QLD’s Mica Creek Power Station Shuts Down

Image source: Stanwell Corporation

The 60 year-old Mica Creek Power Station near Mount Isa in north-west Queensland will generate its last electricity this morning.

Mica Creek was first commissioned in 1960. Originally a coal-fired power station, it made the switch to gas in 2000. According to the Clean Energy Regulator, Mica Creek Power Station had an emissions intensity of 750 grams of CO2 equivalent per megawatt hour of electricity generation in 2017-18, among the highest for gas burners. Even so, the switch from coal to gas reduced emissions from the facility 43 per cent.

The 218MW power station isn’t connected to the National Electricity Market (NEM) network and has been supplying electricity to just two industrial customers in recent years – and both of those contracts expired last night.

Mica Creek was in need of a costly overhaul in order to supply energy beyond 2020 and was unable to compete with APA Group’s Diamantina Power Station (410 grams of CO2 equivalent per megawatt hour in in 2017-18), which pinched pretty much all of Mica Creek’s customers.

A decision was made by plant owner Stanwell Corporation in May 2020 to put Mica Creek into “cold storage”, effective from today. It was only a couple of months prior to the announcement management seemed confident of its ongoing viability.

This isn’t the first time the power plant has been mothballed. The facility was in cold storage from February 2016 until mid-2017 due to reduced demand, but this time around it looks like it will be permanent.

Diamantina, CopperString 2.0 And Renewables

It would seem Diamantina Power Station’s future is looking very secure and very profitable, having rid itself of a competitor and picking up a couple more major customers in the process – but what about CopperString 2.0¹?

CopperString 2.0 is a proposed high-voltage transmission line that would connect Mount Isa and the North West Minerals Province (NWMP) to the National Electricity Market, supplying lower cost wind and solar power to the region’s mining sector and providing reliable and competitively priced electricity to communities in North West Queensland.

The $1.7 billion project involves a 1,100km high-voltage transmission line running from a substation on the Ross to Strathmore transmission line (south of Townsville) to a substation near Cloncurry, then on to Mount Isa. The region has no shortage of solar and wind resources, and with CopperString in place wind and solar farms incorporating energy storage will likely pop up along its length.

In August, proponent CuString Pty Ltd said ACIL Allen modelling found that every $1 invested in CopperString 2.0 will deliver $4.54 in benefits for Australia.

“Global demand can sustain minerals mining and processing in the NWMP and Townsville driven by new economy minerals and essential commodities used in clean energy, batteries, technology, smart phones, and defence technology,” stated CuString Director Joseph O’Brien. “To be globally competitive the NWMP must have the cheaper and more flexible electricity supply that CopperString can deliver.”

Macquarie Securities analyst Ian Myles suggested (paywall) early last year that CopperString 2.0 would see Diamantina’s role switch from being a baseload power station to providing firming capacity, mitigating any loss in energy-only profitability. Some aren’t so sure.

CuString had envisioned a construction commencement date of mid-2021, but that seems a little optimistic given it was only on December 21 the project’s draft environmental impact statement was released for public consultation. If and when construction does commence, it’s expected to take approximately three years to complete.