With our brave Captain Tony on the “Team Australia” tinny carrying on the Quixotic quest today – tilting at windmills because of their poor visual amenity (see note below), accompanied by the customary squawking from the gaggle of onlookers on social media, I would have easily missed the somewhat more significant announcement made today in the energy space – except for the eagle eyes of two journalists, both:
(a) Angela MacDonald-Smith in the FinReview
(b) Matt Chambers in the Australian
Matt’s tweet references this article here from Meredith Booth. In this article, Alinta CEO Jeff Dimery is quoted as saying the closure of Northern Power Station (and associated mine) could happen “as early as April next year”, with a hard use-by date of March 2018.
Any links to the current outage at Northern Power Station?
Coincident with this (surprise, but understandable) announcement, we’ve been watching the machinations in the South Australian region with a deal of interest this week following the unfortunate power station fire at the Northern Power Station – we posted this NEM-Watch snapshot earlier on Twitter:
I’d posted these quick comments on Tuesday evening, following the first day of volatility South Australia saw as demand rose following the public holiday Monday. We noted that Giles had earlier provided his own views on the outage, and what it meant in terms of the renewable energy drive.
Given the two events (the fire/outage, and the closure announcement) happen within the same time-frame, I would not be the only person to wonder if there is a linkage – though I can hardly imagine a company like Alinta making a decision like this on a spare of the moment…. (including with an organised visit to site to break the news)
The NEM-Watch snapshot above highlights the 2 attempts that Northern has made to come back online. The first attempt ended around midnight this morning, which means bids are currently available for that period, whilst the second attempt was only today (so no bids public yet).
A quick look above at the rebid reasons in ez2view for yesterday’s attempt shows what could be expected at a station trying to come back online after coal stockpile fire, with associated problems.
I had posted earlier about the “clapped out car” analogy to the struggling power sector. Whilst we can’t be sure of the extent (if any) the closure decision for Northern is related to unsustainable maintenance costs at the station, it is likely to be an area of increased interest to a number of stakeholders in the months and years, moving forwards…
Looking backwards, over the longer term
To provide some context to the “slide into oblivion” that is the Northern Power Station, I powered up NEM-Review to draw the following longer-term trend:
(click on the image for a better view)
In particular note that the early part of 2015 has seen lower production volumes than in the decade 2000-2010, but (importantly) that the spot revenues were not reduced by the same percentage (i.e. the reduced output at the station coincided with – and probably contributed to – an increase in the per MWh revenue earned in the spot market compared to that which would have otherwise been earned).
Hence, unless I am missing something, it does seem that the tactic (of reducing output in response to a supply glut in the market) did help to increase revenue per unit of production – but that this was not enough to save the station, given the capital costs involved and the bleak outlook for the sector given the ongoing trend in declining demand (such as noted here for South Australia over summer 2014-15) and the recently secured continuance of the RET, albeit towards a reduced target.
PS – What’s all this about Visual Amenity in the energy sector?
I can’t believe this is what’s being talked about, by our leaders – and the followers (oops, me included now). Can anyone honestly point to much, at all, in the energy sector that is actually visually appealing?
1) Centralised thermal power stations and associated infrastructure (whatever the fuel) – including the recently completed large-scale Nyngan power station;
2) Long lengths of power transmission lines, or above-ground* distribution through suburbs (* because it’s too expensive to underground them)
3) Wind farms on “scenic” ridges
4) Solar panels slapped any-which-way on rooftops in character suburbs as a result of overly generous “get in quick” feed-in-tariffs of yesteryear, and the accompanying less-than-honest sales tactics employed by some companies I saw & heard at the time.
Perhaps the Snowy Mountains Scheme could be called “attractive” (keeping in the mind that attractiveness is always in the eyes of the person looking through them). But reality is that there’s no other place we can build such a thing, over again – and it certainly would not earn a premium in the market for being “a good looker”.
The majority of energy infrastructure is ugly – get over it. Whatever the technology, it’s being deployed to keep the lights on, not to win an Archibald (or whatever the architect’s equivalent prize is).
Is this really the “grown up government” we were promised a couple years ago, or just an ongoing malaise of squabbling kindergarten kids that we have become accustomed to in Federal Parliament over quite a number of years…?