06 September, 2017

Rob Harris and Matt Johnston

Courtesy of the Herald Sun

 

Victorians will need costly emergency energy supplies — likely to include diesel generators — to avoid a risk of widespread blackouts this summer.

Australian’s energy market operator has warned the state will be in a dire situation if it faces an extreme summer, and says urgent action is needed to ensure supply for household airconditioners and lights.

The recent closure of Hazelwood power station has led to a “tight” supply and demand balance in the national electricity market, which is more vulnerable than ever to the loss of output.

The worst-case scenario could include load-shedding — an intentional rolling shutdown of power sources to reduce demand — which could last four to five hours. And the cost of using emergency supplies would be passed on to consumers in the state which needs to call on them.

A report to the Federal Government, released on Wednesday, has also called for the creation of emergency reserves of energy over the next four years to avoid electricity shortfalls.

This year, the highest risk is in Victoria and South Australia. But Victoria and NSW will also need to generate 1000 megawatts of new supply when the Liddell coal-fired power plant in NSW shuts in 2022.

The Australian Energy Market Operator confirmed it is working with Victoria’s government on connecting diesel generators, and on alternative measures, for this summer.

It has recommended the immediate creation of a short-term strategic reserve of energy — sourced from outside the current grid — to ensure supply security before new wind, solar and hydro-electric projects come on line.

The report could also halt a push from within the Turnbull government to invest in a new coal power station, warning it would be better if owners of coal-fired generators were encouraged to upgrade their plants to extend their lives.

It said the business model of traditional forms of baseload power — such as coal — would be further challenged by the emergence of battery technology and the falling cost of renewable sources.

“The power system does not have the reserves it once had, and therefore to balance peak summer demand in real time, actions to provide additional firming capability are necessary to reduce heightened risks to supply,” AEMO chief executive Audrey Zibelman said.

Prime Minister Malcolm Turnbull said the federal government was in talks with AGL to keep Liddell open for an extra five years despite its chief executive Andy Vessey’s ruling out any delay to the closure.

He said the electricity market was vulnerable because of “Labor mismanagement”, particularly in Victoria and South Australia, which must now take costly back-up measures.

Energy Minister Josh Frydenberg said the report reinforced federal actions to secure the energy system, saying: “The Turnbull government will leave no stone unturned to ensure affordable and reliable power for all Australians.”

But state Energy Minister Lily D’Ambrosio blamed a lack of a national energy policy for “crippling investment and putting pressure on power prices”.

“Our renewable energy target, and investment in battery storage and energy efficiency, are … ensuring we have enough power,” she said.

ENERGY CRISIS

VICTORIA and South Australia are at risk of blackouts this summer during hot days

ABOUT 1000 megawatts of emergency reserves are needed this summer — through diesel generators and by forcing businesses onto private backup supplies

RISK of blackouts to decline from 2018-2019 to 2020-2021, provided no current generators are closed

ALTERNATE reserves of energy needed — either from mothballed gas plants or though paying businesses to feed privately generated power into the grid

CONSUMERS who draw on emergency supply faced with increased bills

RETIREMENT of Liddell coal-fired power station in 2022 will increase the risk of blackouts in Victoria and New South Wales

1000MW of new energy supply needed in grid after 2022