States facing summer of blackouts as coal generator goes offline
Victoria’s power grid faces fresh volatility with a major coal unit knocked out in the LaTrobe Valley.
Victoria’s power grid faces fresh volatility, with a major coal unit knocked out in the Latrobe Valley for seven months, raising concern over supply during peak demand periods next summer.
The failure of a generator at AGL Energy’s Loy Yang A coal plant underlines the need for the state to deliver on an ambitious renewable energy push to cut its reliance on fossil fuels, the Victorian government said.
However, experts warn the grid may now be stretched to breaking point. The outage will curtail one of four units at the state’s largest coal generator, which supplies 30 per cent of Victoria’s power needs, raising the potential for a repeat of January’s rolling outages.
“The extended outage of the Loy Yang unit is a significant concern, particularly if that outage were to extend into summer 2019-20, which seems possible,” Global-ROAM power market consultant Paul McArdle told The Australian.
“In January, we saw what can happen in an electricity grid that experiences extreme temperatures simultaneous with outages of a few key dispatchable plants and relatively low yield from intermittent resources.”
The supply cut may put pressure on prices and will require the electricity grid operator to work closely with the nation’s largest generators to ensure sufficient supplies are available, energy expert Tony Wood said.
“Obviously losing more than 500 megawatts for most of the summer is bad news,” said Mr Wood, the Grattan Institute’s energy program director. “The Australian Energy Market Operator will be working even more closely with the generators to minimise any other outage risks.”
AEMO said it would liaise with AGL to monitor the outage but that it expected no immediate impact on supply levels.
AGL revealed on Friday that one of the units at its 2210MW Loy Yang A power station was expected to be offline for seven months after significant damage to a generator. The loss of the 550MW unit will cut up to $100 million from AGL’s underlying profits in the 2020 financial year.
It also ratchets up risks for the already stretched power grid during high demand, highlighted in late January when Victoria had rolling outages during a heatwave.
The lost output from three ageing coal plants, including Loy Yang A, and a major gas generator during one of the tightest supply-demand periods of the summer underlined the fragility of the grid, despite vast volumes of renewables boosting output over the past few years.
The Victorian government said this weekend’s Loy Yang coal breakdown reinforced its need to push ahead with a 50 per cent renewable energy target by 2030. It expected nearly 2000MW of new renewables supply to be available in Victoria before summer.
“The announcement from AGL that a Loy Yang coal generation unit will be out until December highlights why our transition to cleaner, more reliable renewable energy is so important,” a government spokesman said.
“We will be working closely with AGL and AEMO over the coming months to understand the implications this will have on the energy grid and how we can mitigate any supply issues.’’
Federal Energy Minister Angus Taylor said the cut to supply underlined the need for the Coalition’s newly formed retailer reliability obligation to ensure enough generation existed to meet power users’ needs from July 1.
“Obviously we are concerned by any loss of generation in the National Electricity Market,” he said. “This is precisely why we have established the retailer reliability obligation, which ensures energy companies must guarantee supply years ahead of time.’’