Extra pressure on energy grid as scorching summer looms

Extreme heat poses a dual threat, disrupting gas and coal-fired power generators at the same time as power demand peaks when millions of people switch on their air conditioners at once. That scenario played out last January, when up to 200,000 Victorian households were hit with power outages as Melbourne endured its hottest day in five years while units failed at the coal-fired Yallourn and Loy Yang power stations.

Recent summers in southern states have featured power outages due to pressure on the grid but the coming season could be particularly trying, especially in Victoria. Two of the state’s major generators – AGL’s Loy Yang coal-fired power station and Origin’s Mortlake gas plant – have had units out of service for extended periods.

AGL’s Loy Yang brown coal-fired power station in Victoria’s Latrobe Valley has had units out of service for extended periods.Credit:Justin McManus

Since last year AEMO has secured 1500 megawatts of emergency back-up power, 125 MW of reserves through off-market generation, along with demand management programs where customers are paid to shift or reduce their energy usage.

“The introduction of these resources delivers a welcomed improvement to reliability,” AEMO chief executive Audrey Zibelman said.

Tony Wood, energy director of the Grattan Institute think tank, said AEMO had secured expressions of interest for more than enough back-up capacity to cover the units remaining offline in Victoria in the event “things went pear-shaped”.


“They will be talking virtually every week with governments and energy companies about what’s going on, and are as ready as they can be,” Mr Wood said.

“Broadly speaking, AEMO is on top of everything. But everyone is a little bit nervous.”

The nation’s biggest power generator, AGL, said it remained confident that repairs to Loy Yang Unit Two in the Latrobe Valley were “on track” to be completed by mid-December in time for the summer peak.

Energy Networks Australia, representing transmission and distribution companies, said extreme weather such as fire, winds and storms could damage infrastructure. When there is not enough electricity being supplied, AEMO may also direct networks to cut power to customers, known as load shedding, it said.

“Outages can occur for a number of reasons when temperatures hit extremes and networks respond as quickly as possible to restore power,” the group’s chief executive Andrew Dillon said.

For the nation’s large power companies, Australian Energy Council chief executive Sarah McNamara said individual power station units experienced unplanned outages from time to time.

“The biggest risk occurs with very high demand … usually that is at the end of a run of two or more extremely hot days,” she said.”Losing power even for short periods during a heatwave can cause real inconvenience. But electricity providers will continue to do everything possible to avoid that occurring.”

Victorian Energy Minister Lily D’Ambrosio said the report showed the market operator was doing its job and securing its supply for the coming summer.

“We’ve been leading national reforms in energy reliability and now private power companies need to do the heavy lifting to make sure their plants are available when we need them,” she said.

“Victoria’s renewable energy targets will significantly improve our energy supply while reducing emissions, which is why we continue to drive investment in this vital industry.”

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