AGL and AER reach settlement over wind farm protection settings

Hallet Wind Farm in South Australia (AGL fine)
Hallet Wind Farm in South Australia

AGL Energy and the AER have agreed to a settlement of $3.5 million as a result of using low-voltage protection settings on its Hallett Wind Farm without prior written approval. The terms of the settlement also include a review of AGL’s compliance program and minor changes to AGL’s generator performance standards.

In reaching this settlement, the AER has withdrawn and does not press any allegation that AGL breached its Generator Performance Standards or that the activation of the low voltage protection settings on its Hallett Wind Farm contributed to the South Australian blackout in September 2016. The settlement remains subject to the approval of Justice Besanko and his Honour has reserved judgment.

In action brought before the Federal Court by the Australian Energy Regulator (AER), the court heard that while the failure to obtain approval was inadvertent, the settings applied were insufficient to cope with the disruptions to the network.

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AER’s legal counsel Ruth Higgins SC told the court that at the time of the blackout, the turbines were set to ride through three low-voltage disturbances within a two-minute period. Three months after the blackout the settings were revised with the approval of the Australian Energy Market Operator, allowing turbines to cope with seven low-voltage events in quick succession before reducing power or turning off.

Dr Higgins said these changes would have allowed the turbines to continue to operate despite the disruptions caused at the time of the blackout.

AGL’s counsel said the company conceded its failures in regard to the wind farm settings compromised AEMO’s ability to ensure the resilience of the power grid but denied its systems were a contributing cause of the blackout.

Mr Moore said it also remained unknown as to whether AEMO would have approved its original settings, considering the chance of three under-voltage events caused by three transmission lines being severely affected was “almost an unheard-of possibility”.

“Something, that as far as we are aware, was virtually unknown throughout the world,” he said.

The case against AGL follows settlements reached with operators of wind farms in South Australia that also breached the same regulations ahead of the blackout.

In July, Pacific Hydro was hit with a $1.1 million fine while HWF 1 Pty Ltd was issued a $550,000 fine while in December last year Snowtown Wind Farm Stage 2 Pty Ltd was fined $1 million.

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In court on Friday, Justice Anthony Besanko reserved his judgment in relation to the proposed penalties and orders to be imposed on AGL.

In a statement, AGL said the terms of the proposed settlement included a review of its compliance program and minor changes to its generator performance standards.

“AGL’s wind farms operate in accordance with their design, the generator performance standards and their licensing requirements.

“With South Australia generating more power from wind than any other state, AGL is committed to investing in technologies which firm up capacity in the market and provide reliable and affordable electricity. In 2019, we began generating from our $295 million Barker Inlet Power Station and work is now underway for the $180 million grid-scale battery at Torrens Island.”