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Another big industrial trims demand as Tasmania energy crisis deepens

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Another major industrial user has agreed to “voluntarily” reduce their electricity demand as Tasmania continues to grapple with its biggest ever energy crisis.

Hydro Tasmania on Tuesday announced that paper milling giant Norske Skog has agreed to close one mill and reduce demand by 43MW as the energy authorities work out how to deal with the loss of the Basslink connection to the mainland and the fall in dam levels to their lowest levels ever.

norske skogThe decision by Norske Skog takes total demand cuts from big industrial users to more than 110MW, following similar offers of 32-40MW by the Bell Bay aluminium smelter and 30MW from TEMPCO, the local manganese alloy factory.

Hydro Tasmania is currently rushing in 200MW of diesel generation as a stop gap measure to ensure there is enough supply. It has already switched back on the Tamar Valley gas plant, sending average prices more than four-fold higher to around $180/MWh.

The situation has led many to wonder why the government did not invest more in locally sourced wind energy, or encourage more rooftop solar – both options that would have been substantially cheaper than gas. The diesel generation will cause wholesale electricity prices to double again.

Hydro Tasmania says it is facing operating losses this year as it brings in more expensive generation to allow it to conserve its depleting hydro resources as long as possible. Dam levels are now down to just 16.1 per cent.

It said Norske Skog will voluntarily reduce load at its Boyer Mill for one week, starting from the middle of next week. The reduction will involve the closure of one of the mill’s two paper machines and associated pulp mill. These actions will have no effect on the Boyer workforce.

Andrew Catchpole, the acting CEO of Hydro Tasmania, said in a statement that the generation from gas and “temporary” diesel, along with voluntary load reductions by large consumers, will be “well in excess of the import capacity” of Basslink.

“This will ensure Tasmanian demand can be met, even with a prolonged Basslink outage.”  

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  • Jack Gilding

    Saying that demand reduction, gas and diesel will be “well in excess of the import capacity” of Basslink doesn’t prove we are out of the woods. Basslink was supplying (and can only supply) 500 MW so a bit less than half of average demand. The other 50-60% still has to come from hydro dams and that is getting increasingly difficult given dropping dam levels. It’s going to be a long and expensive road to rebuild dam storages, stop burning diesel, and reduce reliance on expensive gas. In the meantime we will be transporting a million litres of diesel a day by road to feed the generators (Mercury 1 Mar, p.11).

  • Ron Horgan

    Longer term Tasmania could extend the hydro reserve by using spare wind power for pumped storage. It would be a big job to get the water back up the hill.

    • Maurice Oldis

      Too sensible for an oaf like Hodgemen-puppet for fossil fuel interests!!

  • Malcolm Scott

    If only the highly destructive Abbott government had not created the renewable energy investment freeze and ongoing investment uncertainty, and if only it had not in 2014 repealed the Clean Air Act 2011 Hydro Tasmania might not have over used hydro resources for a short term monetary gain, then Tasmania might be in a better situation. By now they could have had 200 wind turbines on King Island providing reliable low cost electricity to both Tassy and the mainland, offering also a redundant BassLink.

    Why in gods name is diesel generation the choice for rapid deployment of new capacity? Cretans! Whomever came up with this idea and approved it should be put up against the wall and figuratively made to ingest diesel engine exhaust product. A highly energised project and campaign of solar pv on home, commercial business, and public building rooftops, accessible for all socioeconomic groups, accelerated by regulation changes, boosted but capped volume FIT, and targeted incentives could have created an avalanche of Tasmanian’s stepping up to co-invest in this highly transformative nation defending (state defending) program. Tasmania has the best electricity storage in Australia to support renewable generation.

    So somehow Tasmanians are serfs again to the fossil fuel industry. The political elite really are bastards.

    • Charles

      Minor technical issue: the King Island wind farm proposal was only going to have a connection to Victoria – not back to Tassie.
      Otherwise, well said!

      • Malcolm Scott

        The King Island wind farm project should be anything we as a nation want it to be to secure a reliable clean energy grid. It’s incredible that we don’t have much wind farm generation in the roaring 40s. We don’t have any pumped hydro in Victoria

        The big political and technical opportunity for Hydro TASMANIA is to change the design to include a fully fault tolerant link between Victoria and Tasmania. Even Liberals could vote for that.

        At critical times traditional infrastructure is failing us. A few years ago Basslink was down when we had peak demand during a series of hot January days. The then Victorian coalition government was blaming anything but the concurrent failures of conventional infrastructure – I also heard it first hand from Simon Ramsay MLC.

        And now Basslink is down again for a long period at a critical time, this time hurting Tasmanians.

        • Brian Tehan

          With a duplicated Basslink and more wind farms, Tasmania could have a new money making industry eventually supplying peak power to Victoria. Where are the power entrepreneurs in Tassie? In the roaring 40s- all that wind in remote areas going to waste.
          Quite a few jobs in it too.

  • Ian

    Yea, it is a scandal of gross mismanagement by clowns from Abbott down.
    I emailed the 7.30 report last week to suggest they do a story on it.
    There are so many better solutions.

  • We’ve grown too accustomed to seeing our NEM-Watch dashboard displaying like the attached image over too many weeks.

    More analysis to be posted at http://www.WattClarity.com.au in another day or two…