The case builds for more gas generation

September 5th, 2017

The critical role that gas fired generation plays in providing stability to the National Electricity Market is in sharp focus again this week, with one state seeing a return to service of mothballed gas turbines, the market operator reportedly warning the Federal Government of a looming shortfall in baseload generation if more thermal generators don’t become available to support intermittent renewable sources. To top it off, the NSW Government is raising concerns too.

Hydro Tasmania is bringing the 210 megawatt combined cycle gas turbine (CCGT) at the Tamar Valley Power Station back online this week to offset the reliance on high cost power coming to the island State through the Basslink interconnector.

As this report says:

“The operation of the unit is commercially feasible because use of gas to generate electricity is cheaper than importing electricity from Victoria where prices have skyrocketed.”

The Tamar Valley Power Station also houses gas fired peaking plant, so it will be interesting to see whether that capacity will be called into service in coming months as summer approaches.

Meanwhile, the Australian Energy Market Operator has reportedly delivered a blunt warning to the Federal Government about a looming baseload shortage caused by the ongoing phase out of coal fired generators.

As The Australian reports:

“The new advice from the Australian Energy Market Operator to Energy Minister Josh ­Frydenberg emphasises the need to fix the shortage of baseload power by using coal or gas generators alongside more renewable generators.”

That aligns with a key recommendation of the Finkel Review into the security of the National Electricity Market, and comes at a time when States are preparing for summer.

In response to questioning at a NSW Parliamentary Budget Estimates hearing about NSW’s summer preparedness last week, State Energy Minister Don Harwin highlighted the challenge when he told the Committee that:

“I wish I could guarantee that but you know we are part of a national electricity market and we cannot completely divorce ourselves from what is happening in South Australia and Victoria. Some of the regrettable approaches that have been taken—in particular I think of what has happened in South Australia with the Northern Power Station—in withdrawing generation options has really made us somewhat more vulnerable than we would have otherwise been”

With the market operator and a major energy using State starting to ring alarm bells, the time is now to ramp up the use of gas fired generation.

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