Canberra is a step closer to its first gas-fired electricity generator, with a consortium lodging plans for a $2billion, world-class data centre at Hume.
Canberra multi-utility ActewAGL formed the consortium last year to target global financial institutions and large government departments to lease data storage space and fund a $1 billion business case supporting gas-fired electricity.
A decade of studies had failed to establish a case for gas-fired power, until last year when ActewAGL noticed the sudden and dramatic shift in demand for data centre storage.
The consortium, Canberra Technology City, took the concept to potential users in the Asia-Pacific and Australian capital cities, and has now lodged a $2 billion project over the next decade to build a highly secure, non-stop operation.
An ActewAGL spokeswoman said the proposal was always worth more than $1 billion, but the consortium had played down its potential in the beginning.
The natural gas power station will supply electricity and chilled water for multimillion-dollar data pods, with surplus electricity being sold into the ACT and national electricity network.
The consortium comprises ActewAGL, a British-based world leader in data centres, Galileo Connect, Technical Real Estate, which will develop and own the data centres, and CB Richard Ellis.
Canberra Technology City says its leading-edge data centre will provide a comprehensive and environmentally sustainable approach to handling and securing computing and data storage needs for major financial institutions and governments across the Asia-Pacific region.
ActewAGL chief executive John Mackay said the significance of the technology city could not be understated. "It is going to be fantastic for Canberra. We will have a thriving business here.
"Secondly, it will provide jobs for young bright people. Thirdly, it will be a great opportunity for universities to help train the young bright people.
"And fourthly, we are hopeful at the same site we can build a significant separate gas generator."
The second generator would provide emergency back-up power in the event of the electricity grid failing.
"Finally this is a very environmentally friendly way of powering a data centre."
Thirteen data pods will be established at Hume and more will be built later in Belconnen.
The data pods, each worth $70million and taking two years to construct will be provided by Galileo Connect which leads the industry in Europe. The pods come in three and four-storey models and have technical space and front office areas providing service and general administration facilities.
An amenities block for reception, catering, security and general maintenance staff is expected to have 33 employees .
ActewAGL will build a dedicated gas pipeline from Fyshwick.
The gas-fired power is expected to strengthen the ACT's position as a leader in data centre infrastructure. Data centres have traditionally relied on diesel generators for back-up power.
As well as gas the data centre will have two separate electricity lines with the additional power security aimed at attracting high value data centre tenants.
A London-based international bank is among the offshore companies poised to sign a contract to use the new centre. The consortium sought customers for 22,000sqm of data storage but received enough interest for 26,000sqm and may auction the first three buildings at Hume.
Mr Mackay said the response presented a solid case for the gas-fired generators. "All the ducks are lining up nicely and that's why we have gone to this stage, we are cautiously optimistic all of these things can happen.
"We have still got work to do but we would not have submitted a development application unless it was all looking pretty good.
"The underlying case is looking very, very solid. The level of interest from potential customers is looking very encouraging."
ActewAGL's general manager of commercial development, Carsten Lawson, said the project was at a stage where contracts could be signed.
The ACT Government will make a direct sale to Canberra Technology City of the 21.6ha site on the south side of Mugga Lane, across from Mugga landfill.
Mr Larsen said a key was having companies competing with one another to sub-let space, as this would enable them to bid for government business. ActewAGL expects development approval either next month or in June, and will seek final approval from its board on June 30.
Mr Mackay said while the response was promising, the concept had not been marketed to its full potential. "We have been a little bit cautious, as we get closer to something we are convinced we can build we will crank up the marketing substantially."
It was no secret the Commonwealth and state governments had a significant need of data storage and Canberra Technology City hoped to be the one chosen to meet that need. With the Rudd Government setting greenhouse emission targets by the end of 2008 there was strong incentives to build environmentally-friendly power stations.
Technical Real Estate would provide much of the finance, while the gas-fired power station funding would likely come from one of ActewAGL's parent companies.
"We are not looking for the [ACT] Government to carry any of the debt. It will be good for the Government because it will deliver this without [the Government] having to take huge risks.
"While all of this is looking fantastic, it still has to pass the scrutiny of our board who will make the critical final decisions. Nothing is a done deal until that day."