The State Government has conditionally agreed to build stage one of a major power line in the Mid-West after about $200million in potential savings was identified by a review team.

The Government requested a formal review of the power line, also referred to as the North Country Reinforcement Project, which extends from Pinjar to Moonyoonooka (near Geraldton), after the initial cost estimates more than doubled - from $300million to $689million.

Premier Colin Barnett and Energy Minister Peter Collier made the announcement following Regional Cabinet today. The review team, represented by the Office of Energy and the departments of State Development and Treasury and Finance, was asked to ensure that initial cost estimates were defendable and to explore possible deferral and staging options.

Mr Collier said the review team analysed electricity demand forecasts and found that without the power line, the risk of outages in Geraldton would only start becoming significant after 2015.

“The review team also recognised that there are a number of major Mid-West projects that are well under way and will require access to substantial electricity supply,” he said.

“As a result, the review team proposed that the 330kV line initially extends from Pinjar to Eneabba to encourage progress of Gindalbie’s Karara mine, six prospective wind farms and a major new power station.”

The Minister said the Liberal-National Government gave the go-ahead for the project on a number of conditions, such as confirmation by Western Power of the review team’s findings that Geraldton would receive adequate power supply until 2015.

Other conditions required a new business case for stage one as well as appropriate regulatory approvals. 

“This conditional approval will ensure that Government funding for this significant but costly project will proceed only if it can be justified by the growth in energy demand and the adequate progress of proposed projects that rely on access to the network, or the availability of supplementary funding from the Commonwealth,” Mr Collier said. 

“Through this approach, the State Government can clearly demonstrate to industry the basis under which the transmission lines will be funded and built.

“It also provides major project owners with the assurance needed to progress their planning and funding activities.

“Stage-two of the project, which will involve extending the line to Moonyoonooka terminal, outside Geraldton, would be built at a later date subject to further justification.”

Once necessary approvals have been given, stage one of the project is expected to take 26 months to complete.