SA’s gas shutdown threatens to black out Victoria and NSW

South Australia bailing on gas production could cause cascading energy woes around the nation – first interstate and then here.

Transmission towers in Sydney. Picture: Getty Images

The shutdown of gas and diesel generation in South Australia and a year-long delay in connecting a vital power cable to New South Wales could see the country’s two biggest states forced into blackouts this summer.

Electricity users face a heightened risk of blackouts during peak ­demand in NSW and Victoria this summer, with the energy market operator forced to bid for ­emergency supplies amid delays in new transmission lines and ­renewables projects.

Australia’s Energy Market Operator (AEMO) blamed the worsening outlook on a series of new delays given a year-long lag delivering the EnergyConnect power cable between NSW and SA and a similar delay to the Central West Orana transmission line.

Multiple hold-ups to battery, hydro storage, wind and solar projects have all added to the tighter outlook while the shutdown of gas and diesel generation in SA will also lead to a supply squeeze in Victoria.

The prospect of holiday power outages during a cost-of-living crisis will ramp up the pre-election contest over Labor’s vision to transform Australia into a renewable energy superpower, overhaul fuel efficiency standards for new cars and pour billions of taxpayer funds into emerging industries.

One week after the budget delivered $300 power bill rebates to every household, a new energy market update says reliability gaps have deteriorated in NSW and Victoria and will decline through the decade in SA. The forecast will ratchet up concerns over a choppy transition to greener power as the bulk of Australia’s coal power stations are retired this decade, and the government proceeds with plans to deploy 32 gigawatts of renewable and clean dispatchable capacity by 2030.

The revised outlook from AEMO lands in a heated national debate over the role of gas which has split the Labor Party and ignited a fresh political row with the Greens, with the government last week committing to the fuel source remaining a key part of the energy mix out to 2050 and beyond.

Last week, Labor also teamed up with the Greens to ditch changes aimed at fixing the “broken” offshore gas approvals system in return for the passage of its petroleum resource rent tax changes and the introduction of tough standards reducing emissions for new passenger vehicles by more than 60 per cent by 2030.

Given the looming reliability risks, AEMO will on Tuesday put out a call to the market for emergency power supplies for NSW and Victoria to minimise the risk of blackouts during peak demand in the coming 2024-25 summer.

NSW faces a reliability gap of over 1000 megawatts of power from 2025-26 which widens to over 3000MW in 2032-33. The figures underscore the challenge for Australia of more than doubling its renewable capacity to achieve Labor’s target of 82 per cent by 2030 while keeping a lid on household bills at a time of cost-of-living stress.

Originally published as SA’s gas shutdown threatens to black out Victoria and NSW