Australia Fears Blackouts as Heatwave Takes Toll on Grid

Australia’s grid is teetering on the brink of collapse as the country battles to maintain reserve generation capacity during the worst heatwave since tracking began.

As of Thursday, Jan. 24, the Australian Energy Market Operator (AEMO) had issued at least 35 lack-of-reserve (LOR) forecasts in January, compared to just two in December.

AEMO issues LORs when there is a danger that the loss of a generation asset could lead to a shortfall in supply. An LOR3 means the shortfall would happen if the three largest generation plants in a region should fail simultaneously, while LOR2 means only two plants would need to fail.

In December, AEMO issued forecasts relating to two potential LOR2 situations. So far this month, the operator has warned of seven LOR3s, 15 LOR2s and 13 LOR1s, mostly for Victoria, South Australia and New South Wales.

Although most forecast LORs have been avoided in practice, there have been at least two actual LOR1 events this month. On Jan. 17 in New South Wales, the actual capacity reserve fell to 1,148 megawatts against a forecast requirement of 1,320 megawatts.

On Jan. 24 in Victoria, meanwhile, the capacity reserve fell to 761 megawatts, against a requirement for 1,120 megawatts. During these periods, each state was operating without enough reserve capacity to cover the loss of its biggest generation plant.

Reserve generation levels were particularly thin in New South Wales early Thursday, after the sudden failure of a unit at AGL Energy’s aging Liddell coal plant, the Australian Financial Review reported this week.

The lack of reserves has prompted Victoria and South Australian wholesale energy prices to careen up to AUD $14,500 (USD $10,300) per megawatt-hour, the paper said.

AEMO, which is led by former New York regulatory chief Audrey Zibelman, has advised consumers to cut their electricity consumption. The operator has also moved to quell blackout fears.

“The concern we always have is that when the system is under extreme pressure, the machines, really the generators and the networks, just like people, feel the discomfort,” Zibelman said on Australia’s ABC News.

“They become stressed, and we have the possibility of additional outages,” she said. “What we like to do in these situations is to make sure that we have enough in reserve so that if we lose power plants, we have something to turn on.”

This week, AEMO also activated its Reliability and Emergency Reserve Trader mechanism, asking large energy users in Victoria to power down consumption and free up extra reserves. So far, AEMO’s efforts to swerve the capacity crisis appear to have worked.

Even though air conditioning use has soared in the face of record temperatures, which topped 115º F this week in Adelaide, the only blackouts so far this Australian summer have been down to prosaic causes such as cable failures.

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