Victoria’s energy problems post a risk for South Australia this summer
Reliability of SA’s power system is pretty much fixed — but a new threat is emerging. And it doesn’t come from here.
- Tighter summer supply after Victorian power plant closure
- Victoria wholesale power generation price worse than SA, ACCC finds
Problems in Victoria are emerging as the key risk to electricity supply in South Australia this summer.
“The SA Government is working hard to ensure that we have sufficient generation capacity for our needs this summer, but the situation in Victoria is cause for genuine concern,” acting Energy Minister Rob Lucas said.
His concerns amplify comments by federal Energy Minister Angus Taylor.
“I do have concerns about Victoria this summer and sadly, the way that our National Electricity Market works is those concerns can be contagious,” Mr Taylor said.
“If Victoria has serious problems, that will affect or has the potential to affect other states.”
Under National Electricity Market protocols, when there is a shortfall in supply a pain-sharing principle applies where load shedding must be spread throughout interconnected regions.
In Victoria, one of the unit’s at AGL’s Loy Yang brown coal-fired power station in the Latrobe Valley broke down in May and is unlikely to be fixed before December.
AGL said on Thursday this would reduce its annual profit by up to $100 million.
A fire last month damaged Origin’s gas-powered plant at Mortlake. It also is not expected back on line before December.
The Australian Energy Market Operator has yet to make an updated forecast of summer supply.
However, Paul McArdle, chief executive of market observers Watt Clarity, said analysis of AEMO’s regular data showed an increasing chance of a supply shortfall in SA early next year.
Before going on leave, Energy Minister Dan van Holst Pellekaan told parliament that AGL had asked for approval to defer planned closures of two units of its Torrens Island Power Station.
“Our government is very aware of the need to support Victoria through summer, as shortages there can affect us too,” Mr van Holst Pellekaan said.
Australian Industry Group chief executive Innes Willox said supply in Victoria looked tight.
“We should soon see a revised set of reliability projections from AEMO, but the electricity market is looking much tighter for the summer of 2019-20 than most expected a year ago,” he said.
“A series of outages at ageing power plants, the ongoing impacts of the drought on hydro generation, and the risk of extreme weather are all sobering.”
In January, breakdowns and extended maintenance at Victorian plants led to load-shedding affecting more than 200,000 customers.
Energy fellow at the Grattan Institute Guy Dundas said the January events were exceptional with extreme heat in Victoria and SA, including Adelaide’s record 47C.
“There’s always some risk but if the (two Victorian plants) are fixed by December it’s a fairly normal summer outlook,” he said.
“If you have very hot weather timed with multiple coal units breaking down, then you can get into trouble.
“But if that doesn’t happen, we should be fine.”