Clough, part of the Webuild Group, has been awarded a €116 million Design and Construct contract by AGL Energy for the Kwinana Gas Power Generation 2 (K2) Project, a new 220 MW open-cycle gas turbine power station to be built in Kwinana, 40 kilometres south of Perth, Western Australia.
The contract, 100% held by Clough, with e2o – also part of the Webuild Group – collaborating on delivery. AGL reached its Final Investment Decision for the project in March 2026, with construction expected to begin in mid-2026 and commissioning targeted for Q4 2027.
Kwinana Gas Power Generation 2 — Project Background
The K2 Project will be built adjacent to the existing Kwinana Swift Power Station, located within an established industrial energy precinct at Kwinana Beach, Western Australia.
The facility will deliver fast-start, dual-fuel generation capacity – capable of operating on natural gas, diesel, and alternative fuels – to provide critical backup generation that supports the increasing penetration of renewable energy across the South West Interconnected System (SWIS).
The project aligns with the Western Australian Government’s commitment to retire all state-owned coal-fired power generation by 2030. The K2 facility has been assigned 176 MW of Peak Certified Reserve Capacity from October 2027, timed to coincide with the next phase of coal generation retirements in the SWIS.
Contract and Scope of Works
The K2 Project involves the installation of four new open-cycle gas turbines (OCGTs) delivering an additional 220 MW of fast-start capacity. Combined with the existing 120 MW from the K1 facility, total site capacity at the Kwinana precinct will increase to approximately 340 MW once K2 is commissioned.
Key confirmed contract and project details:
- Contract type: Design and Construct (D&C)
- Contract value: €116 million (100% Clough)
- Client: AGL Energy
- Contractor: Clough (Webuild Group), with e2o
- Capacity: 220 MW, four open-cycle gas turbines
- Fuel: Dual-fuel — natural gas, diesel and alternative fuels
- Location: Kwinana, 40 km south of Perth, Western Australia
- FID: March 2026
- Construction start: Mid-2026
- Commissioning target: Q4 2027
- Peak Certified Reserve Capacity: 176 MW from October 2027
- Peak construction workforce: More than 200 people
Marco Assorati, Webuild Senior Executive Vice President of Operations and Executive President for Clough, said:
“We are pleased to be awarded this important project, which supports Australia’s transition to renewable energy sources such as hydro, and emerging firming and storage technologies. K2 strengthens Western Australia’s energy system and reinforces Clough’s commitment to delivering essential infrastructure that contributes to a more sustainable and secure energy future.”
K2 Delivery Profile — Construction Implications
The K2 award is a full Design and Construct package, which places design responsibility with Clough from the outset and ties delivery performance directly to the commissioning milestone. That structure matters on a project like this because the Q4 2027 commissioning target is not arbitrary – it is aligned to the next phase of coal generation retirements in the SWIS, which means grid readiness, energisation sequencing and capacity certification all converge at a fixed programme point.
On open-cycle gas turbine projects of this type, the critical interfaces typically sit across civil foundations, turbine supply and installation, HV connection works, control and protection systems, and final commissioning. Where those interfaces compress under schedule pressure, the commercial effects can move quickly into construction claims territory, particularly where completion milestones are tied to grid entry dates.
If delivery timing shifts, the broader consequences may include delays and disruptions and questions around liquidated damages – both of which are especially pointed on utility-connected generation assets where commissioning cannot slip without affecting system reliability.
The involvement of e2o alongside Clough also signals an integrated approach to commissioning and operations readiness, with e2o’s platform covering mechanical, electrical and piping commissioning as well as operations and maintenance services.
Western Australia Energy Market Outlook
The K2 contract reflects a clear direction in the Western Australian energy market: gas-fired peaking generation is being built in deliberate lockstep with the renewable rollout, not retrofitted after the fact. As coal exits the SWIS, firming capacity is being procured ahead of the reliability gap rather than in response to it.
That pattern is visible across the broader Australian energy transition, where the demand for fast-start generation and grid-scale storage is driving a sustained pipeline of major delivery contracts. In the battery storage space, GenusPlus’ Wagerup BESS in Western Australia and the Reeves Plains BESS in South Australia illustrate the same underlying logic: energy storage and firming infrastructure are now treated as system-critical assets that require the same project delivery rigour as large-scale generation.
For contractors with gas, power and industrial construction capability, the Western Australian firming pipeline is among the more active procurement environments in the country over the next two to three years.
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