May 2017

25 May AEMO considers options for better load management in VIC and SA

The Australia Energy Market Operator (AEMO) continues to estimate there could be a lack of reserve in both Victoria and South Australia for the 2017/18 summer. The latest projections show reserve shortfalls above 800 MW for Victoria and up to 330 MW for South Australia. The reserve shortfalls have been present for long enough that AEMO no longer believes there will be a sufficient market response unless they intervene. AEMO has used provisions under the Reliability and Emergency Reserve Trader (RERT) rules to ask for expressions of interest for additional generation to be brought on-line, or for a reduction in demand. AEMO is looking for a RERT Panel which can provide short...

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18 May CEOs concerned about energy price rises

The CEO Business Prospects Survey conducted by The Australian Industry Group (AI Group) has identified a concern among CEOs about a rise in energy prices in 2017. The annual survey received responses from 285 CEOs representing all major non-primary private-sector industries Australia-wide. The industries were grouped into mining services, manufacturing, construction, and services. Edge was particularly interested in the results as our core business is supporting clients from these industries in managing their energy costs and portfolios. Many respondents are cautiously optimistic about business conditions in 2017 but maintain an almost neutral position when it comes to business investment and employment. There are several positive factors that contribute to this optimism including;...

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18 May ARENA launches new investment plan

The Australian Renewable Energy Agency (ARENA) has this month launched its new Investment Plan outlining the priorities which will guide funding from their Advanced Renewables Program. Funding is expected to reach $800 million over the next few years. The Investment Plan is part of ARENA’s commitment to demonstrate how renewable energy can contribute to a reliable, secure, and affordable energy system for Australians.  ARENA will address these and other challenges as Australia moves towards a low emission economy. “We are looking for new ways to adapt our electricity grid to increase productivity, make the grid more flexible and better integrate renewable energy so it can be stored and shared when and where...

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18 May Planning Assessment Commission (PAC) to determine Springvale Mine future

The NSW Government Planning Assessment Commission (PAC) met yesterday to discuss licence conditions for EnergyAustralia and Centennial Coal’s Springvale Water Treatment Project. The Water Treatment Project was proposed to meet conditions as part of a 2015 approval for the expansion of Springvale Mine. The approval condition requires the mine to reduce its release water salinity from 1,200 microSiemens per centimetre (µS/cm) to 1,000 µS/cm by June 2017, and 500 µS/cm by 2019. Failure to meet the condition could result in a loss of licence for the Springvale Mine. This closure would mean there is no coal available for EnergyAustralia’s Mount Piper Power Station which could result in a shut down. The proposed...

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17 May Have forward prices peaked?

Following the closure of Hazelwood Power Station in March 2017, forward prices quoted on the Australian Stock Exchange (ASX) increased across all regions and time periods. However more recently, forward prices were starting to soften until threat of industrial action at Loy Yang A and associated mine caused concern over energy security and availability of supply. The proposed industrial action was called off by the Fair Work Commission and the reduced prices have continued. The price changes are particularly pronounced in Victoria, though the northern states of New South Wales and Queensland have also been affected. There has been issues at the Loy Yang A plant, with three of the four...

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10 May Budget 2017: Morrison reveals Energy for the Future package

Scott Morrison last night delivered his 2017-18 federal budget which included a commitment from the government to deliver affordable and reliable energy through its energy security plan. He reiterated a number of prior announcements including; Snowy Mountains Scheme 2.0, expansion of pumped hydro storage schemes in Tasmania, and a $110m equity investment in a solar thermal project in Port Augusta, South Australia. The Federal Government announced it’s in negotiations with New South Wales and Victorian State Governments to buy Snowy Hydro outright. The government currently owns 13% and experts are quoting a price around $6 billion to purchase the remaining share. Unfortunately, there was no certainty given to any future policies around carbon...

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09 May Update: Loy Yang A Industrial action cancelled

The Fair Work Commission (FWC) today ruled to terminate proposed industrial action at Loy Yang A power station and associated mine. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) had voted to take strike action due to a dispute with AGL over pay and conditions for its members. AGL determined that the mine and power station couldn’t be operated safely if the strike went ahead and notified the union it would conduct a lock out. The market operator (AEMO) was informed of AGL’s decision and determined that the loss of the power station and mine would present difficulties for the market. AEMO is concerned a reduction...

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05 May Update: Potential shut down of Loy Yang A Power Station

Updates have been received following yesterday’s announcement about proposed industrial action at the Loy Yang A power station and associated mine. The market operator (AEMO) has received updated information on the availability of Loy Yang A and the capacity of Engie’s Loy Yang B which takes coal from the mine. Prior to the announcement and these further updates,  the supply / demand balance was already tight particularly during summer. Figure 1: Medium term outlook 4 May 2017 Source: AEMO The updates received from the Loy Yang A and Loy Yang B power stations show reserve shortfalls increasing and a lack of reserve almost every day starting May 10, 2017. Figure 2: Medium term outlook 5...

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04 May Proposed shut down of Loy Yang A could put energy security at risk

Earlier today, AGL announced their intention to take industrial action against the workers at the Loy Yang A power station and associated mine. AGL informed workers they would be locked out from May 15, 2017. The lock out is in response to the Electricity Trades Union (ETU) announcing industrial action. The disagreement stems from an ongoing dispute over pay and conditions at the Loy Yang A facility. This is not the first time that AGL has threatened to lock out workers over this dispute. A similar announcement was made in December 2016. However, the union decided to cancel its industrial action at that time, and AGL didn’t go ahead with the lock...

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04 May Clean Energy Regulator Releases Report on 2016 Renewable Generation

The Clean Energy Regulator last month released their report into the current status of renewable energy in Australia. The report titled ‘Tracking towards 2020: Encouraging renewable energy in Australia’, reviews operations in 2016 and presents information regarding progress towards the Federal Government’s renewable energy target. 2016 was always going to be a key year in meeting the Government’s target of 33,000 GWh of new renewable generation by 2020. Although there was insufficient renewable generation built during 2014 and 2015, this report maintains an optimistic view that the target can be reached on the current trajectory. Its fact sheet declares there were more than double the number of new renewable power stations accredited...

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