The AFR’s held their annual energy conference yesterday (Tue 11th) and the day before (Mon 10th Oct), and it’s generated a significant number of articles in their newspaper, and plenty of conversation on social media. I was not there in person, so can’t comment on the conversations actually at the conference itself.
Amongst the articles was the Chanticleer article in the print edition today ‘Heavy costs of botched energy transition’, which flagged a delay in the return-to-service date of CS Energy’s Kogan Creek power station in the QLD region. Tony Boyd wrote:
‘The past two years have shown that coal-fired power generators are more vulnerable to outages, as shown by Friday’s announcement by the Queensland government-owned CS Energy.
It told AEMO that its scheduled maintenance of the 750MW Kogan Creek coal-fired power station, which started on September 17, would take a month longer than expected. Now, it is not scheduled to reopen until December 18.’
I’d missed that development with everything else going on in the market, and our current focus on the completion of our GenInsights Quarterly Update for Q3 2022, so I thought I would have a quick look …
(A) Information from CS Energy
On 16th September CS Energy published the article ‘Kogan Creek power Station readies for $35M overhaul’, which stated:
‘CS Energy CEO Andrew Bills said the power station is being overhauled from 17 September to early November to ensure it would be in prime condition for summer.’
… but then published today (Wed 12th Oct) that ‘Kogan Creek Power Station Overhaul extended’, which notes that:
‘The major overhaul of the power station began on 17 September and has been extended by approximately one month, with a current forecast return to service date of 18 December 2022.
CS Energy CEO Andrew Bills said any decision to extend an overhaul was not taken lightly.
“When overhaul crews opened up the generator for inspections last week they found its stator and rotor required significantly more repairs than expected,” Mr Bills said. This was unforeseen as the previous statutory inspection of the generator did not indicate any issues relating to the stator and rotor.
“We are working closely with the original equipment manufacturer and technical experts on the repairs and to understand the root cause of the issue.’
For a unit that’s under 15 years old, hearing about unexpected issues with stator and rotor is concerning … and note that the root cause has not yet been ascertained!
We’ll need to keep an eye on the (new) RTS date moves any further from 18th December 2022.
(B) What’s in the AEMO data
Opening up the ‘MT PASA DUID Availability’ widget inside of ez2view (whilst saying another thank-you for the ERM Rule Change that makes this possible) I’ve filtered down to just Queensland coal units and looked out 12 weeks into the future from ‘now’ in order to see the following:
Frequent readers should remember to click on any image to open in higher resolution view.
I’ve compared the most recent data update from the AEMO (published for 12:00 NEM time today) with the last run on Friday 16th September (i.e. the day when the first media update from CS Energy above was published, at the start of the outage). A couple quick notes:
1) Not only do we see that (in the focused part of the table) the slippage at Kogan Creek due to the problems found above, we also see other changes that overlap:
(a) A new outage planned at Gladstone unit 1 from 7th November that was not there on 16th September; and
(b) A new outage at Tarong North from 18th November that was not there on 16th September.
2) Outage plans do move around from time to time, but in the 3 weeks visible in the table there’s not a counterposing addition of capacity from any other of the units highlighted.
3) What this means is that the ‘Change’ chart at the bottom of the window is showing mostly negative numbers:
(a) There are some slight positives from 18th December 2022;
(b) The largest negative is a drop of 1449MW for each of the days from 18th to 28th November 2022.
4) With some quick manipulation of the widget (not illustrated in this article) I located that:
(a) It was the MT PASA DUID Availability data set update at 15:00 NEM time on Friday last week (7th October) that was the last update showing Kogan expected RTS date as 6th November; and that
(b) In the (next and) last data update for Friday 7th October (i.e. for 18:00 NEM time) in which the expected RTS date was pushed back to 18th December.
One more thing to keep watch on in the weeks ahead…
(C) Any movement in ASX futures prices?
An obvious next question is what impact the delay might have in the futures market, so I powered up NEMreview v7 to prepare this query focused on QLD in Q4 2022:
For those with a licence to the software, you can open your copy here.
As highlighted on the chart, the BASE futures price (and also the CAP price) have trended upwards since end-of-day on Thursday 6th October:
1) So it seems logical that this would have been one factor;
2) But the NEM’s a complex place, so to attribute this just to the disappointing news about Kogan on Friday 7th October would seem simplistic. The scary headlines out of the AFR’s own conference this week might have been another contributing factor!
(D) Some significant outages on other units
As a bit of a PS, this afternoon I had a look at some other outages:
1) We’d written plenty about Callide C4 and note that the RTS expectation has not slipped further.
2) On the other hand, there has been some slippage on Loy Yang A2.
3) I’d also written previously about Swanbank E … but that one is back in service.