ERM Power was founded as a specialist Australian energy advisory firm in 1980, transitioned to a generation developer in the mid-1990s and was Australia’s largest private energy sector company before listing on the Australian Securities Exchange (ASX) in December 2010.

The Braemar Project The Braemar Project is a collection of gas-fired power stations 40 km southwest of Dalby, Queensland. Braemar 1 and 2 have capacity of 504 and 519 megawatts (MW) respectively, and the proposed Braemar 3 Project would have a capacity of up to 550 MW.

Braemar 3 is our third Braemar project, and the seventh major power project for ERM. In the last five years, ERM has developed about 29 per cent of all new scheduled generation commissioned in Australia. Braemar 3 is really being advanced for financial close, which we’re expecting to occur late in this calendar year. The projects generally take about two years to build. If all goes to plan we’ll bank it by the end of the calendar year and it’ll be ready in service, pumping megawatts into the grid by December 2013.

In respect to the balance of the plant, and ancillary equipment and so forth, we have a combination of sourcing locally and abroad. We don’t have Australian manufacturers of large power generation turbines.

We don’t consider any supplier that’s new, we don’t consider any technology that’s new. ERM prefers proven brands and proven technology.

Future expansion We are currently in with the government departments seeking approval for Braemar 4 and we have pre-feasibility planning going on for a Braemar 5. Our pre-feasibility conceptual planning for these projects commences seven to five years out from the project’s start.

Braemar is a location that ERM identified back in the mid-1990s as being the most appropriate place to build new power generation to meet the growing needs of the South East Queensland for future decades. Since then we’ve built Braemar 1, Braemar 2, we’re ready to build Braemar 3 and people have been building across the road and down the street from us.

Gas is the solution In the last decade, the best and most appropriate solution for the Australian market has been gas, from both an economic and an environmental point of view. When wind and solar represent the best solutions for Australia, we will be building wind and solar. But at the present time, and for at least the next decade or two, Australia will serve itself best by a country mile by investing in gas-fired power generation because it represents the most affordable power supply and carbon reduction available to Australia.

In our opinion, every dollar that’s spent on wind and solar is a dollar that could’ve been spent to actually deliver more carbon reduction for Australia.

A price on carbon? Until we start replacing coal as our power source, Australia will not make significant contributions to its carbon footprint.

An impost on carbon will be an advantage to ERM, but what’s best for Australia in our opinion is not a broad-based system which taxes everything. It isn’t necessary – no example around the world gives confidence that it actually works.

What we do know is where incentives have been given to drive or promote the use of lower-emission technologies, that has delivered benefits. The gas/electricity certificate scheme in Queensland has been running for about seven years, where incentive was given to generate electricity with all the gas that we have here.

That scheme has resulted in about $2 billion worth of gas investment in power generation in those seven years, and delivered an approximate 10 per cent reduction in the carbon footprint from the sector in Queensland. And the consumers have hardly felt the cost.

Australia needs to take advantage of that, but nationwide, not just in Queensland. More carrot, less stick. They need to give a helping hand to the next most sensible, affordable technology to displace coal, and that is clearly gas.

Community engagement Working with the local community is not a ‘nice to do’, it’s a must-do. Communities can enable you or give you the right to join their community. That’s actually one of the first things we think about with power station locations. We’ve not only got to think about the location in respect to economic factors such as proximity to fuel and proximity to transmission lines, but we also need to think about proximity to population and environmentally or culturally sensitive areas.

The best advice is early engagement and early consideration in your original initial selection of the site.

We set up community consultation groups, and they have regular meetings, providing an opportunity for people in the community to talk to us face-to-face.

Competing for skills We’ve been through the previous mining boom and we’ve seen skills issues arise and we’ve managed through them. They’re real, but it won’t prevent us from doing the projects. When we package up and contractually arrange for our power stations to be built, we sheet the risk of acquiring suitable labour for the project to the contractor.

In addition, being the leading developer and builder of power stations in the country, we don’t have a problem getting the cream of the crop in terms of engineers and people helping us.

Since listing on the ASX in December? It’s been a very good half year for us and that’s despite some fairly major challenges in the two or three months since listing. The floods in central Queensland, the floods in southeast Queensland, the cyclone in northeast Queensland and the recent heat waves across the eastern seaboard, all impacted electricity customers and electricity markets in a big way. We’ve weathered all of that and we’re right on track. ERM is robust and can weather the storm – literally.

Outlook for the gas industry The rate at which they’re discovering gas in this country is good for Australia and it’s good for us. Gas has proven to be the best solution and we expect that only to get more and more strong in terms of it being the best solution. So the outlook is all good – good for the gas industry, good for our business, and good for Australia.