AGL shelves plans for 1,000 MW Dalton gas-fired power station

Australian energy major AGL Energy announced it has suspended plans for its 1,000 megawatt Dalton gas-fired power station in New South Wales.

The news comes on the heels of government approvals in July and announcement of an engineering, procurement and construction contract with General Electric (NYSE: GE) and Leighton Holdings for Phase 1 of the project.

Citing challenging market conditions, AGL said the “economic viability” of the planned A$1 billion project had been under consideration for some months.

Several media reports have pointed towards a downturn in electricity demand and uncertainty in new regulatory pricing as driving factors behind a market unsuited to new power development in Australia.

As of now, the Dalton project is on hold indefinitely; however, AGL did confirm that government approvals for the gas-fired station will remain valid for the next five years.

"We could certainly take it off ice if demand changes, economic conditions change - all those sorts of things," an unnamed AGL spokesperson told The Herald Sun Friday.

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