Precarious power grid faces serious risks, warns Energy Minister Angus Taylor
Power grid’s precarious position this summer could potentially lead to ‘contagion’ with other states.
Victoria’s gas ban and high renewable energy targets have placed its power grid in a precarious position this summer, potentially leading to “contagion” with other states, Energy Minister Angus Taylor has warned.
After Federal Labor’s resources spokesman Joel Fitzgibbon urged the Andrews Labor government to immediately lift its moratorium on conventional gas exploration saying the policy makes “neither economic nor environmental sense”, Mr Taylor also urged the southern state to reconsider its policy stance.
“We’ve got a situation where a major baseload generator has been taken out of the market in Hazelwood. We’ve got a ban on gas and we’ve got a very aggressive renewable energy target,” Mr Taylor said. “So that’s a precarious grid that faces serious risks, both this summer and incoming summers.”
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However, the Victorian government hit back, saying it was ready to work with the federal government “whenever they are interested in being constructive” on the issue of power supply.
“We know that privately owned ageing coal fired power stations are unreliable and continue to fail and that’s why our investment in renewables is so important,” a Victorian government spokesperson said.
“Our priority is getting started on projects which will help connect more energy to the grid and drive down power prices for all Victorians. If Angus Taylor shares that priority he needs work with us and get on with making the investments needed to deliver better outcomes for Victorians.”
Outages at AGL Energy’s Loy Yang A coal plant and Origin Energy’s Mortlake gas generator have led to concerns Victoria faces a significant risk of power outages this summer.
While both companies expect to have their units back online by mid-December, the Australian Energy Market Operator has warned any slippage from that timeline will boost the risk of blackouts this summer on hot days.
Adding to tensions are longer-term concerns the state’s 50 per cent renewable target by 2030 may force out major coal generators like Yallourn in the Latrobe Valley which supplies 22 per cent of Victoria’s electricity and 8 per cent of the national market.
“I think that the trouble for the rest of the states is this can be contagious when you’ve got one state that has problems,” Mr Taylor said after the opening of AGL’s Barker Inlet gas station in South Australia.
Reversing the ban on Victoria’s gas should be considered to ease constraints in the grid.
“The answer is more supply that is dispatchable, that’s reliable and that’s affordable,” Mr Taylor said. “It’s always the answer in any market when you’re in a precarious situation. We want to see that in Victoria. And look, central to that has to be raising the ban on all gas, conventional and unconventional.”
Tight summer during peak power demand
South Australia also forecasts another tight summer during peak power demand periods but said it was confident there would not be any compulsory load shedding with supplies from facilities like Barker Inlet easing constraints.
“The advice given to me is that while every summer is tight, we should be okay this summer,” South Australian energy minister Dan van Holst Pellekaan said on Monday. “Every summer is tight, and will remain so for a few years to come until all of our energy policies are put into place and up and running, and we’re working on that as quickly as we possibly can.”
AGL chief executive Brett Redman said he expects Victoria will have ample supplies this summer.
“The Victorian market — let me say first and foremost that we’re confident that our unit at Loy Yang will be back up and running as scheduled on December 16,” Mr Redman said. “That plus the Origin unit that they’re also working on. If that’s back in the market Victoria will have the supply that it needs. I believe therefore that Victoria will be well supplied over summer.”
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