Energy market operator warns there is a real risk to Victoria’s power supply
The “significant pressure” on the state’s electricity supply is expected to worsen as the weather heats up, the threat of bushfires increases and the ability to rely on coal deteriorates. But the energy market operator has a back-up plan.
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A power insurance plan is in place for this summer but the energy market operator warns there is still a “real risk” to Victoria’s electricity supply as historic levels of demand are forecast.
Drought conditions, predicted extreme temperatures, the threat of disastrous bushfires and the “deteriorating reliability” of the state’s coal-fired generators are putting the electricity grid under “significant pressure”.
The market operator is also nervously waiting for broken units at the Loy Yang A coal-fired station and the Mortlake gas station to be returned to service this month after lengthy outages.
Its summer readiness report, to be released on December 4, says 3700 megawatts of additional generation has come into the grid since last summer, mostly through new rooftop and grid solar generation.
The market operator has also secured an emergency reserve of 125 megawatts to ensure a “reliability standard” — including for major power users to reduce their energy usage at peak periods.
Another 1500 megawatts can be brought online at short notice under more expensive reserve contracts.
Using this reserve system would cost about $44 million this summer if Victoria experiences a similar perfect storm to last January, when power was cut to about 200,000 homes for several hours after coal-fired power stations failed during a heatwave and led to a market shortfall.
“Whilst unexpected events can and do happen, particularly when the power system is under significant pressure and most prone to failure, (the Australian Energy Market Operator) has worked diligently to prepare the power system appropriately, including the procurement of emergency resources,” AEMO chief Audrey Zibelman said.
“The introduction of these resources delivers a welcomed improvement to reliability and reduces the need to procure further out of market reserves.”
“AEMO remains focused on the real risk to power system operations this summer.”
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Victorian Energy Minister Lily D’Ambrosio said the market operator was confident sufficient supply was available despite the “extra stress” on the energy system, particularly due to reliability issues at coal-fired stations.
Federal Energy Minister Angus Taylor said the Commonwealth had developed a reliability plan to “ensure there is affordable and reliable energy for Australian business and households into the future”.