Tag archive: NSW

AGL to Build $400 Million Gas-Fired Power Plant in NSW

AGL will build a $400 million gas-fired power plant near Newcastle, NSW to replace the ageing Liddell coal-fired station.

The energy company said it is assessing sites for a 252-megawatt facility development, due for completion in the end of 2022.

“AGL is committed to supporting the orderly transition of Australia’s electricity generation capability to modern, clean and reliable energy supply,” said AGL chief executive Andy Vesey.

“That’s why we gave seven years’ notice of when we intend to close the Liddell power station at the end of 2022 and we are pleased to commit today to build the power station near Newcastle.”

AGL also said there were plans to “assess the potential” to develop a further 500 megawatts of gas-fired generation capacity, pending commercial and industrial demand.

The company’s announcement to the Australian stock exchange followed pressures from the federal government to sell Liddell power plant instead of closing it. Rivalling company Alinta has expressed interest in acquiring the power plant to keep it open until 2029.

Federal Environment Minister Josh Frydenberg said Liddell’s closure would still bring blackout risk, even with the replacement plan. “That’s why it’s really important that the executives of AGL consider on its merits this offer that comes from Alinta,” Frydenberg said.

The Australian Energy Market Operator (AEMO) said there would be a potential shortfall in capacity of 850 megawatts if Liddell was to be closed, but it also said AGL’s replacement plan “would deliver sufficient dispatchable resources to fill the identified 850MW resource gap”.

News: NSW Housing Investment Sets Record High

Housing investment in New South Wales continues to grow as current levels are getting close to record highs, new Australian Bureau Statistics reports revealed.

Latest ABS data found that the value of residential lending in the state reached $7.19 billion in November 2016, the highest on record for the year and a significant 25.5 per cent increase from the previous month’s $5.7 billion.

The November value was also the second highest on record for NSW, with the highest being $7.36 billion in June 2015.

Investor loans constituted 56.7 per cent of all approved residential lending in NSW over the month, making it the highest market share nationally, followed by Victoria’s 45 per cent.

NSW’s residential investor lending represented 56.1 per cent of all approved lending in Australia in November. “This is clearly a record result, eclipsing the previous high of 48.8 per cent reported over March 2016,” said Andrew Wilson, chief economist at Domain Group.

“The strong Sydney market remains a magnet for investors with demand set to continue to rise attracted by continuing solid price growth and a tight rental market with rising rents consolidating gross yields.”

Wilson expected the NSW market to continue its growth, prompted by the possibility of better investment property taxes and rate cuts after 2015’s hike in mortgage rates.

“Residential investors have stormed back into the market since May 2016 driven by the prospect of possible changes to the tax treatment of investment property and interest rate cuts,” said Wilson.

“NSW generally and Sydney specifically remain the epicentre for what has re-emerged as unprecedented activity from this group.”

Cameron Kusher, head of research at CoreLogic said while NSW and Victoria might seem promising, investors should be mindful of the long-term risks.

“It’s clear that demand for mortgages from the investor segment is picking up, particularly in New South Wales and Victoria, which are proxies for Sydney and Melbourne respectively,” said Kusher. However, he added that investors should also think about the risks from long-term value growth phase as well as the historically low rental earnings.