Tomago aluminium smelter powers down three times in a week due to electricity shortages
A 35,000 per cent spike in wholesale power prices due to supply shortages has forced a NSW aluminium smelter to shut three times in the past week.
NSW
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A massive 35,000 per cent spike in wholesale power prices due to supply shortages has forced a NSW aluminium smelter to shut down three times in the past week to keep the lights on in Sydney.
The Tomago smelter, which supports more than 1800 local jobs, has had to power down multiple times since May 12 to ensure households across the state have enough power for heating as winter sets in.
Tomago chief executive Matt Howell said the sudden power price hike to $14,500 a megawatt hour was the equivalent of petrol prices going up to $400 a litre.
When wholesale prices peak, the smelter is contractually obliged to temporarily power down to keep the rest of NSW going.
“This isn’t an issue with our contract … it’s about constantly having to (power down) because we can’t afford the price,” Mr Howell said.
There is also significant risk if the smelter has to stop a potline for longer than two-and-a-half hours its will freeze permanently, unable to be repaired.
The power shortfall was caused by a combination of planned and unplanned outages at the Bayswater, Vales Point and ageing Liddell coal fired power stations.
Mr Howell said the lack of dispatchable energy in the grid proved why the federal government’s proposed 660MW Kurri Kurri gas power plant was needed by 2023, when the Liddell station is due to close.
He said renewable energy sources and batteries were not capable of meeting the round the clock power needs at Tomago.
“No one disputes the energy system should transition to more cleaner sources, we are actively pursuing renewables like wind, solar and hyrdo, but the fact remains there are substantial parts of the day and night, particularly in winter, where the dispatchable generation is not there,” he said.
“To say batteries can replace Liddell is like saying a bicycle can replace a car.”
Mr Howell said the biggest battery in Australia could currently power Tomago’s three potlines for a total of 12 minutes.
Energy and Emissions Reductions Minister Angus Taylor said manufacturers such as Tomago needed reliable and affordable power to survive.
“The last week has been a minor dress rehearsal for what would happen if Liddell closed without replacement,” he said.
“Snowy Hydro’s Hunter power Project at Kurri Kurri is exactly what is needed to keep our grid affordable and reliable and ensure manufacturers like Tomago can continue to operate.”
The government has blamed private sector inaction for why it decided to spend up to $600 million building the Kurri Kurri gas plant by 2023, which combined with Energy Australia’s Tallawarra B gas generator would meet the 1000MW of new dispatchable power needed when Liddell closes.
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Originally published as Tomago aluminium smelter powers down three times in a week due to electricity shortages
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