December 3, 2019 / 1:18 PM / in 3 months

Australian power market operator braces for hot, dry summer

MELBOURNE (Reuters) - Australia’s power market operator said on Wednesday it has lined up extra power reserves to help keep the lights on during what is expected to be a hot, dry summer that could stress the country’s ageing coal-fired plants.

FILE PHOTO: The Liddell coal-fired power station is pictured in the Hunter Valley, north of Sydney, Australia, April 9, 2017. REUTERS/Jason Reed

The Australian Bureau of Meteorology warned last week that the summer, which runs from December through February, is likely to be hotter and drier than normal, increasing the chances of heat waves and bushfires.

“These risks add to the deteriorating reliability of some of the older coal generation plants,” Australian Energy Market Operator (AEMO) Chief Executive Audrey Zibelman said in a statement.

Coal-fired plants provide the bulk of Australia’s energy but along with natural gas fired-plants are crucial to back up growing supplies of wind and solar power, especially in the evenings.

To prepare for potential power plant outages at a time when power demand is expected to soar for airconditioning, the market operator has secured 125 megawatts (MW) of reserves, including off-market generation and demand management agreements, where industrial customers are paid to cut energy use at peak times.

It has also has lined up agreements with some big power users to cut their energy use by more than 1,500 MW in “high-risk” situations such as extreme or extended heatwaves, bushfires or unplanned plant outages.

Over the past two summers, the states of South Australia, Victoria and New South Wales have all been hit with blackouts.

The AEMO said it paid industrial users A$34.5 million ($23.4 million) for its emergency reserves program last summer, all for power that was called on over two days in January.

The market operator is counting on 750 MW of supply that has been out of service over the past six months - the Mortlake gas plant run by Origin Energy and a unit at the Loy Yang coal-fired plant run by AGL Energy - to be back up by the end of December.

It warned in August that if these units were not back up during the peak summer period, up to 1.3 million households could go without power for four hours in an extreme heatwave.

Reporting by Sonali Paul; editing by Richard Pullin

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