Two 120 megawatt open cycle gas-fired units will be replaced by a 240 MW unit which will cut costs and emissions by using more efficient combined cycle technology.Alstom Power Ltd won the tender to supply and install the combined cycle generation at Kwinana, which has a total capacity of 900 MW.
Premier Geoff Gallop said the new plant would be ready by December 2003 and ensure Western Power maintained a core of reliable and efficient plant.
"It will contribute to Western Power's objective to reduce its generating costs by 20 percent over the next five years. This will ensure that electricity prices are held at current levels for another three years," he said in a statement.
The government said combined cycle technology would improve plant efficiency by 50 percent by capturing waste heat from the gas turbine to produce steam to drive a second generator.
It said greenhouse gas emissions would be cut by two million tonnes a year and less waste heat would be discharged into Cockburn Sound.
The asset replacement programme is separate to government plans to provide new plant through a competitive tender process.