6300 33500 little energy is required should be supplied by 1986 6700 36000 plant with the minimum capital cost and operat­ 1987 7100 38000 ing costs. 1988 7550 40500 19 Over the past 50 years, it has been possible 1989 8000 43 500 to develop large base load generating units 1990 8550 46000 utilising the difficult to burn low-grade brown 1991 9050 49000 coal in the Latrobe Valley and, in 1974-75, 1992 9600 52500 brown coal fuelled units produced 85% of the 2 State's requirements for electricity.