Massive power shortfalls predicted for next summer in South Australia
EXCLUSIVE: South Australia is at even greater risk of controlled blackouts next summer as a major interstate power station closes and investment for new ones dries up, experts warn.
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SOUTH Australia is at even greater risk of controlled blackouts next summer as a major interstate power station closes and investment for new ones dries up, experts warn.
Modelling from the Australian Energy Market Operator predicts massive and regular shortfalls in energy for SA next summer.
It includes a peak deficit of 531MW, a shortfall five times greater than that which blacked out 90,000 homes and businesses last week.
Victoria, the only state that SA is connected to in the national electricity grid, is also projected to run short on power after the closure of its Hazelwood power station.
SA already relies heavily on the connection with Victoria, which delivers almost 20 per cent of our power.
Energy experts have told The Advertiser that power station owners, governments and the market operator will react to shortfall warnings in a bid to avoid frequent controlled blackouts in SA.
They say measures could include moving power plant maintenance to low-demand times, but warn the overall system is becoming increasingly fragile and harder to properly manage.
Closure of the brown-coal-burning Hazelwood station next month will take about 25 per cent of Victoria’s current supply offline, and is projected to lift SA power bills by $115 this year.
Frontier Economics managing director Danny Price, who advised Prime Minister Malcolm Turnbull on climate change and energy policy in 2009, said the whole system was under strain.
“The fundamental environment is going to be even more challenging than it was this summer,” he said.
“As the system becomes tighter generally, the probability of blackouts increases. It doesn’t necessarily mean that you’re definitely going to have it. The market will respond to that shortfall — it has in the past.”
Mr Price said next summer would be “challenging” for the entire national electricity market.
Without any investment response, the system right across the eastern seaboard would worsen and Victoria could potentially be in a worse situation than SA.
Mr Price said the country desperately needed certainty from Canberra on climate change policy, because constant political brawling stopped investors from building new power stations and increasing supply.
“It’s the key to solving these problems,” he said. “The investment environment is toxic, and that’s because there is no certainty what’s going to happen.
“It’s a sick joke on the Australian economy because all this has been factored rapidly into prices. That just makes us uneconomic.”
He said it was possible to build a new SA power station by next summer, if fast-tracked.
Grattan Institute energy program director Tony Wood said: “You can’t take out 1600MW of generation capacity in Victoria (at Hazelwood) without consequences.
“The dynamic has changed and, if nothing else, the safety buffer that we had has been reduced.”
“It’s not impossible to come up with scenarios which become quite nasty.
“It could be okay, and should be okay, but you don’t have to conceive of many things going wrong for it not to be.”
Mr Wood also lashed Canberra politicians for destroying new power plant investment, saying a decade of political sparring over climate policy had sent the country in a “hopeless” direction.
Responses to strengthen the grid included the market operator being more conservative in its forecasting and quicker to order power plants to turn on, he said.
Policy makers also needed to investigate better back-up systems which could be quickly switched on when wind died down.
Mineral Resources and Energy Minister Tom Koutsantonis said the forecasts could lead power plant owners to bring mothballed units back online and avoid enforced blackouts next summer.
“But tight supply is an issue facing the whole nation,” he said.
“As inefficient, unprofitable coal-fired generation leaves the market, there isn’t other generation in place to replace it.
“That is exactly why experts such as Mr Price, the Chief Scientist, and the CSIRO recommend an emissions intensity scheme, because it incentivises the construction of new gas-fired generation.
“Unfortunately, the Prime Minister has ruled that out, so states are on their own.”
Mr Koutsantonis said the market operator’s failure to order the Pelican Point plant to be switched on last Wednesday showed it also “can’t be relied on to protect customers from load shedding”.
“The State Government is using the procurement of its electricity load to incentivise the entry of new electricity generation into the local market, which will increase the supply capacity,” he said.
“We are also working on a package of more dramatic market interventions that will lower prices and increase grid stability, and will be in a position to announce those policies soon.
“We are going to begin the process of undoing the effects of privatisation, and retake control.”
Opposition Leader Steven Marshall said the State Government’s “dangerous mismanagement” of the electricity grid had delivered a “dual crisis” of higher prices and more common blackouts.
“It has left every single business and household vulnerable,” Mr Marshall said.
“We now have very little contingency in our energy framework. This will continue until we can encourage baseload generators back to SA.
“The bad news for SA consumers is, that under Jay Weatherill’s settings, prices can only go higher.”