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Coal unit failure a threat to Victorian energy security this summer

Victorians face the risk of another summer without enough power to pull through the hottest days, as a fault at the state’s biggest coal-fired power plant is expected to drag on into December.

The head of Australia’s energy market operator said threats to the reliability of the electricity grid in Victoria were its main concern following AGL’s announcement that one of four generating units at the Loy Yang A power station will be out of action for seven months.

Failures and planned outages at multiple coal and gas-fired units in the Latrobe Valley played havoc with Victoria’s energy grid last summer, forcing the energy market operator to cut the power to hundreds of thousands of customers during two days of extreme heat in late January.

AEMO chief executive Audrey Zibelman said the operator was working with AGL and the rest of the industry on plans to cover the loss of generating power at Loy Yang A, which provides about 30 per cent of Victoria’s electricity capacity.

The damaged unit provides about 550 megawatts of power.

“Victoria has been our primary issue right now, to see the implications of that [outage] and to make plans accordingly,” Ms Zibelman said.

The operator is in the early stages of preparing for summer, when demand for electricity typically peaks, and must juggle the demands of energy users with the needs of power station operators to periodically take units offline for maintenance.

Ms Zibelman said unplanned outages such as the one at Loy Yang A made this task more difficult.

“So everything between the generation outages and transmission outages just requires us to be very thoughtful about how we approach this, just to make sure we are secure going into the summer,” Ms Zibelman said.

Ms Zibelman was speaking at Australian Energy Week, an industry event.

The operator has had to take emergency measures to keep the lights on in Victoria during the past two summers, but was still forced to resort to load shedding last summer after exhausting its reserves.

Victoria’s Energy Minister, Lily D’Ambrosio said AGL’s announcement that a unit will be out for repairs until December highlighted the importance of the government’s transition to renewable energy.

The government would work with AGL and the market operator over the coming months to understand the implications for energy supply, Ms D’Ambrosio said.

“We’ll continue to work with industry to drive investment in new renewable energy generation, help secure additional reserve capacity within our energy grid and improve reliability of supply,” she said.

Victoria and South Australia experienced days of near record heat in January, while multiple generator outages at coal-fired power stations in the Latrobe Valley stripped about 1600 megawatts of capacity from the grid.

The operator’s attempts to manage the strain by paying some major industrial energy users to power down proved inadequate, forcing it to use load shedding to avoid a state-wide meltdown.

More than 200,000 consumers were blacked out for about two hours.

The energy shortfalls also came at a significant cost to the public, as industrial businesses such as Alcoa and Australian Paper were compensated for powering down.

The cost to consumers of AEMO’s contractual deals with major energy users to power down was $52 million, it said in a report.

The report said without the mechanism, the number of consumers affected by load shedding would have been more than double.

Source: The Age