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The assessment for Streaky Bay included comparisons of desalination using proven
technology and a pipeline solution. The pipeline solution was assessed as being
more cost efficient and in keeping with the Master Plan for the whole of the Eyre
Peninsula - a document that will be finalised in several months.

Desalination using membrane technology is subject to economies of scale, is a
process that is allowed little variation in flow and requires 4 to 5.5 kW of power per kL
produced. Desalination of brackish water from the Tod Reservoir and seawater at
Ceduna are two options being considered for supply of the whole peninsula in the
Master Plan document. Power from Wind Farms and Solar Ponds and multiple flash
distillation using solar energy is also being considered but at a much larger and thus
more cost effective scale than would be required for Streaky Bay.

A desalination plant for Streaky Bay would be required to produce 500 kL/day or 20.5
kL/hr and would thus require a power source capable of supplying 115 kW/hour.

There are several alternative methods of producing the power required. Power could
be supplied from the existing grid or power could be sourced from a purpose built
wind or solar supply. Any power supply that does not involve a grid connection for
backup power will require an increase in plant capacity and cost.

Although the Eyre Peninsula is reputed to be one of the ten best places in the world
for harnessing wind energy there are several consequences of providing a purpose
built power supply.

If there were no grid connection the plant would need to be up to twice its current
size with additional balancing storage to accommodate variations in power supply
and demand. On a peak demand day the plant needs to operate at full capacity for
24 hours and utilise 70 % of the available balancing storage. Battery storage to allow
plant operation during low wind periods would be a very expensive and high
maintenance option. The cost of such an installation would be prohibitive.

If a grid connection sufficient for the total plant operation were available then the
plant could remain at its current proposed size. A wind generator could be sized to
supply the plants full load with excess energy generated at times of low demand to
be sold to the grid. The power available from a wind generator is in proportion to the
square of the diameter. The cost of power from such a source thus becomes more
economic as the size increases and for this reason 1-2000 kW generators are
becoming common around the globe. As the size of the power installation for
Streaky Bay would be small by world standards, the cost of power to the plant would
be far more than that commercially available from the grid. Smaller installations are
only being used in areas where the alternative power source is from a diesel

There are currently five proposals to place wind farms on the peninsula. These are
positioned south of Streaky Bay due to the more favourable wind conditions. These
are commercial projects able to supply power at less than the current supply cost. A
proposal for Elliston approved by the government is for a 115,000 kW wind farm. It
would be foolish for the government to build a small wind power installation at
Streaky Bay when power will soon be available from such sources. It may be
possible for SA Water to purchase power directly from the owners of the wind farm
and pay a fee for transmission costs. This would occur whether or not the

Supplement Two to PWC Submission for Streaky Bay                            Page 1 of 2
desalination plant was located at Streaky Bay. A plant at Tod Reservoir would be
closer to the proposed wind farms.

Streaky Bay receives over 300 days of sun per year and there are several solar
technologies that could be used to supply power. Mono-crystalline photovoltaic cells
are the most suitable for high operating temperatures. Several companies in South
Australia design and install such systems with Natural Technology Systems and Eco
South being the most pro-active.

A standard 1585x836 panel is able to produce a peak output of 175 Watts and has a
warranted life of 20 years. If a large battery bank is not used to even out power
fluctuations the most common and cheapest form of supply uses a grid connected
inverter to allow power to be supplied to the grid when the sun is shining and to use
grid power at night. Currently AGL purchase power for the same amount that it is
supplied, ie 14.66c/kW. There is no guarantee that this will continue and it is
expected that the purchase price will fall over the next few years. The current pool
price for power in South Australia is 4.5c/kW rising to 10c/kW in the peak of summer.

A grid connection combined with a solar supply would allow the plant size and
balancing storage to remain as designed, as there would be no restriction on power
supply to the works. However the cost of the system to supply the full needs of the
plant would be in the order of $3 million. This would have a payback period
exceeding 20 years. It is anticipated that the government would not approve
expenditure with a payback period exceeding the warranted life of the panels.

A solar flash distillation power generation proposal has been suggested for Whyalla
with an output of 18,500kL per day and supplying 24,000 kW. The technology
required is in its infancy but the plant needs to be of this size to be economically
viable. The capital cost is expected to exceed $60 million. The Department of
Industry and Trade together with the Federal Greenhouse Office are assisting
Anutech in development of this proposal.


Alternative energy supplies need to be very large before the cost of power supplied
becomes competitive with traditional sources. The power requirement of a
desalination plant at Streaky Bay is small compared with current economically viable

The cost of providing desalinated water to Streaky Bay using conventional power
sources is more expensive than provision of water via a pipeline from existing or
proposed future sources. As confirmed in the previous supplementary information,
option 5 involving a 200mm diameter main from the Tod-Ceduna pipeline remains
the preferred option.

Alternative water supply and power sources are being investigated as part of the
Master Plan for the entire Eyre Peninsula. Some of these technologies are in the
developmental stage and cannot be considered for Streaky Bay due to time
constraints. The supply of additional water for the entire Eyre Peninsula will provide
water more cheaply than any non-pipeline solution for Streaky Bay.

Streaky Bay will be restricted to a supply for drinking and sanitation purposes only if
the supply is not augmented by December 2002. The longer the approval process
takes the more likely this event is to occur.

Supplement Two to PWC Submission for Streaky Bay                            Page 2 of 2

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