New Zealand energy company Contact Energy Ltd and its cornerstone shareholder, Edison Mission, have given the go-ahead to a ASD 164 million peaking power plant in Victoria. The 300mw facility, to be known as Valley Power, will be constructed on a site adjacent to Edison’s existing operations at the Loy Yang B power station in the Latrobe Valley. The project will consist of six refurbished generators, each with a nominal capacity of 50mw. The primary function of the dual-capacity plant will be the supply of gas under a long-term agreement. Contact Energy said the plant would also be used to provide electricity at times of peak power prices, particularly during outages and at the height of summer when demand was greatest. Contact Energy estimated its share of the project costs at ASD 66 million, which on current estimates would give it around 40% of the project.