AEC: Heatwave highlights need for policy

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The Australian Energy Council (AEC) says the recent heatwave conditions and effect the weather event had on the energy grid highlights the need for stabilising policy in the energy market.

The AEC’s chief executive Sarah McNamara said that all parts of the energy system are put under stress during extended periods of high temperatures.

“This is probably the biggest test we’ve had since Hazelwood and Northern power stations closed, and it highlights the fact we could use more reliable supply in the market,” she said.

“A significant amount of preparation went into planning for this summer.

“Generators and the market operator should be congratulated for doing everything they can to avoid power blackouts.”

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Ms McNamara said record temperatures in South Australia followed by heatwave conditions in Victoria stretched the system to its limits and required AEMO to step in to maintain electricity supply.

However, she added that the situation could have been avoided.

“The fact is that, without a national climate and energy policy, such as the National Energy Guarantee [NEG], would-be investors can’t make investment decisions to build replacement generation,” she said.

“We need a guiding policy to provide that investor confidence, so we can ensure that we have enough generation ready to go when it’s most needed. The NEG remains the best option for this purpose and a viable way forward.”

The Australian Industry Group made similar comments, with Ai Group chief executive Innes Willox saying the recent blackouts demonstrate how fragile our energy system how become, and how the national energy grid is struggling to meet demand.

“[It is important]… to end political blame shifting and settle on long-term national policies to underpin energy reliability and affordability while the nation grows and emissions decline,” he said.

“Australia is not a third world country but after many years of sweating increasingly decrepit old generators and dissuading new investment through policy chaos it is hard not to conclude that parts of our national energy system belong in the third world.

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“As the Australian Energy Market Operator’s forecasts have said, the grid is at a particularly vulnerable point this summer, with supply still tight from major closures including Hazelwood and much planned new supply not yet online. And we’ve seen that some of our existing generators are ageing and increasingly prone to break down. More investment in energy resources – supply and demand side – is clearly needed. However that investment needs to be efficient: much of the cost of our electricity already comes from seeking to sustain supply on a handful of extreme heat days each year.

“One promising area for action is improving energy efficiency among households and businesses, which could do a lot to reduce power stress – and improve comfort and resilience – on future days when the mercury rises.”

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