Biggest joke about NEG? It addresses just minutes of outages

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(Note: This story has been updated. See explanation below).

A damning new report from Australia’s Climate Council has suggested that the Energy Security Board has completely misdiagnosed problems at the heart of Australia’s electricity grid, and the proposed National Energy Guarantee will address issues that cause just minutes of outages a year.

Australia has the highest reliability requirement in the western world – 99.998 per cent from generation and transmission lines –  but the overwhelming majority of the outages experienced by customers (98.15 per cent) are caused by failures in distributed networks, which are not addressed by the NEG.

Issues that are addressed by the NEG – the available of sufficient supply – account for just 0.24 per cent of outages; probably the equivalent of a minute or two of lost power per customer per year, according to the Climate Council.

Figure 8: Sources of supply interruptions in the NEM

The NEG has been roundly criticised by both the industry and activists for failing to address climate targets (although that bit is the fault of the government), and for proposing an unnecessarily complex and potentially expensive “reliability” guarantee.

There is growing disquiet that the NEG’s reliability guarantee, which remains poorly defined, is politically motivated; and that its focus on retailers and the use of contracts risks giving yet more market control to the handful of incumbents that already dominate the industry.

There is a fear – expressed at the recent ESB open forum – that the NEG will “gold-plate” generation in the same that networks “gold-plated their infrastructure in pursuit of Australia’s high reliability levels. Most believe this is over-kill.

Submissions to the ESB – before it presents a “high-level” idea of the NEG to state ministers next month – were due on Thursday.

The Smart Energy Council was dismissive, while consultancy Energetics, in a blog, described the environmental part as “pointless” and the reliability component as likely to favour incumbents.

A group of smaller retailers have written a joint letter than reportedly comes to a similar conclusion as the Climate Council: Namely that there is currently no forecast reliability gap and that “technology is likely to make today’s issues moot within five years.”

The best hope among many is that the ESB will recognise that reliability needs only a “light touch” – if any. The new report from the Climate Council, written by analysts including energy industry veteran Andrew Stock, suggests the reliability concern is completely misplaced.

“The design of the NEG’s reliability component is based on a series of false premises,” the report says.

“The vast majority – 98 per cent – of all interruptions to power supply are caused by events affecting distribution or transmission lines, not due to lack of sufficient generation from power plants.”

It says that in the National Electricity Market, electricity supply from generation and transmission is required to meet customers’ needs at least 99.998% of the time.

“Consumers do not experience this reliability, however, because of failures in the transmission and distribution systems that deliver the power to their homes and businesses, and system security issues.

“Virtually all outages customers experience have nothing to do with reliability in the context of electricity supply (from power stations) – the matter the NEG proposes to address.”

When the supply related outages do occur, they are commonly caused by the unreliability of ageing, inefficient coal and gas plants.

The Climate Council says the NEG’s proposed reliability measure not only ignores the fundamental problem facing supply – the unreliability of ageing, inefficient coal and gas power stations and the need to plan for their replacement – but it may lead to greater reliance on these antiquated power stations.

Consider, for instance, the federal government’s push for AGL to keep open its ageing Liddell generator in the Hunter Valley, despite a study that shows it would be more expensive and less reliable than renewable and storage alternatives.

To underline that vulnerability, two big coal units in Victoria – the Loy Yang A and Loy Yang B brown coal generators in Victoria – tripped simultaneously on Thursday morning, removing 1,065MW of supply in an instant.

Oops ….

Double oops ….

It was the 43rd and 44th trip of a coal plant since the start of summer – read more here of this “pas-de-deux”, including Tesla big battery response – and confirms the AEMO assessment that the greater threat to grid security is the loss of a major fossil fuel generator: coal or gas.

The Climate Council noted reliability can be achieved through a range of approaches, such as building new flexible, dispatchable power plants; demand management (where electricity users adjust their demand for electricity); and adding energy storage (storing excess energy for use later).

Many of these are already taking place, particularly in South Australia, with the highest share of wind and solar (50 per cent), and which already has the Tesla big battery and numerous other battery, pumped hydro, solar thermal and hydrogen storage projects.

The Climate Council report notes that under current federal government policies – modelled under the NEG – renewable energy would barely grow over the decade from 2020 to 2030, reaching perhaps 36 per cent by the end of the decade.

It says the share of renewable energy should be twice that – and at least 50 per cent. “Australia must achieve a minimum of 50 – 70 per cent renewable energy across Australia by 2030,” it says.

