Several updates/clarifications added on Wednesday 1st April following several conversations.  Time permitting we might be able to add a follow-on article down at a station level.

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It’s over four weeks ago now, that (on 28th February 2026) the current round of active hostilities commenced in the Middle East …

… and I can’t see the hostilities are going to end anytime soon.

That’s led to hundreds of pages of newsprint being generated (even just in Australia) with various angles of coverage of the implications.  In the past couple days, two articles in particular have jumped out to me:

1)  I’ve already written here about an ABC article (on Monday 16th March) speaking about Fuel Rationing as a possibility …

(a)  but it was Colin Packham on Thursday evening 26th March who noted that Fuel Rationing was actually underway in some locations.  Colin wrote:

‘Some petrol stations in metropolitan areas have begun limiting how many litres customers can pump, as supply strains once confined to regional Australia spread into major cities despite assurances fuel inventory remains adequate.

On Sydney’s Northern Beaches, a Shell-branded Viva service station informed customers they could not buy more than 50 litres per vehicle due to supply restrictions, with the filling of jerry cans or external tanks banned. The site is operated by an independent retailer.’

(b)  and, of course, we have the National Cabinet meeting tomorrow (Monday 30th March) at which some form of restrictions may be announced on a national basis.

2)  Then on Saturday morning 28th March, Michael Read wrote an article titled ‘‘It will affect everything’: This was the week the war hit home’ that (even just in the title) speaks to the concern.

So, whilst we’ve been thinking through possible implications on Energy Security with respect to the National Electricity Market for the past 4 weeks, these articles (and a couple one-on-one conversations this week) prompted us to complete this article over the weekend.

We’ve been wondering … as Fuel Rationing is likely to be in more widespread use in the coming weeks (either by top-down Government Mandate, or by bottom-up Fuel Retailer actions), what impact might this (and general scarcity of liquid fuels) have on Energy Security in the National Electricity Market?

Liquid-Fuel use in Peaking Generation (most people understand this)

It’s quite likely that any analyst addressing this question will firstly think about the use of diesel fuel in peaking generation.

Diesel, or more broadly Liquid-Fuelled, Peakers

In our RenewEconomy-sponsored NEMwatch Live Supply & Demand widget we make some (necessary!) simplifying assumptions to allocate all units (on a one-to-one basis) to a limited set of Fuel Types, with one of these being Liquid Fuel:

1)  This is primarily Diesel fuel

2)  But there are some other cases allocated under this category

…  such as Origin’s Mt Stuart peaker in Townsville were originally fuelled by Kerosene (as noted here by Power Technology):
(a)  though note that the Origin webpage here notes that ‘Mt Stuart uses an open-cycle gas turbine system in which the three turbines are fuelled by Extra Low Sulphur Diesel.’)
(b)  I’m not sure exactly when that change was made.

With the ‘Trends Engine’ within ez2view today, I’ve quickly prepared the following trend of utilisation of units categorised the same (i.e. simplified) way inside of our software:

So a beginner analyst would be forgiven for looking at the above and concluding that there’s not much risk of flow-through effects to Energy Security in the NEM.

… but they’d also have fallen into a ‘that was way too simplistic’ trap.

But wait, there’s more…

We’ve recently posted one example of where the above is way too simplistic:

1)  On Tuesday 24th March, in part prompted by a ‘head’s up’ by a reader (and ez2view user) we took a look at ‘More delays in operational date for Hunter GT (i.e. the old Kurri Kurri)’.

2)  To her credit, Angela Macdonald-Smith picked up the baton at that point, and followed on with her article ‘Snowy suffers fresh pain over Kurri Kurri project delays and costs’ the following day (Wednesday 25th March) in the AFR.

From Angela’s article, it’s worth copying in the following content:

‘The federal government-owned power generator is also considering deferring the completion of testing to run the 660-megawatt generator on diesel, given the crunch on supply due to the Iran war. Testing to run the plant on gas is already complete.’

