Well, well – where’s Sir Joh when you need him?
Whilst busy working on other developments to keep our many and varied paying customers happy, one of our canny WattClarity readers alerted me to this Market Notice from yesterday evening talking about likely industrial action at Loy Yang A power station – taken from NEM-Watch:
Talk about pouring oil onto a blazing fire…
No sooner have the COAG Energy Ministers disbanded from their chinwag (and photo opp) session yesterday will they be considering re-convening to address the latest emerging risk to security of supply (one I noted here as a potential game changer).
Here’s one view of AEMO’s MT PASA forecast for the next 12 months showing aggregated generation capacity scheduled to be made available in the Victorian region of the NEM:
For those not familiar, scheduled generators have to indicate to the AEMO how much capacity they are planning to make available to the market (at any price) each day for the next 2 years. The AEMO stacks these up and updates every 3 hours. In the ez2view chart above, we highlight the current run (from 09:00 today) and compare this with the one from 18:00 yesterday (i.e. prior to the announcement).
What the AEMO does then is compare this available capacity with what they expect the demand might be to produce a daily figure for Surplus Capacity (with the general idea being the higher the surplus the more secure the supply, and also the lower the price). It’s obviously dependent on what the demand actually turns out to be, but gives a useful guide as to the relative risks on each day over the period.
Here’s a view (again from ez2view, this time in Forecast Convergence) of how this forecast of Surplus Capacity from MT PASA has changed over the past 2 years – each row a separate weekly forecast. I’ve highlighted the step change following the Hazelwood closure announcement, however it does not yet* reflect the effect of the Industrial Action at Loy Yang A :
* the effect of the industrial action is not yet shown as these forecasts are only updated once each week (on Tuesdays) – hence we’ll have to have a look next week for an update.
Now it must be said that the Christmas period will be one of lower demand, and that Hazelwood is still running for another few months – hence the risk of “lights going out” is low if the industrial action is of short duration. However one does still wonder – with Brown Coal generation businesses facing terminal decline, how does such an audacious plan actually represent the interests of the workers at the plant?
Are they smoking the stuff down there, rather than burning it in the boilers?
I’m pretty sure the soon-to-be-redundant workers at the neighbouring Hazelwood plant would be all too happy to swap jobs with those workers at Loy Yang A who evidently want a longer Christmas holiday (in fact, perhaps that is part of the plan the unions have in mind in a “young for old” swap).
One might wonder if the Unions have a suicide mission in mind?
Another example of unions playing Russian Roulette with our electricity supplies (i.e. following the risk of action at Longford, since averted)? This is a situation far too familiar for those with long memories of the SEQEB workers dispute of the 1980’s – and we all know how that ended…
I can already hear the responses from those on the green/left of the energy debate, using this as an argument for the risks inherent in large, centralised (and heavily unionised) production facilities, which in this case just happen to burn dirty brown coal.
The moves by this unionised workforce will only work to hasten the demise of Loy Yang A – and where does that leave the employees (and union members)? Redundant, but perhaps with a bigger redundancy payout by virtue of these high-stakes moves.
PPS at 14:25 – it gets much worse. See below the latest run showing the effect of the capacity of Loy Yang A being out for the whole of 2017.
No apparent mention of Loy Yang B, though… (though I do see it in this article on the AFR)
PPPS at 15:41 – if that was worse, than this is dire. See below a more updated run, which shows another 980MW of capacity coming out from 28th December through until 17th March. This suggests perhaps Loy Yang B, as well?
I also note that this article in the Age today is growing in length, and now notes that:
“The Andrews government quickly responded on Thursday, stepping in to terminate the actions from both sides due to the risk of significant damage they posed to the economy. Industrial Relations Minister Natalie Hutchins launched the application to the Fair Work Commission.
‘This will force both parties to get back to the table to end this dispute and the Fair Work Commission is the appropriate place for this to occur,’ she said.
The government’s request could cause the tribunal to intervene and force the long-running dispute to be settled without negotiation.”
PPPPS at 16:30 – strike has been called off?
According to ABC news, the strike has been called off:
One does wonder – what has been achieved, for the CFMEU, other than to stick a big target on its back (and the back of Bill Shorten, by association) with respect to Industrial Relations reform…
Several days elapsed, during which time comments were added below.
PS on Wednesday 21st December – ETU calls for strike now