Energy prices soar as Liddell Power Station closes
Coalition analysis has found NSW wholesale electricity prices surged by 80 per cent in the first five days since the shutdown of the Liddell power plant.
Coalition analysis has found NSW wholesale electricity prices surged by 80 per cent in the first five days since the shutdown of the Liddell power plant, as energy experts warn of record high prices and reliability problems in the grid.
The average NSW wholesale electricity price in the week prior to the Liddell shutdown sat at $96.40 but spiked to $172.89 in the following week, hitting a peak of $228.86 on May 1 according to figures from the Australian Energy Market Operator.
AEMO issued at least 11 notices of a predicted lack of reserve generation capacity in the days after Liddell’s closure, sparking warnings from opposition climate change spokesman Ted O’Brien that Labor was “sleepwalking towards an energy crisis”.
Energy expert Josh Stabler said Liddell’s exit, aligned with unusually high overnight pricing events and warned supply risks were starting to be exposed with reliability a concern for the upcoming winter. “Futures price for most regions remain very robust,” Mr Stabler said. “With the exemption of winter 2022 conditions, these would be considered record high prices.”
The new figures come after former Snowy Hydro chief executive Paul Broad branded Labor’s target to reach 80 per cent renewables by 2030 as “bulls..t” after the project was hit with a fresh two-year delay.
Mr Broad accused Climate Change and Energy Minister Chris Bowen of misleading Australians about the difficulties of the nation’s transition to renewables, and hit out at Labor’s pledge to cut power bills by $275 as a lie.
Snowy Hydro chief executive Dennis Barnes on Wednesday revealed that first power from the mega pumped-hydro project was now expected between June and December 2029 at the latest, prompting fears of supply shortfalls, price surges and blackouts.
Mr Broad – who quit last year after falling out with Mr Bowen over the NSW Kurri Kurri gas plant – warned Australia’s energy market was on a “knife’s edge” after the closure of Liddell and that the nation should expect blackouts during extreme weather, and urged the state government to extend the life of the Eraring coal-fired power station past 2025.
“Eraring can’t close … even now we’re closing Liddell we’re on a knife’s edge, you watch when it gets really hot or really cold, if the lights don’t go out I’d be … surprised,” Mr Broad told 2GB.
“The truth is with this transition if it ever occurs it will take 80 years not eight … there’s massive changes that need to occur and I’m deeply concerned about the rush, the notion that somehow this is all magic, we’re going to wave a magic wand, we’ll close a peak baseload power plant that’s kept the lights on through yours and my life and the minister can float all these alternatives.”
Jim Chalmers hosed down Mr Broad’s claim Labor’s 80 per cent renewable energy target by 2030 was unachievable, foreshadowing major investment in clean energy in next week’s budget.
The Treasurer said clean and cheaper energy were at the “very core” of the government’s plans to grow the economy and that he remained confident Labor could get more renewables into the national energy market. Mr O’Brien said Labor had broken its election promise to cut bills by $275 and was “only paving the way for further runaway prices”.
Grattan Institute energy director Tony Wood said Australia remained far behind its target of 82 per cent renewables by 2030 but that it was not too late to turn it around and warned reliability in the grid was now a “live issue” as a result of delays to Snowy 2.0.
Mr Wood said delays in the construction of crucial transmission including VNI West and HumeLink could create further reliability problems.
Australian Industry Group climate change and energy director Tennant Reed said economic approvals for transmission projects must be accelerated to ensure power can meet future demand.
