Fossil fuel plant outages pose main threat to summer power supply as renewables bolster grid

·4 min read
<span>Photograph: Bloomberg/Getty Images</span>
Photograph: Bloomberg/Getty Images

Australian Energy Market Operator says risks of insufficient supply during summer peak load periods remain despite La Niña bringing cooler temperatures

The addition of almost 5 gigawatts of renewable energy capacity will improve the resilience of Australia’s main electricity grid this summer, with outages from fossil fuel plants the main threat to supplies, the Australian Energy Market Operator says.

In its 2021-22 Summer Readiness Plan, released on Friday, AEMO said the advent of a La Niña in the Pacific reduced the risk of high temperatures. Still, “extreme hot days during summer, particularly if coupled with high humidity, create the highest stress on the electricity grid”, it said.

Australia has entered summer after its coolest spring since 2016, the Bureau of Meteorology said on Wednesday. The bureau’s outlook for the next three months is for relatively wet conditions in the eastern half of the country, with below-average daytime temperatures predicted for much of NSW.

Risks remain of insufficient supply during summer peak load periods, although these have been eased by an increase in renewable power supplies.

Related: Australia’s biggest privately funded battery under construction at Hazelwood power station site

Households have added 2.6GW of new solar panel capacity in the past year even with the Covid disruptions, while wind and solar farms have added another 2.2GW in the past year.

“Continued rapid development of new large-scale and distributed renewable resources has helped improve the reliability outlook for summer 2021-22, however, very high demand concurrent with low variable renewable energy generation may present a risk of insufficient supply meeting demand,” Aemo said.

Existing fossil fuel plants, though, are not without their own challenges. The explosion that knocked out Callide C power station’s unit 4 in Queensland and the unavailability of Mintaro power station in South Australia contributed to about 700MW less coal- and gas-fired capacity going into this summer versus a year ago.

The 1.48GW Yallourn power station in Victoria also remains vulnerable if high rainfall causes the Morwell River to flood, although the probability of such an event is rated as low, Aemo said.

“Should such an event occur, Aemo forecasts a risk of between 150,000 and 500,000 customers in Victoria being without power for up to eight hours during an extreme heat event – equal to a one-in-10-year peak demand event – at least once this summer,” it said.

Also shoring up supply will be an emergency capacity – dubbed the reliability and emergency reserve trader – of more than 2GW that Aemo is arranging. Last summer, that capacity was called on only once in New South Wales to mitigate the risk of load shedding or blackouts.

Separately, Aemo may be facing some supply constraints of its own, with employees voting on Thursday to strike for the first time over what they said was management’s failure to address employment issues including extending the enterprise agreement to cover more graduate and early-career staff.

Staff plan to engage in work stoppages, refuse to work overtime or oncall, and take all allocated meal breaks during what is typically the “highest-pressure period” for the energy operator.

“This isn’t simply an issue about wages or pay rises,” said the Professionals Australia chief executive, Jill McCabe. “It’s fundamentally about ensuring Aemo employees are not worse off under the new enterprise agreement.”

Guardian Australia sought comment from Aemo about the potential strike.

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Operators of large-scale grid storage, including batteries, have their own complaints following Thursday’s release of the Australian Energy Market Commission’s new rule for network access.

As reported earlier this week, most industry participants were worried the new regulation could hamper the take-up of new batteries and other forms of storage.

“For large batteries the rule will cut red tape, reduce costs and logistical hurdles to participate in the market,” said the AEMC chair, Anna Collyer. “Batteries will no longer need to register twice, to both draw energy from the grid and send it out, as they currently do.”

However, industry lobby group, the Clean Energy Council, said the new rule would result in consumers paying twice for network charges – first through higher electricity prices and again through standard network charges.

“While the AEMC has made several positive changes for storage, the renewable energy industry is disappointed that it has rejected the Australian Energy Market Operator’s proposal to exempt pumped hydro and batteries from paying network charges,” said the council’s director of energy transformation, Christiaan Zuur.

“Batteries and pumped hydro will now be placed at a commercial disadvantage to coal and gas generators, who do not face network charges,” Zuur said. “This undermines the efforts of state and territory governments to decarbonise the power system.”

The electricity sector accounts for about one-third of Australia’s greenhouse gas emissions. Government data released on Tuesday showed those emissions have lately been on the rise, including in the power industry.

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