Back on 8th March 2023 we wrote about ‘The never-ending story? More delays in return-to-service at both Callide C3 and C4’.
… At that time the expected return to service was to be 30th September 2023 (for unit C3) and 31st October 2023 (for unit C4).
(A) More slippage on return to service for both units
Alas, those dates have slipped significantly again – with updates in the MT PASA DUID Availability data (perennial thanks to the ERM Rule Change!) now showing in the ez2view widget (i.e. appropriately named ‘MT PASA DUID Availability’ widget) as follows:
The green area of the chart shows what the staggered return-to-service was as at yesterday evening at 18:00 (i.e. same as we wrote on 8th March 2023). The blueish colour shows the new expected return to service … and there’s a big gap!
(A1) Callide C3 slips by >3 months
As it currently stands now (i.e. with the data update for 09:00 this morning) we see that the Callide C3 would first return to service at 234MW capacity on 7th January 2024 … before ramping up to 466MW on 18th February 2024.
That’s a 99-day slippage.
(A2) Callide C4 slips by >6 months
Worse, however, is the slippage at Callide C4.
With this morning’s update, the return to service for C4 is now scheduled to start with an initial step to 210MW on 19th May 2024 … before ramping up to 420MW on 6th July 2024.
Readers will recall that the unit tripped offline on 25th May 2021 with the massive explosion. A stepped return to service beginning 19th May 2024 would make this an outage lasting a smidgen under 3 years … which would surely be the longest outage in the history of the NEM?
(B) News updates from CS Energy
The update to the market has prompted a quick check on the CS Energy Media page – which has revealed two updates recently:
(B1) News article about delayed return to service
This morning the company has published this ‘Updated return to service dates for Callide C generating units’:
Two key sentences at the top of the release:
‘The Callide C joint venture (JV) has revised the return to service dates for Units C3 and C4 at Callide C Power Station following advice from independent technical experts on the cooling tower rebuild project.’
… and …
‘The revised return to service dates reflect CS Energy’s priority of returning Unit C3 for the peak summer demand period in early 2024, then conducting the more complex re-commissioning of the rebuilt Unit C4.’
So my reading of this update is that the timing for Callide C4 is likely to be most subject to flex, given that:
1) Firstly they have to work through the cooling tower rebuild for C3, and then C4; and then
2) They need to deal with all the other uncertainty about restarting a unit that’s been offline for 3 years whilst being repaired:
(a) new turbine and generator;
(b) but also a boiler and associated componentry that’s been offline for a very long period of time (e.g. so potentially has concerns about corrosion etc).
(B2) Slightly earlier news article about C4 investigation
Five days earlier (on 25th May 2023) they’d published this ‘Update on Callide C4 recovery and investigation’:
Two pieces of information jumped out to me in this…
(B2a) About the Investigation Report
‘Mr Varvari said Dr Sean Brady’s external, independent investigation into the Unit C4 incident was entering its final stages.’
… and …
‘“Our internal analysis of the incident, as well as a report by the Australian Energy Marker Operator, identified that C4’s generator protection systems did not operate on the day of the C4 event, most likely because of a loss of DC power supplies to the unit.
“In response, the JV has modified Callide C’s generator protection system and DC power supplies to improve their reliability and add an additional layer of redundancy.’
… I’m sure we’re not alone in really looking forward to having a read of this Investigation Report, when it is published.
(B2b) About the Cost of the Repairs
Also speaking to the cost of the repairs, there was this:
‘Acting CEO Andrew Varvari said more than 428,000 hours had been worked on the project to repair and rebuild the sections of Unit C4 that were damaged in the incident on 25 May 2021.
“Major replacement components such as the turbine, generator and generator transformer have been installed,” Mr Varvari said.’
Leaving aside the cost of the replacement components, even ‘just’ 428,000 hours multiplied by some assumed hourly rate adds up at hundreds of millions in cost.
(C) Any news of the Administration?
The news articles above make mention of the process with respect to ‘the Administrators of IG Power (owners of Genuity)’ … but I could not find any other details with respect to progress there.
There was the ‘Statement regarding Genuity’ back on 24th March 2023 that we noted before – but I’ve not seen anything since?
On 16th May 2023 there was an Media Release ‘Sev.en mulls JV partnerships to acquire “ESG-deprived assets” in Australia, US, UK’ from the part-owner of Genuity (Sev.en Global Investments) that included this somewhat related update:
‘Callide C, Millmerran ownership
Callide C is owned 50:50 by Queensland state-owned CS Energy and Genuity (formerly InterGen Australia), which itself is a 50:50 JV between between Sev.en and Chinese state-owned electricity generator China Huaneng Group. While Sev.en did not specify Genuity’s overall stake in Millmerran, ASIC filings indicate that Genuity controls Millmerran.
The JV partners had planned to split the respective interests in the two plants, with Sev.en taking Genuity’s ownership of Callide C that is not held by CS Energy, and China Huaneng taking Millmerran, Svoboda said.
However, the process is currently on hold and may be dependent on the outcome of the voluntary administration of Genuity companies relating to Callide C, Svoboda said.
On 5 April, Deloitte’s Richard Hughes and Grant Sparks were appointed as voluntary administrators over IG Energy Holdings (Australia) Pty Ltd, and three other group entities, through which Genuity controls 50% of the Callide C power station located in Queensland, regulatory filings show. ’
If any reader can point to more, please feel free to do so below in a comment?
PS1 – Article from the AFR
Also posted today was Mark Ludlow’s article ‘Power prices to spike after delay in return of blast-hit power station’, which provides other useful context: