Bruce Mountain’s commentary about Eraring (and the Energy Transition) is worth a read

I’d not seen it, but one of our readers pointed out Bruce Mountain’s opinion piece ‘Eraring closure exposes the ugly side of our energy transition’ in the Australian this morning:


Whilst I don’t agree with everything Bruce says, it’s worth reading as a useful contribution with respect to the looming closure of Eraring, but also more broadly with respect to the energy transition.

The opinion piece ties in three things:


(A)  What happened on 8th May 2024

As noted in other articles here, on Wednesday 8th May 2024 the NSW region entered Administered Pricing after the Cumulative Price exceeded the Cumulative Price Threshold (and which ended this morning).

In his article, Bruce writes:

‘On Wednesday only one of NSW’s four coal generators was producing significantly less than it normally does. Eraring was at half throttle. Wind generation in NSW was quite normal, demand was not unusually high but solar was not producing – the price spikes occurred in the early morning and evening periods.’

Adding some clarification:

1)  With respect to ‘only one of NSW’s four coal generators was producing significantly less than it normally does’, my sense is that it’s worth highlighting that two of the four coal-fired stations were challenged, as we’d reviewed last Friday 10th May

(a)  Eraring had 2 of 4 units off,

(b)  whilst Vales Point had 1 unit off and the other unit challenged).

… so neither could ramp up as much as they might have.

2)  Also with respect to ‘Wind generation in NSW was quite normal’, I guess what ‘quite normal’ is not specified – and is perhaps a bit subjective.  From my perspective, I’ve also written that wind generation was on the low side, made even worse by significant network curtailment.

Bruce also notes:

But such is the tightness of the NSW market that even reasonably mild reductions in coal generation, combined with weak wind/solar generation, now induce much more expensive gas generation into the market and prices then rocket up.’

… which is a similar point to what we’ve made with this ‘Updated trend of ‘ENERGY’ bids in red, green and blue’.


(B)  Looming closure of Eraring

Bruce is not the only one to connect the dots between what happened over the past week in NSW and what might have happened in 15 months time, had the (two operational) Eraring units not been there.


(C)  Managing (and modelling) the Energy Transition

Bruce’s thoughts with respect to the energy transition are of interest.  He finishes with this:

‘… The energy transition is evidently much more difficult than first thought.

Institutions with the standing needed to honestly tackle hard problems, rather than wishing them away with unrealistic modelling and predictions, are needed. Without such reform, we will have to expect yet more perverse outcomes.’

With respect to the comment ‘The energy transition is evidently much more difficult than first thought.’ it’s been apparent to us* for some time in compiling the series of analytical and statistical reports for WattClarity Deeper Insights the there are essentially two groups of people:

1)  A (seemingly much smaller) group who would read this and say something like ‘well, it’s turning out about as difficult as I’ve always thought it would be, because I’ve tried to be realistic and avoid rose-coloured glasses’.

 * this group includes us at Global-Roam Pty Ltd (publishers of WattClarity) and the team at Greenview Strategic Consulting, with whom we collaborate on the annual statistical digest (latest GSD2023) and the GenInsights Quarterly Updates analytical report.

2)  A (seemingly much larger) group:

(a)  some of who are perhaps starting to realise that this transition is turning out more difficult than they had earlier thought …

(b)  but many more who just keep insisting we need to ‘get on with it’ (or words to that effect), as if that would just magically make many of the hurdles disappear.

Hence the disconnect Bruce writes about (earlier in the article) as follows:

‘While the AEMO is on record pointing out that progress is lagging behind its plan, the gap is now so large the AEMO’s plans stand accused of being far out of touch with reality. …

The NSW government might be accused of failing to think critically ….

Origin also has questions to answer. …’

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

8 Comments on "Bruce Mountain’s commentary about Eraring (and the Energy Transition) is worth a read"

  1. Wind was lower than often the case in the morning, but not the afternoon – when the longest peak prices were sustained. Only VP was substantially below. Eraring was not substantially below, it was half mast when 2/3rds mast on average.

  2. Eraring might “normally” be at “2/3rds mast on average” Bruce but this was very far indeed from being an average situation. Prices were in five digit territory and in those circumstances Eraring would almost certainly have been running near full tilt if it had all four units available – but it had only two (again, not a “normal” state of affairs).

  3. well I am still of the view that if we got on with it, it would be less of the problem. What ever the new supply source is I should have thought there was little doubt than unless demand is falling you can’t close old supply before you build new supply. The fact is that NSW has been ridiculously slow at getting new supply built given the age of the coal generation, the propensity of the coal supply to be throttled by flooding or competitive export parity pricing and the every increasing forced outage rate that requires $100s of m of maintenance capex every year.

    It remains the case that getting new transmission built and more projects through the planning process is the only realistic and achievable answer. And it is realistic and achievable.

  4. An excellent string of comments follow after Bruce Mountain’s article in The Australian.
    One might say the cat is out of the bag.

  5. Hi Bruce and Allan,
    I think it’s worth taking note of the amount of transmission line outages at the time of the price spikes. Appears there were 3 x 330kV lines out. Wollar West – Wellington, Armidale – Tamworth and Collector – Yass. These outages were causing constraints on generation and interconnector flow too. I think they were all planned outages but some work may have taken longer to complete, hence the overlap.

  6. Good points from both David and Trevor (and thanks Rob); those transmission constraints were definitely a very significant factor, and of course sufficient new supply – both energy and capacity (ie fully dispatchable MW) – should be built before existing stuff gets shut down. It’s also worth noting that there was plenty of undispatched coal-fired and gas-fired capacity available at the times in question, it was simply offered at very high prices.

    I think Bruce’s main point (and David’s) about the growing gap between the rate at which the ISP assumes new stuff can get built versus the build rate we are actually seeing is the critical thing here.

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