Outages at Loy Yang A highlight vulnerability of Victoria’s power grid

Energy Users Association CEO Andrew Richards says outages at a coal-fired power station highlight the perilous state of Victoria’s grid, with the possibility of blackouts in the event of a heatwave.

The coal-fired Loy Yang power station was offline four times in fouor days last week. Picture: Asanka Ratnayake/Getty Images

A coal-fired power station tower that provides at least 5 per cent of Victoria’s electricity was offline four times in four days last week, following an eight-day outage over the new year period.

While the outages coincided with cool weather and did not ­result in a blackout, large energy users say they highlight the perilous nature of state’s power grid, which is still dependent on fossil fuels – predominantly high emissions brown coal – for more than 60 per cent of generation.

Energy Users Association chief executive Andrew Richards said the risk of blackouts has been compounded by the Allan government’s ideological opposition to using lower-emissions gas as a transition fuel, amid delays in ­renewable energy coming online.

Victoria’s renewable energy plans suffered a significant blow last week after federal Environment Minister Tanya Plibersek’s decision to veto the state government’s proposal for a renewable energy terminal at the Port of Hastings, which was to serve as a platform for the construction of the state’s offshore wind industry.

Paul McArdle, a close observer of the national electricity market, revealed the outages on his WattClarity blog, showing the unit went offline four times between last Monday and Thursday, following its eight-day outage ­between ­December 29 and January 6.

Mr McArdle said the tower is one of four at Loy Yang A – currently providing 20 to 28 per cent of Victoria’s power, despite being slated to close in 2035 – meaning the tower alone is responsible for generating 5 to 7 per cent of the state’s energy.

Mr Richards said the outages highlighted the perilous state of the grid, with the possibility of blackouts during a heatwave.

He said they were more likely to occur at night, when solar generation was unable to fill the gap.

“The last couple of summers have been pretty mild by Australian standards, and it’s allowed us to skate through, but if we have an extended period of really hot weather and hot nights, and as people are coming back to work and getting back to business, that culmination of things can create some pretty hairy situations,” Mr Richards said.

Steam rises from Loy Yang A and B coal-fired power stations near Traralgon, in the Victorian La Trobe Valley.

The chief of the body representing Australia’s largest industrial energy users said the outages showed the role gas could be playing in providing a lower-emissions transition fuel.

“If gas was playing a bigger role in Victoria, then you’d be closing down old, dirty coal-fired power stations much sooner, and that would have a net positive outcome, because gas is less emissions-intensive than brown coal,” Mr Richards said.

“That’s the ironic thing with the Victorian approach; they’re demonising gas, and that’s forcing more coal to be burnt, which is a net negative for the environment.”

Mr Richards pointed to the Australian Energy Market Operator’s draft integrated system plan, released last month, which warned that Australia will need to significantly increase its gas usage to ensure the grid remains reliable amid the transition to renewables, with 16GW of gas-powered generation capacity needed by 2050, up from the 10GW AEMO previously predicted.

“For the transition to succeed, lights must be kept on and the gas flowing while the new system is put in place,” the report said.

Mr Richards said the “rooftop revolution” of solar generation was “hurting” all large-scale generators, whether renewable or fossil fuel, by creating negative pricing in the middle of the day.

“It’s why we’re seeing some of these fossil-fuel generators becoming less reliable, because there’s less money around for them to spend on maintenance,” he said.

Victorian Energy Ministers Lily D'Ambrosio. Picture: NCA NewsWire/David Crosling

A spokeswoman for Victorian Energy Minister Lily D’Ambrosio said Victoria was transitioning to renewables because the state’s “ageing” coal-fired generators were becoming “increasingly unreliable”. “The (State Electricity Commission)’s initial $1bn investment will accelerate the build of 4.5GW of new generation and storage – the equivalent replacement ­capacity of Loy Yang A,” the spokeswoman said.

“Victoria remains a net exporter of energy in the National Electricity Market and our record investment in renewables combined with AEMO’s reserve ­capacity will ensure we have sufficient supply to meet any ­increased demand this summer.

“Historically, gas has only provided about 5 per cent of Victoria’s electricity needs and along with big batteries, will continue to play a role in energy peaking demand as we move towards 95 per cent renewable energy generation by 2035.”