Australia state faces power shortages by 2009

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SYDNEY, Oct 31 (Reuters) Australia's eastern states have enough electricity for the next two summers, but Queensland state could face blackouts and soaring electricity prices by 2009, the country's national power administrator said today.

A lack of new plants coming on stream and a severe drought in the northern state of Queensland could lead to power blackouts by the summer of 2009, the National Electricity Market Management Company (NEMMCO) said in its annual power report.

''There is enough supply in the National Electricity Market for the summer of 2007 and 2008, even if extreme temperatures and demand conditions occur,'' Les Hosking, managing director of NEMMCO, said in a statement.

NEMMCO said Queensland could avert a power shortage in 2009 should one or two 350-megawatts generating units at the Tarong power station return to full summer capacity.

Water restrictions in Queensland have forced several coal-fired power stations to cut generation capacity, while other hydro-electric power stations have also reduced production due to low dam levels.

Other states such as Victoria and South Australia, which was previously forecast to require new plants by 2009, would only need new capacity by 2010, due to plans for two new power stations and a reduction in forecast peak electricity demand.

Origin Energy Ltd plans to build a 120-megawatt gas-fired peaking generator in South Australia, while AGL Energy is planning the 140-megawatt Bogong hydropower project in Victoria.

NEMMCO said demand would outstrip supply in Australia's most populous state, New South Wales, by 2013 or 2014, while Tasmania would not require any additional capacity until 2016-17.

Power demand is growing by 3.6 per cent a year in Queensland, the fastest growth in the market. New South Wales power consumption is increasing at 2.5 per cent a year, while South Australia and Victoria have annual growth of 2.1 per cent and 1.8 per cent respectively, NEMMCO said.

Australia is in the grip of the worst drought in 100 years and has experienced severe early season bushfires and record unseasonal temperatures as an El Nino has brought hotter, drier conditions.

The drought has pushed up wholesale power prices in Queensland and New South Wales by nearly 200 per cent from a year ago, while other states are experiencing only slightly lower increases.

REUTERS SYU DS1143

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