Later this week, another late-season heatwave will sear New South Wales, potentially setting record electricity demand in March for the second time in less than a fortnight.
For many people, the warmth will be welcome after years of relatively wet seasons and Sydney’s coolest summer for maximum temperatures in 11 years.
However, a few within Dominic Perrottet’s government and the electricity sector may find it less relaxing. With the state election just over a week away, the incumbent Coalition can ill afford any hint of electricity disruptions to remind voters – much like the rolling risks for Sydney trains – that key infrastructure remains fragile.
Energy issues haven’t been prominent in the election so far, with announcements focused primarily on how to get more renewable energy and storage on to the grid. It’s also a reflection of the tripartisan approach to decarbonisation efforts, with Labor and the Greens signing up to energy minister Matt Kean’s 20-year electricity roadmap launched in late 2020.
It’s very unlikely that lights are about to go on the blink or air-conditioners fail. Still, unlike the early March heatwave, western Sydney is forecast to bake with four days from Thursday forecast to reach the mid to high-30s. Brisbane, too, is predicted to warm to 35C on Friday, adding load to the national grid that wasn’t there last week.
The issue is the state has a finer margin for error than most voters realise, and that margin is about to narrow further.
Just weeks after the election, the remaining three units of AGL Energy’s Liddell power station start to close. By 28 April, the 52-year-old clunker in the Hunter will shut, taking its remaining 1,260 megawatts – or about 10% of NSW’s capacity – offline.
Many of the problems NSW faces are not the government’s fault. Snowy Hydro’s $600m Kurri Kurri gas plant in the Hunter was supposed to be online before next summer to cover Liddell’s exit. That’s been delayed at least a year.
Snowy’s gargantuan 2.0 pumped hydro project has its main borer stuck and few people expect the delayed 2027 deadline will be met.
And Origin Energy’s decision to accelerate by seven years to 2025 the closure date of Eraring, Australia’s biggest power station with 2,880MW capacity, was also not envisaged by the roadmap.
And those are the known issues. Will Centennial Coal keep supplying coal to EnergyAustralia’s Mt Piper power plant near Lithgow as speculation swirls over the future of both?
(A spokesperson for Centennial said the firm “continues to work proactively with the NSW government and our customers to underpin the domestic energy market”, adding “there are no current issues impacting Centennial’s ability to supply Mt Piper”.)
Whether key transmission lines linking the renewable zones and Snowy 2.0 will be delivered in a timely and economic manner, is another issue.
Jihad Dib, Labor’s energy spokesman and the person set to be NSW’s next energy minister should his party form government, is not alone in being wary about what’s ahead.
“It’s the most exhilarating, the most challenging job,” Dib tells Guardian Australia. “If you stuff up, you have a massive impact on people’s lives.”
Dib supports Kean’s plan to replace coal plants with renewables and storage but says too little has been achieved in the two years since its launch.
“It’s not about a glossy brochure or a press release,” Dib says. “I want to see not just a commitment [for investment], I want to see a connection.”
A spokesman for Kean says the roadmap and its five designated renewable energy zones have attracted registrations of interest for 152 gigawatts of new projects. Those offerings amount to $283bn in private investments.
“The first tender under the roadmap has received overwhelming interest with 16 projects with a combined capacity of 4.3GW, capable of powering the equivalent of almost 1.6m homes,” he said. “Results of these tenders are expected in the coming weeks.”
Proponents of the plan say it has built-in flexibility reflected in the accelerated 850MW Waratah Super Battery – the largest committed battery in the southern hemisphere. It could be online by 2025, ahead of Eraring’s closure. The government also issued tenders at the end of last year for a 380MW so-called firming battery that would run for two hours to fill gaps.
While adequate generation can be supplied, lowering costs for households and businesses will be a more difficult task, insiders say. NSW’s wholesale power prices are higher than Victoria’s and Queensland’s and the gap has lately been growing.
One executive at a large renewable energy developer, though, reckons Dib is right to be concerned about the pace of execution.
“The [roadmap] was great, and it remains very good,” the executive says. “It just isn’t being implemented ... It takes too long for projects to be approved.
“If Eraring closes on time, they are definitely stuffed.”
The executive predicts Origin Energy will demand a lot to keep running a plant the company claims to be spending $240m a year to maintain.
Dylan McConnell, a University of NSW energy expert, says it’s surprising the grid remains so strained even after AGL flagged Liddell’s closure at least seven years ago.
“How are we still in this position … given we’ve had such a long time?” he says.
With the Bureau of Meteorology declaring on Tuesday the chance of an El Niño for later in the year is now 50/50, operators will likely have to prepare for much larger and intense heatwaves than this week’s.
“It’s not hard to imagine that it will be very challenging next summer,” McConnell said.
