February 1, 2019

On the last Friday of January Victorian families and businesses were let down by the energy system, including by us, EnergyAustralia.

We’re sorry.

Around 200,000 customers lost power right when they needed it most, during an extreme heatwave.

The state’s system, still stretched from the closure of the Hazelwood power station in 2017, could not cope with the demand for electricity, and the lights went out.

Even before power was restored, another round of the blame game had started.

The 2500-people who come to work every day at EnergyAustralia do so because they know energy is essential to quality of life – energy matters.

We aim to have all our generation assets online on the highest demand days. We’re disappointed we couldn’t deliver that.

As we headed into the Australia Day weekend, two out of four units at the Yallourn power station in the Latrobe Valley, representing around 800 megawatts (MW) of capacity, were out of service.

On the Wednesday before the very hot Thursday, one of those units had suffered a tube leak. 

Power stations like Yallourn burn coal to make high-temperature and high-pressure steam that drives a turbine to make electricity.  Under that kind of stress, the pipes or tubes that carry the steam inevitably wear and are repaired.

Rather than take it offline, our team nursed the 35-year-old unit through Thursday as the mercury topped 40 degrees.

The leak worsened and around midnight we made the difficult decision to take the unit offline for repairs, rather than risk more damage.

We were very proud of our people who worked through extreme temperatures to help make sure no homes lost power on Thursday.

Unfortunately, Friday was different.

A second Yallourn unit was already offline for maintenance. Many people have questioned how it was that such a critical piece of the state’s energy infrastructure was not available when it was needed most.

This is an explanation, not an excuse.

The maintenance we did was long overdue. It had been postponed twice already, including once to meet demand during heatwaves in Victoria and New South Wales earlier in January.

By the time the unit was taken offline, it had been in action for 4,200 hours, or the equivalent of 175 days of round-the-clock operation; to keep running safely and efficiently, units require maintenance every 3,500 hours.

When the decision to reschedule the maintenance was taken, the extreme heatwave on Thursday and Friday was not in the forecast.  Had it been, we – in consultation with the market operator AEMO – would have delayed the outage again.

When a unit is taken offline, it can take days to return to service. That means once the maintenance was started, the unit couldn’t be brought back in time.

But none of that helps customers.

People are frustrated. It’s hard to argue that when the lights go out and prices rise the energy system is working in the best interests of customers.

People are wondering how an energy system once so reliable and affordable, one based on abundant natural resources, could degrade to the point when an entire state goes black (South Australia in 2016) and others have rolling blackouts.

When Hazelwood closed, the state’s energy system lost name-plate capacity of around 1600 MW; the capacity of the Victorian units out of service during the recent heatwave (at Yallourn and AGL’s Loy Yang plant) was around 1300 to 1500 MW.

More than two years ago the head of our Energy business was asked at a Senate inquiry about the system’s capacity to cope with peak summer demand.

He likened Victoria’s electricity system to a car with four tyres and a spare in the boot. When Hazelwood shut we lost the spare.

And unfortunately, every so often, we have to stop on the side of the road to fix the car when it breaks.

Over the next two decades the rough equivalent of eight-to-ten Hazelwood power stations is expected to close as old coal plants, including Yallourn, are decommissioned.

You might say there’s precious little slack in the system, especially on very hot days.

We can see the problem and we are putting together the pieces that will help solve this puzzle. 

This summer EnergyAustralia has two large scale battery projects helping stabilise the grid at Kerang and Ballarat.  We have more than 50 MW of demand response available to the market to help balance the grid when required.

We are completing the engineering and development for new generation and expansion projects, including flexible gas-fired plants and pumped hydro.

Our exam question for the next decade is not which energy ideology is best – it’s getting all forms of generation to work seamlessly.

It won’t be easy, but we think the energy problems we face can be fixed. The hot weather reinforces that we need to move ahead and improve our energy system.

Every day counts. In the meantime, we still have more of that hot weather ahead of us.

All our people, particularly the ones doing the hot and hard work at our power plants, will be doing their best to keep the lights on.

By Catherine Tanna, EnergyAustralia Managing Director