… as this illustrates two things:

(a)  Some units (like these HUNTER* units) are designed to run dual fuel (e.g. gas or, in the absence of gas, on diesel).  Something the simplified (single fuel) model used above completely overlooks, by necessity

(b)  In the case of Hunter GT, we might have a case here with the latest delays are (to some extent) related to concerns about diesel shortages.

Those with memories of the 2022 Energy Crisis will recall other units (I have a vague recollection that Jeeralang was one of these) switching to use liquid fuel at times due to the high price of gas supplies.

So let’s take cautious steps before concluding ‘nothing to see here’, in relation to possible severity of impact in the coming weeks (if the conflict is not resolved quickly).

Significant Oil (incl some Diesel) use in Coal-Fired Generation (how many knew these details?)

What’s perhaps less widely understood are that coal-fired generation uses quite a large amount of various types of oil (incl diesel) in the generation process

… let’s hope the advisors to the relevant Energy Ministers have been relaying this to them prior to tomorrow’s National Cabinet.

Let me briefly explain…

Liquid Fuel Diesel use in Coal units during Startup

First and foremost it’s useful to note that all coal units burn something other than coal in order to get a flame started and stabilised when re-starting units after trips or outages.

1)  Many (but not all) of these coal units burn some kind of liquid fuel.

2)  Time permitting, we’ll endeavour to add a follow-on article with more details

In exploring these aspects during the week just passed, we crunched some numbers and then thought it warranted presenting more broad results in their own article earlier on today – hence ‘Delving deeper into coal unit (re) starts over >17 years … January 2010 to March 2026’.

Readers can read more of the details here … but the most relevant details are:

1)  That liquid fuel diesel usage increases with the longer types of starts

… with re-starting from ‘cold’ generally having the most demand on liquid fuel.

2)  And, as we see in that article, the number of cold starts in recent times has been a little higher than in the first years of this longitudinal study (for the same cohort of 44 still-operational coal units):

We see this here:

So that’s certainly something to keep in mind, with respect to the possibility of Liquid Fuel Rationing as the extended summer period ends and we enter a traditional ‘outage season’ prior to winter biting.

Liquid fuel Diesel use in Coal units for Flame stabilization (e.g. during Low Loads)

But we’re not done there, unfortunately.

There are specific nuances between different units – but, generally speaking, understand that coal units sometimes need to insert oil torches to stabilize the coal-fired flame* during low load operation.

* low load operations naturally means fewer coal mills in operation. Given that they inject from alternate sides of the boiler, this creates inherent difficulties in keeping a flame stable when fewer mills are in service, and potentially carrying less fuel.

There’s no public data on the use of oil onsite in coal generators – but, as a proxy for this, our analysts have done some complex number-crunching, as a result I’m able to present the following high-level trend*:

* again remember we’re using the same cohort (i.e. 44 x still operational coal units only) in order to make this trend consistent over time

Again, if someone wants to learn more about the particular details of what we’ve done here, reach out to me directly – time permitting we might be able to share more (one-on-one).

The key take-aways here are that:

1)  Use of ‘operations at minimum load’ has risen to be a very large amount of daylight hours.

(a)  The trend notes that 7,000 hours in total represents all of the 44 coal units

(b)  But then readers should reflect that oftentimes there are coal units on outages … so the ‘time at minimum load’ becomes even more extreme than that.

2)  Now, remember that we don’t actually know how much each unit

… but, if any Advisory to a Minister is reading here (and we know quite a number do), my suggestion would be to ensure that you’re keeping close tabs on this…

Diesel use for Coal units in Coal Mining and Deliveries

The above does not touch on liquid fuelled use in the mining and delivery of coal to these stations:

1)  Offsite, the coal trains are (I believe) all* electrified, and so are the conveyors, but there have in the past been coal trucks used for deliveries at times.

* though readers should see John’s comment below, correcting me with respect to the NSW coal delivery trains

2)  Onsite at the coal stations there are a number of heavy machinery used (e.g. big Dozers) in the coal delivery plant.

Liquid fuel use in other Generation Assets

Perhaps another time we’ll come back to these other types …