AGL Energy will spend $295 million on a 210 megawatt gas-fired power station alongside its 50-year-old Torrens Island plant in South Australia.
The new plant, which will be based on reciprocating engine technology, will replace two of the four turbines at Torrens A that are to be mothballed because of old age.
Construction on the new Barker Inlet Power Station will start between July and September this year, with full operation commencing in the first quarter of 2019, AGL said on Wednesday.
The energy producer and retailer in June 2016 deferred its decision to mothball half of the eight turbines at its its gas-fired Torrens Island power station in Adelaide because of tightened electricity supply in South Australia.
"Barker Inlet Power Station will be developed, improving reliability and security of supply in South Australia using modern, responsive technology that is more fuel efficient and less carbon intensive than the pre-existing plant," AGL managing director and chief executive Andy Vesey said.
"This reflects our readiness to invest to support our customers' needs as Australia's electricity market adapts to a carbon-constrained future."
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