Thursday, 14 November 2019

In reply to  Ms BATH (Eastern Victoria) (16 October 2019)

Ms D’AMBROSIO (Mill Park—Minister for Energy, Environment and Climate Change, Minister for Solar Homes):

I would like to thank you the Member for raising these important matters with me. I understand that power outages, which often occur at times of extreme weather such as heatwaves, can place significant strain on communities and industry, especially if prolonged. I also understand that this can be particularly distressing for our farmers whose livestock may rely on electricity for provision of water.

The Andrews Labor Government continues to work with the Australian Energy Market Operator (AEMO) and industry to ensure secure and reliable energy supply. I have written to and met with all generators, including those with extended outages, to seek their assurance that they are proactively preparing for summer.

Victoria’s privately-owned, ageing coal-fired power stations are becoming less unreliable, especially during periods of extreme heat and high demand. AEMO has reported that on 25 January 2019 approximately 1,600 megawatts (MW) of coal generation was unavailable. This represents almost 20 per cent of the State’s capacity being offline on a day when we needed it most. Currently, there are extended unplanned outages at Loy Yang A and Mortlake Power Stations.

AEMO will be acting to address the risks of unserved energy over summer 2019-20, including through procurement of emergency reserves through the Reliability and Emergency Reserve Trader (RERT) scheme. The RERT scheme allows AEMO to contract for additional electricity reserves ahead of a period where there is a risk that existing reserves may be insufficient to meet the required level of reliability.

While AEMO has forecast that Victoria’s huge renewable energy push will greatly improve energy supply in the coming years, the existing privatised coal generators can’t be relied upon not to break down during prolonged periods of hot weather. This is why the Andrews Labor Government has taken action, requesting an exemption from the Australian Energy Market Commission to allow AEMO the option of negotiating longer RERT contracts, where it’s cheaper to do so.

In addition, our assistance to large scale battery programs has incentivised the entry of more than 55 MW of dispatchable capacity on the system for the coming summer. The batteries are strategically located at known stress-points in the electricity network, providing backup power and grid-stabilisation functions that are vital to maintaining reliable energy supply.

While early preparation is necessary, the risk of localised electricity supply interruptions can never completely be eliminated and may increase during periods of high demand such as extreme heatwaves or storm events. All business and residential customers should continue to have plans in place for managing the impact of unexpected supply interruptions.

I understand that a consistent and secure energy supply is of key importance to those Victorians working in the agricultural industry, and in other industries in regional and rural Victoria. The Victorian Government will continue working with AEMO and industry to maintain a reliable and sufficient energy supply for the upcoming summer period.

I thank the Member for her question.