As it is, the only state guaranteed of doing that is South Australia – already at 50 per cent and with the Labor government proposing a 75 per cent target by 2025 (and a 25 per cent renewable storage target) should it be re-elected. Even AEMO sees the share reaching 73 per cent by 2020/21

“A credible reliable climate and energy policy needs to encourage investment in new clean power supply – when and where needed – well in advance of coal closures, and not place reliability in the hands of ageing coal and gas generators,” the Climate Council says.

“(The NEG) won’t reduce greenhouse gas pollution from Australia’s electricity sector. Nor will it make electricity supply more reliable,” the Climate Council says. “But, it will add a layer of red tape and complication to an electricity market already soaked in complexity.”

It argues that Australia’s clean energy and storage sector is booming thanks to the backing of the 2020 Renewable Energy Target along with targets and policies from state and territory governments. But the NEG risks bringing this to a halt.

The Smart Energy Council said the NEG, as proposed, would curtail investment in renewable energy; fail to tackle climate change; decrease competition in the electricity market; and increase costs for all consumers.

It also accused the Coalition government of a “breach of faith”  having been unleashed “via an expensive advertising campaign” promoting the NEG even while the initial consultation process is still underway.

“The advertising campaign proves that the National Energy Guarantee is a political solution to a political problem,” the Smart Energy Council says.

“It is an attempt by the Turnbull Government to appear to be doing something about energy security and affordability. It is a delaying tactic while actively obstructing the path to a cleaner, more reliable and cheaper energy system.”

We’ll have more on that advertising campaign on Friday.

Note: This story has been updated to reflect a reassessment by the Climate Council of the assumed loss of  power. This follows clarification of the “reliability” rule of 99.998 per cent, which applies to generation and transmission only. As the original and updated story points out, most of the power lost is due to faults in the distribution network. The Climate Council says that the premise of their assessment – that the NEG “misses the point” holds, only that the lost time it is addressing is a matter of minutes rather than seconds.


  • MaxG

    Appreciate the effort… but ideas from neoliberals, climate deniers and flat earthers are just that: useless!

    • Cooma Doug

      Hey max
      Check out that link I sent in previous comment.

      • MaxG

        Good one; much appreciated; have seen this guy elsewhere; agree with most… however, it will be to late for the people when they realise that the Internet has taken over by the commercials (net neutrality is one vote short of being abandoned at present. Even if it stopped a second time, given the small marking it will succeed the third time. Anyway…

    • daw

      And you forgot to add all the useless blather that is spruiked here.

  • drescaped

    This is what will lose the coalition the next Federal election.

    • Hettie

      That, and treating the poor as a cash cow to be milked by the rich.

  • Joe

    The COALition just can’t help themselves. The words ‘Renewable Energy’ sends them into in a lather everytime. They just don’t want anything to do with RE and so ‘The NEG’ is dreamed up as COALition energy policy. And there was the Joshie at the AFR Business Summit complaining that AGL is not replacing the old girl Liddell with… ‘like for like’ power. For The COALition backed by their mates the MCA and Rupert it is FF forever.The sooner the COALition is voted out the sooner Australia gets cracking on proper energy and emissions policy to address the ‘climate emergency’.

    • Cooma Doug

      One thing that is becoming clear. There are third world countries who will march past us in this race. While our pollies are telling Ray Hadley that coal is great for the poor, India and many nations who have yet to totally fall into the big base load mess, will march straight into the modern RE revolution.

    • Ken Dyer

      I really think that we are seeing the death of the present LNP COALition, one of the ugliest political beasts known since Federation.
      Every time there is a new poll, the beast goes into throes of of disgusting behaviour – witness the Joyce affair, and the Cash accusations.
      Australia has made up its mind – Labor will form government at the next election with a substantial majority. No wonder the media is asking Bill Shorten for leadership about the Adani abortion, the Federal COALition gave up any credence on that issue a long time ago.

    • david_fta

      It’s been this way ever since the National Party sold their souls to the Order of the Eastern Star to create Eastern Star Gas (later sold at huge profit to Santos), and Malcolm then sold out his granchildrens’ future to be the the COALition’s figurehead.

      Mind you, if If I were Satan, then I’d send my emissary, my anti-Christ, to earth to preach climate change Denialism. This would exploit human capacities for greed and ignorance to overcome the human capacity for reason, thereby ensuring large-scale misery, despair and death. This emissary would utilise the exclusionary closed-mindedness of conservative Christians to propagate his pernicious doctrine.

