Baseload: 5GW of coal capacity missing before Callide coal explosion

The Australian Energy Regulator has identified nearly 5 gigawatts of coal fired capacity in Queensland and NSW that was missing in action just before the devastating Callide coal plant explosion in May.

An AER report into the sharp price jumps above $5,000/MWh after the explosion, which blacked out more than half a million customers for several hours and has sent prices soaring ever since, shows that 4.82GW of coal capacity was offline when the Callide coal generator exploded.

About 3.3GW of that coal capacity was offline due to planned maintenance at various operations, but another 1.5GW of coal capacity was offline due to unplanned outages, including “tube leaks” at Bayswater in NSW and Kogan Creek in Queensland.

A unit at the Gladstone coal generator in Queensland had failed to return to service after maintenance several weeks earlier. Another 185MW of gas capacity was missing because of problems identified at the Smithfield generator in NSW a fortnight earlier.

The situation in Queensland was worsened because the Callide explosion took out another 2.5GW of  coal capacity at Callide itself, and from Stanwell, Gladstone and Yarwun (gas), which were affected by line outages caused by the explosion. (See graph below).

The AER report then notes that the Australian Energy Market Operator, reduced solar and wind output by around 160MW to maintain “system strength” in the state.

That is a move that energy experts have suggested was at partly prompted by the absence of any big battery storage in the state, a situation that the government is now seeking to address as part of its “battery blitz.” It will be interesting to see what AEMO’s final incident report says of this.

What happened on May 25 after the Callide explosion was that prices quickly shot up, with some intervals hitting the market cap of $15,000.

Among those generators bidding to that level on various occasions were Arrow Energy’s  Braemar 2 gas plant, CleanCo’s Wivenhoe pumped hydro storage facility and Origin Energy’s Mt Stuart peaking plant. The high prices also flowed through to the NSW market on occasions.

The situation was also worsened by work on the main transmission line between Queensland and NSW, which reduced the amount of power that could be traded. Several “lack of reserve” notices  were issued and AEMO called on 15MW of Reliability and Emergency Reserve Trader capacity to maintain grid security.

“Rebidding of capacity from low to high prices did not significantly contribute to the price exceeding $5,000/MWh, except for in one dispatch interval in the 4.30 pm trading interval in Queensland,” the AER said.

“We are separately making enquiries around participant behaviour on the day. We will also review AEMO’s final incident report for the Callide C Power Station event once it is completed, to determine whether any further investigation is required by the AER.”