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Basslink outage adds to strain on Victorian supply

A failure of the Basslink power cable that links Tasmania to the mainland power grid is likely to last until mid-October, increasing pressure on security of electricity supply in Victoria in the run-up to summer just as two major generating units are also out of action.

The Australian Energy Market Operator said it was “monitoring the situation closely” after the Basslink venture said the 500-megawatt cable suffered a trip on Saturday morning and needs to be repaired.

The outage of the cable adds to the shutdowns for repairs of a coal generator and a gas generator that have already reduced supply for the Victorian market.

“At present, the outage does not pose any immediate threat to the supply-demand balance. However, we continue to monitor the situation closely,” an AEMO spokesman said.

“As outlined recently in our Electricity Statement of Opportunities, it is critical we have all current resources available to meet anticipated summer peak demand.”

The Basslink venture said it had advised AEMO that the interconnector will be offline until mid-October. The line enhances security of supply on both sides of the Bass Strait, protecting Tasmania against drought-induced energy shortages while surplus power can be exported to Victoria and the southern states when necessary.

The coal power generation unit owned by AGL at the Loy Yang A site in Victoria and Origin Energy’s unit at its Mortlake gas plant are due to be repaired by mid-December.

Last week, AEMO warned of potential power cuts in Victoria during peak summer demand if the coal and gas units aren’t repaired on time.

Basslink, owned by Singapore-listed Keppel Infrastructure Trust, includes a 290-kilometre underwater cable that connects the 500-kilovolt transmission system in Victoria to Tasmania’s 220kW grid. The fault is in an above-ground part of a low-voltage cable in a plant in Gifford, Victoria.

The cable has been operating since 2006, with a telecoms service then coming online in mid-2009.

Basslink said that “at this point in time”, the outage affects only electricity, with the telecoms cable that provides broadband and internet service continuing to operate.

Basslink suffered a failure also in late 2015, which caused the venture to miss its minimum debt service covenant and caused friction with its key counter-party Hydro Tasmania.

Meanwhile, the Australian Energy Regulator has taken legal action against France-based Engie over blackouts forced by the market operator during a heatwave in February 2017.

The AER alleges that Engie didn’t keep AEMO informed of the capability of starting up its Pelican Point gas generator near Adelaide within 24 hours’ notice. That led to the market operator cutting off customers to keep the grid stable during extreme heat on February 8, 2017.

“The AER alleges that Pelican Point did not disclose to AEMO that one of the generators at its Pelican Point Power Station was capable of being made available on 24 hours’ notice,” chair Paula Conboy said.

Ms Conboy said the situation meant that until late that afternoon AEMO was unaware it could have directed Pelican Point to make the capacity available.

Engie rejected the allegations and said it will defend the claims, with a spokesman declining to comment further given the legal proceedings.

The move follows similar legal action taken by the AER early this month against wind farm owners over actions that contributed to South Australia’s state-wide blackout in September 2016.

Source: Financial Review