      If I were Satan, I’d dress my emissary as a Cardinal of the Roman church. He’d couch his language in Christian terms, adding exquisite insult to God and to all that is good – followed by his acolytes, tripping over their Clownshoes.

      • Ken Fabian

        What? You saying the essence of dead stuff from the far past, leftover from making the world just right for the Rise of Man, dug from the deep bowels of the Earth, can give wealth and power beyond all imagination – and power great engines of war for smiting enemies? But – at the cost of a hundred fold the heat from it’s burning added to the world and making it more hellish?

        >>Hang on a sec Mr Loo Seafer, what was that bit you said about…
        >Adding heat to the world? Every navvy with every shovel in the world couldn’t dig up and burn enough coal so you would notice any change. >>No, not that! That other bit, about wealth and power and great engines of war
        >Let me tell you about that – and engines for replacing those navvies too and dig it up a hundred, nay a thousand times faster

        • david_fta

          The National Party is real enough, as is Freemasonry …

          … but so too are the physical properties of gas molecules.

          It’s a shame the Mason branches of north-east NSW, and their political wing the National Party, would rather believe – as do Cardinal Pell and Clownshoes – in imaginary figments like some Great Designer and Great Demolisher (aka Satan) rather than the already demonstrated physical properties of gas molecules.

          • Alastair Leith

            So what’s with the continued support for NP and their morally bankrupt MPs — and financially and IOY cashed up MPs — amongst farming communities?

          • MaxG

            Has me puzzled too. I live rural now, and am surprised about the hardcore support for the LNP. Free trade is what’s killing them and the idiots vote for them… I do not get it… yes, turkeys voting for thanksgiving.

          • david_fta

            At a guess, a lot of them are Irish Catholic, so they’d have grown up singing that dirge “Faith of My Fathers”?

          • david_fta

            By coincidence, just after suggesting Irish Catholicism – the sort of Catholicism that says suffering your priest’s depredations is Good For You – I found an article on The Guardian website: “Brendan Farrell: ‘If we don’t support farmers, in 10 years we’ll be importing 100% of our food'” about some bloke who’s trying to help farmers.

            Well, the farmers could help Australia by ceasing to vote National – they don’t have to start voting ALP or Lieberal either, just not National.

  • Cooma Doug

    If you have time folks, have a listen to this talk. Amazing insight and digs deep into our situation.

    • Joe

      SBS TV actually screened this a few days ago. A real mind opening talk that Jeremy Rifkin gave. It is a worthwhile watch by all.

      • Cooma Doug

        It is such a great dig into the realities of where we are and where we must go. His talk takes me back to the days when computers at work were sitting next to the big old black phone. We started to walk about work talking in DOS acronyms, confusing the old guys and boasting kilo bytes.

        Now its my old retired mates talking RE stuff at the beach coffee shops and confusing the traumatised coal miners and LNP red necks.

        • Joe

          Evolution of sorts at work all the time, yes.

    • rob

      took me 2 hours to watch while cooking dinner……great video ……thanks

      • Cooma Doug

        I must say that Giles is in the same place and most of his assumptions fall into the ballpark of that presentation (industrial revolution) I have been thinking much of what is said and we have to be brave to say such things when surrounded by red necks.
        Just this morning I got an email from an anti wind nutter. He abused me and unloaded a heap of ridicule I found very amusing. He doesnt realise I actually know him. I thanked him very much for his helpful advice and said I hope his low frequency sound illness doesnt make him completely crazy.

    • solarguy

      Thanks Doug, I loved every second of this enlightening video.

    • Alastair Leith

      VICE media quoting Walter Benjamin, the (third) revolution is underway!

  • Hettie

    I giggled helplessly reading this article. All that waffle, obfuscation and blether for 2 seconds a year.

    • solarguy

      You giggled, I cried out in my best Scottish accent…………..awww for fox sake.

      And what do you think about those government ad’s, saying how their going big on solar ………………..doesn’t that just warm cockles of ya heart…………I can’t wait for the next election.

    • Ken Dyer


  • Raif Sarcich

    Hi. There’s an important error in your introduction which affects the premises your article. The NEM reliability standard does not count towards it any outages caused by energy networks with the exception of inter-regional interconnectors. So, energy network caused outages don’t contribute to the “11 minutes” to a major extent. The actual unserved energy experienced by customers is much higher than 0.002% thanks to distribution outages, but the NEG in addressing generation adequacy is addressing the potential for the 0.002% standard for generator/interconnector caused outages to be breached. In this sense it is addressing the potential for this unserved energy to be “11 minutes or more” in some future scenario. I hope this is of assistance.

