QPM Unveils 112MW Isaac Power Station to Propel Queensland’s Energy Shift

QPM’s Strategic Expansion into Energy Generation

Queensland-based QPM Energy Limited has taken a significant step in its evolution from a gas producer to a broader energy company with the launch of the Isaac Energy Hub (IEH). The first stage of this ambitious project is the Isaac Power Station (IPS), a 112MW gas-fired power plant slated for commissioning by mid-2027. This move aligns with Queensland’s broader energy transition goals, aiming to provide flexible, dispatchable power to complement increasing renewable energy penetration.

Robust Financial and Operational Foundations

The recently completed feasibility study paints a promising financial picture, an average annual revenue of $71 million and an operating margin of $49 million over a 30-year lifespan, supported by a capital investment of $196 million excluding contingency. Central to the project’s viability is the secured supply of gas from QPM’s extensive Moranbah reserves, totaling 435 petajoules, ensuring fuel security and cost advantages. The project’s co-location with existing Moranbah gas processing infrastructure further reduces logistical complexities and capital expenditure.

De-risking Through Equipment and Financing

In a market where gas turbine lead times can stretch beyond five years, QPM has mitigated delivery risks by locking in a fixed-price contract for two 55.8MW GE Vernova aeroderivative turbines. These turbines are known for their rapid start-up capabilities and operational flexibility, ideal for meeting peak and shoulder demand periods. To finance the project, QPM has appointed RBC Capital Markets to arrange development capital, with advanced discussions underway with lenders and infrastructure investors. A recent capital raising has already secured funds for critical long-lead equipment.

Supporting Queensland’s Energy Transition and Market Needs

CEO David Wrench emphasized the strategic importance of flexible gas-fired generation in stabilizing Queensland’s electricity grid amid the energy transition. The IPS is designed to operate primarily during peak demand hours, capturing higher electricity prices and providing grid firming services. Its low short-run marginal cost of $59/MWh positions it competitively within the market. Moreover, the project’s location near the Moranbah 132kV substation facilitates efficient grid connection, addressing local demand volatility driven by mining and industrial activities.

Future Growth and Expansion Potential

While Stage 1 targets 112MW capacity, the site and infrastructure are planned with scalability in mind, potentially expanding to 300MW. An intriguing upside is the possibility of utilizing off-spec waste coal mine gas from nearby operations, which could lower fuel costs and extend operational hours. This flexibility underscores QPM’s commitment to integrating innovative solutions within its energy portfolio.