The head of one of the big three energy utilities, EnergyAustralia CEO Catherine Tanna, has criticised the Australian Energy Regulator’s legal action against wind farm operators over their part in the South Australia 2016 “system black” event, describing it as “disappointing” and a “blame game.”
The AER this month stunned the market when it began court proceedings against AGL Energy, Neoen Australia, Pacific Hydro and Tilt Renewables over the role of their wind farms in the 2016 South Australian blackout that left 850,000 homes and businesses without power.
As RenewEconomy reported, the action has re-ignited furious political debate around the performance of wind farms, and raised questions as to why the regulator has not sued the fossil fuel generators and the “black-start” installations that failed to work as required.
It has also revealed a major disconnect between Australia’s major energy institutions over exactly what happened in the lead up to the South Australia blackout, and over the measures required to stop it from happening again.
In comments at the end of an EnergyAustralia media presentation on Wednesday outlining the “megatrends” shaping Australia’s energy market, Tanna said she didn’t understand the action being taken against the wind farm operators.
“When something dramatic like that happens, our responsibility … is to get experts in the room together to work out what happened, and how to stop it from happening again,” Tanna said.
“I get really disappointed when the first response is, ‘heads will roll’. The question for the AER and potentially for AEMO, is what is it we are saying went wrong?” She added.
“I would like to see the best of our people… working on how can we make sure these things don’t happen again, rather than participating in some sort of blame game.”
The comments followed an in-depth presentation on the transformation of the Australian energy industry, in response to three global megatrends: decarbonisation, falling technology costs, and a focus on fairness.
“Within a decade, maybe less, the Australian energy market will have changed beyond recognition,” Tanna said.
“We’re talking a complete transformation which will require energy companies to enter a new social contract with the community. Families and businesses will expect that, where value is created in a new, modern and cleaner energy system, they’ll have opportunities to share in that value.”
“People want the clean energy transition, but many are struggling with rising power bills. Cost, emissions and reliability – it’s the trilemma,” she said.
“The community isn’t asking for anything that’s unreasonable or out of reach. All the pieces of the puzzle for a modern, cleaner energy system already exist, and it’s taking shape; it’s a system underpinned by wind and solar power, supported by storage, like commercial batteries and pumped hydro, demand response, energy efficient technology and flexible generation.
“The challenge isn’t technology, or even engineering – it’s planning, to make sure all the pieces fit together,” she said.
A key part of this planning, of course, would be around the orderly exit of Australia’s ageing coal-fired generators, which includes EnergyAustralia’s Latrobe Valley Yallourn power station.
There has been much media speculation around when plants like Yallourn, and AGL Energy’s Liddell, will shut down, and as recently as June, EnergyAustralia sought to hose down rumours that its Latrobe Valley plant would be pushed into retirement earlier than intended due to the shift to renewables.
But in comments on Wednesday, Tanna said the company’s plans to run the plant to 2032 could be subject to change resulting from the Labor state government’s target of 50 per cent renewables by 2030.
“We think the policy settings that the Victorian government uses could actually have an impact on the future of Yallourn,” Tanna told media, while stressing that the gen-tailer would – for its part – be sticking to its commitment to give five years notice before closing the plant.
“There are things we can’t control or don’t know,” she said. “But we think long notice of closure is a really good idea.
“What we’re mainly focused on is, what are the replacements? We’re working on some of the solutions for the Liddell closure… The missing ingredient is good planning.”
Tanna also stressed that assets like Yallourn were increasingly not fit for purpose in an energy market that was rapidly changing “beyond recognition.”
“Those assets – not just Yallourn, but all older power stations – are designed to run at baseload, and not …(to be) ramped up and down or turned off in the middle o the day.
Once you start doing that with older plants, she said, you “do start to encounter more reliability issues.
“We have found ways to operate Mt Piper more flexibly, but it is harder with something like Yallourn. We need to work out what role they have.”
Date: Aug 21, 2019