    • Pedro

      Are you saying that power outages caused by power transmission failures like powerlines falling over does not count towards the NEM reliability requirement of 99.998%?

      • Mick

        If it’s system security event, it doesn’t count towards the 99.998% figure. And any thing that happens in the low voltage network (e.g. the poles and wires out side your house, transformers, zone substantions etc) certainly doesn’t count.

      • Raif Sarcich

        If the powerline were an inter-regional connector it might count,
        otherwise no. The NEM reliability standard’s purpose is to measure the
        performance of the market for energy in delivering energy. The
        of networks in delivering network services is measured separately, and
        subject to rewards and penalties set by the regulator.

    • Mick

      Yes, looks like there has been a misinterpretation of the reliability standard somewhere along the way.

    • Graeme Harrison

      I’m an Elec Eng and read your comment twice before deciding to answer your question “I hope this is of assistance”. While a complex issue, your comment would need a lot of editing to add clarity.

      But I understand the gist of it. I thought the “load shedding due to frequency” should have been added to the 0.2%, as the frequency starts to slow when the load exceeds generator capacity, so it too is a form of ‘insufficient generation reliability”.

      BUT, in such discussions, let’s be clear that the NEG is overwhelmingly designed to STOP FURTHER ASSISTANCE to renewables. The most fundamental flaw in the NEG design is assuming that transport and other non-grid uses of fossil fuels will be switching away from FF as fast as the electricity grid. This is the assumption underpinning the NEG idea of stopping all renewables incentives at 28%. The reality is that vehicle electrification will take 1-2 decades longer than the change to renewables! So the NEG is just an anti-renewables tool of the IPA/MCA/ACA pushing their coal-at-any-cost agenda.

    • Mike Westerman

      Raif – you are correct in saying that the NEG is aimed at the NEM interruptions which don’t including the T&D system interruptions generally. But that makes the current design of the NEG even more ridiculous. Customers are entirely disinterested in who is causing the interruptions – they merely want it fixed. And fixed cost effectively. This is a negligible chance that the NEG applied to retailers and aimed at some vague notion of dispatchability will in any way improve the final result to customers. As the established adage dictates: apportion risk to the party best able to manage it. Retailers have no ability to control either generation or T&D risk, they are merely financial traders. The NEM reliability standards apply to generators and so they should. But a market needs to be established based on risks and rewards for being available when required to support demand or penalties for not being able to do so, spread across the network. The carbon tax was efficient and effective in this regard, and so too could a security/reliability tax be, with revenue distributed to encourage investment in both emissions and reliability improvements.

    • Cooma Doug

      As a grid controller at the wheel in major outage events over many years I must mention here in light of all said.
      We might be able to say only 1% or just a couple of seconds. That doesnt mean much.
      The problem is that these events are at times when the major concern is a system black. We might resolve a blackout with a bit of load shedding or rapid response this and that. But the point is the defense against a system black which will lead to extreme kaos and loss of lives is the main focus.

      So the point of this discussion should focus on the overwhelming issue.
      The reason we have dangerous system black risk at times is due to the large base load generator reliability, especially coal.

      The more storage RE and load side technology made available the more this problem goes away.
      Let me assure you. If an AEMO controller comes to work the first thing he looks at on the control display is Liddel PS hoping it shows a zero output.

      The weather forecast for sun and wind a less urgent search.

  • john

    I would venture to say that once SA gets it’s act together and has enough PHES and battery for looking after the frequency issue that they will have 100% reliability.
    Especially once they get all those household battery powered solar connected to the net working why can this not deliver a very reliable for those areas mind we need more to deliver a whole of state solution.

    • daw

      You are so right when you say ‘…once SA gets it’s act together…’ But goodness knows when that will be.
      If you read the article attributing the vast majority of outage time to the distribution networks all the carrying on about Battery storage and RE won’t fix that.
      It is largely due to adverse events – storms, wind, cars hitting power poles,large trees growing too close to power lines etc, etc. the list is longer than a monkey’s arms.

  • Mark Fowler

    I think they left a letter out of the NEG – should be NREG = No (Renewable) Energy Generation.

  • Alan S

    ‘Unreliability’ is the latest slur on renewable energy by its critics however they can never explain what can’t be relied upon. This article might give the likes of Bernardi some clues – if only he could understand it..