AGL will construct an A$230M (US$173M), 140MW hydroelectric peaking power station at Bogong, in the Kiewa valley, in Victoria’s Alpine region.

The Bogong plant will be built adjacent to Bogong village at the base of lake Guy, augmenting the existing Kiewa hydroelectric scheme. The project will transform Kiewa into a more efficient peak operation by enabling the nearby 150MW McKay Creek power plant to operate at its maximum capacity of 160MW and enabling instantaneous water delivery to the 29MW Clover power station, also part of the Kiewa scheme.

Bogong has been designed to minimise the current environmental impacts of the operation of McKay Creek by returning the Pretty valley branch of the East Kiewa river to natural water flows during normal operation. This will be achieved through the construction of a 6.5km underground tunnel between McKay Creek and Bogong.

AGL has also announced the commissioning of the nearby 12.2MW Banimboola hydroelectric plant, to optimise the generation capabilities of the Dartmouth reservoir and provide additional generation during peak demand months.

Both power stations, when in full production, will provide enough electricity to meet the summer demand of approximately 122,000 average homes and realise the abatement of more than 185,000 tonnes per year of greenhouse gas emissions.

The company’s decision to proceed with Bogong follows the Victorian state government’s recent announcement of a Renewable Energy Target Certificate (VRET) scheme to commence in 2008. It is to be fully commissioned by October 2009 in time to meet the 2009/10 peak summer demand.

Bogong and Banimboola will be owned by the AGL Energy business to be created following the successful merger of AGL and Alinta Limited’s infrastructure businesses. Shareholders will vote on this proposal early next month.

AGL has awarded two major turnkey, engineering, procurement and construction (EPC) contracts for Bogong to McConnell Dowell Constructors (Australia) and Toshiba International. Approximately 200 jobs will be created during the construction phase.