Pressure forces national energy market operator to buy extra generating capacity
Victoria’s grid comes under severe stress from the loss of two critical coal-fired generating units and soaring temperatures.
The national energy market operator was forced into the market to buy extra generating capacity on Monday to avert blackouts, as Victoria’s grid came under severe stress from the loss of two critical coal-fired generating units, soaring temperatures and the failure of an interstate power line.
While the Australian Energy Market Operator did not order rolling blackouts, as it was forced to do in January 2019, it entered the market as energy prices briefly hit the $14,700 per megawatt hour limit at 4.05pm (AEDT), asking for additional generating capacity and for major users to dial-down their operations to keep the Victorian grid running.
Units at Loy Yang A, owned by AGL Energy, and Alinta’s Loy Yang B were both offline on Monday afternoon, and a major interconnecting power line in New South Wales failed amid bushfires.
A softening contribution from solar and wind generators at around the same time forced AEMO to take the rare step of intervening in the market.
At 4.16pm (AEDT) AEMO told market participants it was looking to buy additional power and was asking major users to lower their usage to keep power flowing to Victorian households.
AGL Energy took a troubled generation unit at its Loy Yang A power station in Victoria offline on Friday, only a week after returning it to service.
The coal unit, one of four at Victoria’s biggest power generator, had been offline since a major failure in May and was only returned to service a week ago.
But it is understood AGL made the call to pull the generator offline as it was being ramped up to full 550MW capacity, with the unit likely to be offline for another week.
Alinta took one of two generating units at Loy Yang B offline on Sunday after a boiler leak, exacerbating the problem, which came close to crisis point at 3.45pm (AEDT) on Monday when a 330kV power line went down in NSW, stripping Victoria of the ability to call on interstate power.
A spokesman for Alinta said the unit is likely to be back up and running by the end of the week.
The intervention surprise energy market watchers, despite high temperatures and an AEMO warning to Latrobe Valley operators on Monday morning that high temperatures may put some generators at risk, as the holiday period generally sees major power users operate a reduced rates, lightening the load on the grid.
WattClarity energy analyst Paul McArdle said the sequence of events was unusual, but had put significant pressure on Victoria’s power system, forcing direct intervention by AEMO.
Mr McArdle said it appeared that one of Victoria’s major power users had responded to AEMO’s call shortly after it was made, alleviating the worst of the pressure.
Monday’s scare echoes December warnings from AEMO that if a delay in the return of AGL’s Loy Yang unit was paired with the failure of another generator Victoria would again face the risk of blackouts.
Last summer breakdowns at Loy Yang and Yallourn sent wholesale prices to the maximum level of more than $14,000/MWh, and forced AEMO to impose “load shedding” arrangements, ordering rolling blackouts on up to 200,000 customers on January 25.
Since last year AEMO says it has more than 1500MW of emergency back-up power on offer, along with 125MW of reserves through off-market generation. It has also advanced plans to pay heavy industrial users to reduce power usage during peak periods.
All of that comes at a cost, however, and AEMO estimates it will pay about $44m to have that standby power available to keep Victoria’s lights, fridges and airconditioning units on through summer.
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