AGL Energy generation crisis deepens amid Bayswater outage
Two more units at the Hunter Valley coal plant, which supplies power to 2 million households, are now out of action.
Australia’s energy crisis has deepened after AGL Energy lost half its capacity at the giant Bayswater coal plant, the second largest power station in the national electricity market, while a breakdown at its Victorian Loy Yang A facility could take an extra two months to fix.
Wholesale prices have surged in the power grid with up to a third of coal generation – which normally provides 60 per cent of supply – currently out of service due to a combination of mechanical faults, extended maintenance and supply issues.
AGL confirmed that two more units at its 2640 megawatt Bayswater coal plant in NSW’s Hunter Valley are now out of action. With a third unit also out for extended maintenance, the power station that supplies electricity for 2 million Australian households is now operating at just a quarter of its capacity.
“We took Bayswater Unit 2 out of service on Wednesday to repair a tube leak and it is expected to be out for up to 10 days,” an AGL spokesman said on Friday. “Yesterday, a maintenance issue on the Bayswater Unit 4 boiler ash conveyor required the unit to be taken out of service for a few days.”
Hopes that a major coal generation unit at its Loy Yang A plant would be back in service by the start of August have also been dashed with AGL stating on Friday it could take an extra two months to be fixed with a new scheduled return date of the second half of September. It also announced Christine Corbett, the company’s chief customer officer, would leave the company.
Widespread outages at other coal-fired generators has led to increased reliance on gas generation, spiking gas prices and piling on costs for exposed consumers. The Australian revealed a week ago a major coal-fired unit at AGL’s Liddell Power Station had also failed, compounding the crisis in the national electricity market.
Wholesale electricity spot prices in Victoria averaged $367 per megawatt hour last week, five times the average for the first quarter, with NSW and Queensland at $475 MWh and $447MWh respectively.
A third of coal units are unavailable in NSW, 27 per cent are out in Queensland and 23 per cent shut in Victoria, according to consultancy WattClarity.
The latest setback was blamed on global supply chain issues and the availability of specialised materials. It means the coal unit may now be offline for more than five months with AGL to provide an update in September on the hit to its 2023 financial year earnings.
“As a consequence of the ongoing market volatility and the fact that the review of AGL’s strategic direction will not be completed until September, AGL does not anticipate issuing FY23 earnings guidance before the review has been completed,” AGL said in a statement.
The last breakdown at Loy Yang A cost AGL $100m, which was ultimately recovered from insurance.
However, the company no longer has that cover and the outage has come at a time of spiralling power prices, equity analysts have previously noted.
It previously forecast an earnings hit of $70m or $20m-$30m per month, spread over both the final two months of the financial year and the start of the 2023 earnings period.
AGL has suffered a tough few months with billionaire Mike Cannon-Brookes defeating its planned demerger which resulted in half the company’s board departing and the decision to launch a new strategic review to plot a path for growth.
Christine Corbett, AGL‘s chief customer officer, said she would leave the company. Ms Corbett was CEO-elect of AGL Australia, the green retailer that was to be split out of the power giant but has now decided to depart.
“I am very proud of the work my team and I have done over the past 12 months on the AGL Australia strategy which will be an important input into AGL’s review of its strategic direction,” Ms Corbett said, who will step down from her role on June 24 and remain employed until September 25.
AGL has appointed Jo Egan, the current general manager for product and portfolio, as its new chief customer officer from June 25.
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