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Victoria's energy security has been thrown into question, with the state facing an unprecedented 72 days of possible power supply shortfalls over the next two years following the shutdown of the Hazelwood plant next week.
Australia's electricity grid operator has warned that the looming shutdown of the ageing plant, which supplies up to a quarter of the state's power, could lead to breaches of the minimum energy reliability benchmark next summer.
Its data shows 72 days of potential power "reserve shortfall".
While the prediction does not mean Victoria is facing imminent blackouts, it does highlight the risks to the state's power supply as the Andrews government prepares for next year's election, with toxic state-federal relations and energy policy uncertainty blamed for inhibiting new investment.
The figures, from the Australian Energy Market Operator, also highlight the extent to which Victoria and South Australia will be critically reliant on imported power from NSW and to some extent Tasmania, with no guarantees it will be available.
HBS Guy wrote:And Hazelwood is not the only aging plant to shut down over the next few years. Vic might have to follow SA and grab what is left of Bass Strait gas. This is the result of abbott reducing the RET and of the privatisation idiocy.
HBS Guy wrote:Plenty more Vic brown coal generators to close. I doubt there are any plans for replacements.
http://www.abc.net.au/news/2017-03-24/hazelwood-latrobe-valley-not-the-first-or-the-last-to-close/8380760
Ironically, in the short-term, Yallourn W should be hugely profitable. Since Engie announced Hazelwood's closure last November power prices have almost trebled.
Even though the lights will stay on — the market regulator says there is enough power in the system to guarantee energy security — the energy market has tightened considerably. So much so that the futures price for wholesale power has increased from $54 per megawatt hour in December to more than $140 per megawatt hour now.
Some of the findings counter a push from Coalition MPs for a mammoth investment in a new coal-fired power station in Queensland, using more efficient “ultra supercritical” technology being rolled out in Asia.
A new coal-power station would take seven to eight years to build and could face fierce competition from wind and solar by the time it starts generating, given the steady fall in the cost of producing renewable energy. The expansion of an existing coal-fired power station is seen as a more viable option to add baseload power as quickly as possible.
Liberal National Party MP David Littleproud is calling for the expansion of the Kogan Creek power station in his Queensland electorate of Maranoa, a supercritical generator that is linked to a nearby coal mine and could be ramped up from its existing capacity of 700 megawatt hours.
The government is also alive to the potential of new solar farms, given advice that a new facility with a capacity of 800 megawatt hours could be rolled out in less than a year. The latest solar photovoltaic panels can produce 50 per cent more electricity at the same cost as earlier technology, while being combined with battery storage to guarantee reliability.
The government believes the Snowy Hydro scheme expansion can increase its capacity by 50 per cent to 3500 megawatt hours or more, turning a huge amount of solar or other renewable power into baseload electricity to be switched on as needed. While this could take up to six years, the project would add capacity quicker than a new coal-power station.
Mr Frydenberg said the report would show that there would have to be “sufficient dispatchability” in the network and that coal was a way to achieve this. “The cheapest form of existing power generation comes from existing coal,” he told Sky News. “It’s also a stable, reliable form of dispatchable power. So if we can keep our coal-fired power stations going for longer then that can provide a good outcome for Australian consumers. We recognise that we need coal in our system and we will ensure that that continues to be the case.”
The latest Newspoll survey highlights the community divide on energy, with 45 per cent of voters expecting an increase in their bills from the shift to renewables while 22 per cent anticipate a decrease and 24 per cent expect no change. In a warning sign to the government, 60 per cent of Coalition voters believe renewables will increase their bills. Only 31 per cent of Labor voters and 31 per cent of Greens voters believe the same. Voters also appear to be turning against the idea of paying higher bills to use renewable power, with 49 per cent saying they would pay “nothing” extra — up from 45 per cent in February and 44 per cent last October.
While 25 per cent said they were willing to pay $100 a year more for renewable power, this was down from 26 per cent in February and 28 per cent last October. Opinions are divided along party lines, with 59 per cent of Coalition voters refusing to pay more for renewable power compared with 38 per cent of Labor voters and 25 per cent of Greens voters.
AGL chief executive Andy Vesey has issued a stinging rebuke to Malcolm Turnbull and Tony Abbott over the future of one of Australia’s oldest coal-fired power stations.
During Question Time on Thursday, Mr Turnbull revealed that in response to warnings that the energy market was facing imminent shortfalls, the government was “already” in talks with AGL to keep the Liddell coal-fired power station operating until at least 2027.
Former PM Tony Abbott also welcomed the news, tweeting that it was “good that AGL is no longer getting out of coal”.
But minutes later, Mr Vesey took to Twitter to respond, telling Mr Abbott: “We’re getting out of coal. We committed to the closure of the Liddell power station in 2022, the end of its operating life.”
“Keeping old coal plants open won’t deliver the reliable, affordable energy our customers need.”
As soon as that report landed, the prime minister confirmed the government was in talks with AGL over the future of the Liddell power plant. Malcolm Turnbull said he wanted the power plant to remain open for another five years.
Unfortunately for the prime minister, the chief executive of AGL, Andy Vesey, went public with a different version of events.
Given Vesey wasn’t exactly on message, Turnbull then went out a bit later in the evening to tell reporters what the AGL boss was (apparently) saying in private. The prime minister told reporters AGL was happy to sell Liddell, and that’s what the discussion was actually about: someone buying Liddell and keeping it operating for five years after 2022.
Turnbull told reporters on Wednesday night it was better if a private sector operator bought the ageing plant, but he also didn’t rule out the government buying the plant if push came to shove. (Yipee, say taxpayers everywhere).
The government will meet with Vesey next Monday to thrash all this out
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