Energy crisis: time to invest in emergency power

ROBERT GOTTLIEBSEN
March 27, 2017
The Australian
All businesses and households in Victoria, NSW and South Australia need to seriously consider investing substantial sums in diesel generators, batteries or other sources of emergency power. Banks need to be ready to fund the massive investment required during the next nine months.
It is now absolutely clear that each of the state governments have not invested in sufficient emergency power to back their wind and solar installations and now have a network of wires that is unsuitable for the power generation grid they have established.
And the Commonwealth promises a partial solution in two or three years via the Snowy but has washed its hands of the looming disaster next summer.
That means that businesses and residents who need power in hot summer days are on their own. Prepare for massive food rotting and equipment (including computer) disruption for those who did not recognise the extent of the destruction of power security by three state governments.
Last week I wrote a three-part series stating that NSW, Victoria and possibly South Australia face a 75 per cent chance of blackouts because their once great networked power systems had been vandalised by politicians who made the easy decisions of plonking solar and wind generators in their state but not the hard and expensive but essential decisions of investing in the grid and providing back up. It was rank irresponsibility, although decisions were made complex by the different owners of the various parts of the network and the need to earn a return on investment.
Following my series, The Australian Energy Market Operator took the unprecedented step of announcing that Victoria faced an incredible 72 days of blackouts and power shortages if Hazelwood was shut this week (April 1).
That’s even more dramatic than my forecast of a 75 per cent chance of blackouts.
Businesses in Victoria from restaurants to supermarkets and offices/factories that do not respond to the combination of my warning and that of the Australian Energy Market operator have only themselves to blame. Meanwhile, Victorian Premier Daniel Andrews walks around with his proverbial fingers crossed hoping Victoria will have another cool summer.
But NSW is not much better. It went very close to blackouts last summer but was saved by Victoria’s Hazelwood power station, which is set to close on April 1. Assuming Hazelwood is shut should it be Sydney or Melbourne that gets hit by the likely combined power shortages? Last summer when Sydney ran short of power Bendigo was scheduled to be blacked out to cover the NSW government’s failure to ensure adequate power for a hot summer. Bendigo residents were outraged that they should pay the price for NSW mistakes but they were lucky and kept their power.
NSW made its own Hazelwood mistake three years ago by allowing the Wallerawang power station to shut (it was about two thirds the size of Hazelwood) without ensuring the necessary investments were made to ensure supply during a hot summer. The owner of Wallerawang found that for long periods during the year the station was not required so made a commercial decision.
So if it’s a hot summer in 2017-18 who should be blacked out— Sydney or Melbourne? It will actually be determined by how the grid is operating but let me hypothetically intervene. I think it fair that NSW suffer one third and Victoria two thirds of the blackouts given that the Hazelwood closure is bigger than Wallerawang
The NSW and Victorian governments are also presiding over the fastest growing populations in the country, which is multiplying the effect of their vandalism.
South Australia made similar gambles and was caught with blackouts last summer (partly storm related) but now says it will go alone to secure its power. Businesses in South Australia have to decide whether to punt their government’s assurances or do what the businesses in NSW and Victoria must do and invest in back up generation and/or batteries.
As I emphasised in last week’s series that it’s not a question of carbon or non-carbon energy. If governments want to go non-carbon then they must do the job properly and change the grid and have back up.
Both the NSW and Victorian governments need to get hold of the world’s best engineers to see what can be done to repair their vandalism. As I understand it there are alternatives even at this late stage. Meanwhile when the lights, computers and refrigerators go down at Point Piper, Cronulla and Kooyong I suspect the Commonwealth members for those areas (Turnbull. Morrison and Frydenberg) will get a big chunk of the blame for not declaring a state of emergency and keeping Hazelwood open by giving the French owner of the station some relief on the $1 billion rehabilitation that is required.
Footnote: I hope the French in the submarine contract behave better than the French power people who own Hazelwood and also own the South Australian gas plant that remained shut for most of last summer. It was not economic to open it.