Energy plan failure risks ‘catastrophe’
There could be ‘catastrophic’ power outages at smelters unless a coherent national energy plan is developed before summer.
There could be “catastrophic” power outages at smelters unless a coherent national energy plan is developed before summer, the aluminium industry has warned.
Australian Aluminium Council executive director Marghanita Johnson said the industry of 17,000 workers could not afford another year of policy uncertainty, declaring the electricity grid needed more baseline power to balance intermittent renewables.
Ahead of a meeting between state and federal energy ministers on Friday, Ms Johnson said renewables and battery storage could not power heavy industry if coal-fired power stations closed.
“For the grid as a whole, it is not a one or two-year problem in terms of the transition, but we definitely have some challenges we need to face ahead of next summer in terms of stability in the grid. If there is a catastrophic outage, we will see a catastrophic outcome,” she said.
“The whole electricity sector had a challenging summer and aluminium obviously is at the frontline.
“We are interested in timely reforms that will help ensure that as we go into the next summer, we don’t face the same sort of challenges.”
The federal government is investigating extending the life of the Liddell coal-fired power station in the NSW Hunter Valley three years beyond its closure date in 2023.
There is a concern in government ranks that the closure of the power station, which powers the Tomago smelter, will cause a shortfall of baseline energy and should be delayed until Snowy Hydro 2.0 is fully operational.
Ms Johnson said she would be concerned about the closure of “any major generator” until there were replacement power sources.
“Most things in the current pipeline are a couple of years away,” she said. “So new interconnectors are a couple of years away. Snowy 2.0 is probably a bit more like three to five years away. We need to be really careful. You can’t replace something that has firming capacity with intermittent generation.”
Alcoa’s aluminium smelter in the Victorian town of Portland suffered two major outages over summer, while the Tomago smelter was forced to reduce output because of concerns about power shortages.
Rio Tinto chief executive Jean-Sebastien Jacques said the company was reviewing the future of its smelter operations because of high energy prices and instability in the grid.
Rio controls the Bells Bay smelter in Tasmania and the Boyne smelter in Gladstone and is the major shareholder of Tomago.
The Council of Australian Governments meeting between Energy Minister Angus Taylor and his state counterparts will be conducted via teleconference and discuss how the market needs to respond to the coronavirus crisis.
Ministers will also discuss how to increase reliability into the system, with Energy Security Board chair Kerry Schott to provide an update on the design for a new market framework to commence after 2025.
Ms Johnson said a transition to a low-emissions economy that rushed renewables into the system risked causing power failures to smelters, which could drive them out of business.
She called for the construction of new gas-fired power stations and the better use of existing coal plants.
“At the moment, the batteries aren’t big enough and won’t be big enough,” she said.