Owner of Pelican Point power station says it cannot rescue South Australia from on-going blackouts
THE power plant owner at the centre of last week’s blackout blame game says it shouldn’t be relied on to rescue the state in the event of another crisis.
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THE power plant owner at the centre of last week’s blackout blame game says it cannot make its extra electricity capacity available to the market and shouldn’t be relied on to rescue the state in the event of another crisis.
Engie, the owners of the gas-fired Pelican Point station, said high costs and a lack of gas reserves meant its mothballed second unit would not be switched on.
“In the case of the events starting 6th February, the second Pelican Point unit has no gas contracts in place, which means Engie in Australia is unable to guarantee supply to the market through the bidding system operated by AEMO,” the company said.
It comes as the operator of a high-voltage interconnector declared it would cost $1 billion to extend into NSW, bringing much needed energy to SA.
Energy Minister Tom Koutsantonis criticised the national market operator when Engie failed to fire up the 240MW unit on February 8.
The operator instead ordered “load shedding” blackouts, which affected tens of thousands of households.
The State Government has argued that South Australia has enough baseload power to cope with extreme demand, but says it is developing plans to intervene in the energy market to help secure the state’s electricity supply.
Engie is also working to secure sufficient private sector contracts to make it commercially viable to permanently activate the second unit.
But in a statement last night the company argued it cannot compete with cheaper wind energy and it is commercially unviable to only occasionally switch on a gas-fired power plant.
“There is no commercial rationale to operate the second 240MW-capacity Pelican Point unit in the current market environment in SA for a small number of high-demand days across the year,’’ the French-owned company said.
“Regardless, Engie in Australia is not able to make the capacity of the second unit available to the market, given that there are no firm gas supply arrangements in place to operate the second unit.’’
Pelican Point’s first unit provides about 25 per cent of SA’s power needs.
On February 9, the Australian Energy Market Operator ordered the station to turn on a second unit to prevent a repeat of the previous day’s blackouts.
“It is important to understand that South Australia has one of the most fluctuating energy load profiles in the world, with demands of the size seen in the week starting 6 February (3000MW) experienced for only a handful of days a year,’’ Engie said.
“Outside (that) demand is typically 1200-1500MW.”
Mr Koutsantonis last night blamed the national energy market and AEMO for the problems with Pelican Point. “The events of last week clearly demonstrate that the market is broken,’’ he said.
“Even when wholesale electricity prices were at the maximum rate, Engie did not bid into the market.
“Ultimately, it is AEMO’s responsibility to ensure all available generation is dispatched if required, and to direct that generation on if necessary. In this case, they failed.”
Pelican Point can be directed by AEMO to temporarily fire up it’s second unit in extraordinary circumstances but requires four-hours notice.
Opposition energy spokesman Dan van Holst Pellekaan said the state had become over-reliant on intermittent sources of energy, such as wind.
“Highly variable demand can be met by enough reliable baseload supply, but unfortunately the State Government’s 50 per cent renewables target has driven baseload away and delivered too much wind energy,” Mr van Holst Pellekaan said.
“The 50 per cent renewable energy target closed the Port Augusta power station too soon and is forcing existing gas generation capacity to remain idle.’’ In the wake of last year’s statewide blackout, energy regulators introduced new rules requiring at least two gas power stations to be switched on at all times in SA to help stabilise the grid. Federal Energy Minister Josh Frydenberg and state and territory ministers were yesterday briefed on last week’s blackouts during a teleconference.
Mr Frydenberg said the Federal Government had asked the Bureau of Meteorology to work with AEMO to help strengthen the network operator’s weather forecasting capability.
“This change should improve AEMO’s capability and improve its ability to manage demand and supply, as it currently relies on private sector services for weather forecasting,’’ Mr Frydenberg said.
Engie will close its coal-fired Hazelwood power plant in Victoria next month, which is expected to increase pressure on the power network in Victoria and in SA.