In the early hours of Saturday 18th May 2019, Loy Yang A unit 2 tripped and came offline, as shown in this snapshot from ez2view Time-Travelled back to just after that time:

Almost 3 weeks later, on Friday 7th June AGL published this ASX notice of “FY20 impact of extended unit outage at Loy Yang”.

It seems that the use of the “extended” word sparked some more widespread concerns:
1)  particularly given that the Victorian region was with South Australia in suffering through 24th and 25th January, now only 5 months ago; and
2)  with the AGL notice stating that the outage “may extend seven months”, which would bring it into summer 2019-20.

It is entirely understandable that there is concern – which is something we might look at further later in the week on WattClarity, time permitting.

(A)  Coverage in the media, and on social media

Following from the AGL notice, I saw some coverage on Friday which both seem to use a Reuters feed in both:

• the Age by Michael Fowler and others with “AGL Energy flags seven month outage at Victoria’s Loy Yang power plant”  and also
• in the AFR under “AGL Energy flags seven month outage at Victoria’s Loy Yang power plant”

Over the weekend it was predictable that there were a number of notes that hit social media about the outage, including these ones (images linked to the discussions that followed):

The flurry on social media (beyond just the above) was followed on Monday morning with an article in the Australian by Perry Williams “States facing summer of blackouts as coal generator goes offline”.

Perry asked me a few questions whilst writing his article, so I suggested he read some of what we’d put together in the Generator Report Card as it would help to provide some context about coal unit “dependability”.

I expect that social media will continue doing what it does this week, particularly with Energy Week conference on in Melbourne, along with this energy storage conference in Sydney.  Hence I thought it might be useful to provide more context…

(B)  Some initial comments from us, in the light of the Generator Report Card

The extended outage of Loy Yang A2 unit is a significant concern – particularly if that outage were to extend into summer 2019-20, which seems possible.  On January 24th and 25th we saw what can happen in an electricity grid that experiences extreme temperatures simultaneous with outages of a few key dispatchable plant and relatively low yield from intermittent resources.

Perhaps later this week, we will have time to post on WattClarity some deeper analysis of possible implications if the outage extends into summer.

Management of an electricity grid (and hence market) has always involved elements of risk, and management of that risk.  As we have explained through the Generator Report Card, that overall level of risk has been escalating in recent years (for a number of reasons).  It’s like we’ve been playing Russian Roulette with the grid/market, but with more loaded chambers than there used to be.

Unfortunately, mistaken comments amongst the broader energy commentariat are actually contributing to this higher risk environment (it’s part of what we discuss in Theme 14 within Part 2).  This is why we invested so much time in the production of a Generator Report Card, in order to show how things actually are.

Concerns about ageing assets, and a possible decline in dependability with them, are not new – I wrote about “doomsday predictions” back in September 2014, for instance.

In more recent times a more concerted campaign has started to attribute every instance where a thermal unit comes offline to the ageing of the asset.  However that’s not the case – and indeed such a simplistic generalisation is one example of a deficit in energy literacy that’s contributing to the escalation of risk.

For instance, our deep analysis in the Generator Report Card does not show a clear systemic trend across the 48 operational coal units for them becoming less reliable as a fleet (though readers might like to reference these notes specific AGL units).  Here’s that chart from the Report Card again that looks at one measure of “Sudden Failure” in this broader framework of “dependability”:

Readers will also note that the highest bars in most years tend not to be during the hottest months of the year, which is also interesting in the context of claims that “coal units break down more in the heat”.  What do seem to be the case are two things:
1)  Firstly (because there are fewer units, and because demand is increasingly peaky) a small number of outages during times of high demand places much more stress on the grid than used to be the case; and
2)  Because there are an increasing number of NEM observers equipped with the latest tools (some of them ours), and because we all know that summer is the critical time, we notice outages a lot more when they happen during summer.

These things do happen from time-to-time.  Loy Yang A4 unit was offline from December 2001 to May 2002 as a result of major failure of its generator that warranted a replacement being shipped in from Siemens in Germany:

• having Siemens supply a replacement in that way ensured a significantly shorter outage than would otherwise have been the case under a “repair” scenario – a replacement might also be an option on this occasion as well (from its own OEM in that case).
• that was 17 years ago, when the station was obviously much younger than it is today.  Age is not the only factor we should be looking at.

This recent outage (and, importantly, the early reactions to it) is just one more reminder of the “world class mess” we’ve all been making of this energy transition.  That’s something we’ve been very conscious of in the 7 months of development of the Generator Report Card.

We’ve done our job, in putting the Report Card together – now it’s over to the broader audience, to use it to help drive positive change and avoid what’s hurtling down the track towards us.

This week’s Q&A Event in Melbourne is sold out, but there’s still a few spots at the upcoming sessions in Adelaide, Brisbane and Sydney for those who would like to learn more about the Report card.

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The order form for the Generator Report Card is here.