Engie fined for being asleep as South Australia tried to avert blackout

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Peaking plant in South Australia fined for not following instructions after network fault that forced BHP’s Olympic Dam to wind down production and narrowly averted wider blackouts.

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A unit of the French owned electricity giant Engie has been fined by the Australian Regulator for failing to respond to market directions as the grid operator battled to keep the lights on in South Australia following a major network fault.

The incident occurred more than 18 months ago – in the early morning of December 1, 2016  – causing supply interruptions to Alcoa’s aluminium smelter in Victoria, forcing BHP’s Olympic Dam mine in South Australia to drastically reduce its load, and the state to narrowly avoid wider outages.

The incident, which came shortly after the “system black” event in late September, was used by big energy users and the Coalition government to depend its criticism of the state’s renewable energy commitment and deepens the political divide over energy.

But the event on December 1 had nothing to do with renewables.

Like nearly all power outages, it was the result of network problems – on this occasion a scheduled maintenance on one line that was compounded by an unanticipated equipment failure on another line that left the South Australia grid operating as an “island.”

In these events, the Australian Energy Market Operator, battling to deal with supply and demand and swings in frequency, and trying to keep the network in a secure state, it needs the generators to do what they are told to do.

But in the case of Engie’s Dry Creek power station, a 156MW “peaking” plant in the northern suburbs of Adelaide that is usually called upon to react quickly at times of peak demand, short supply or other events, that didn’t happen.

Its operators failed to follow repeated directions over a four hour period and the company has been fined a total of $60,000 for its failure to respond to those directions on more than 30 different trading intervals.

Engie has also signed an enforceable undertaking that promises its facilities will be manned, or if they are not, that someone has access to its systems at home so it can respond to directions.

The AER report details how Engie was repeatedly directed to operate in a certain manner to ensure the stability of the system, and constantly failed to respond.

Between the hours of 12.40am – soon after the network fault – and 5am, Engie’s output constantly differed from what had been instructed by AEMO, sometimes significantly above what AEMO wanted and needed for system security, and sometimes significantly below.

The AER says normal arrangements – which usually sees an Engie trader working from home and calling on a third party if needed – did not work. A remote control facility also failed.

It is not clear how much of an impact this failure to respond had on the system – for much of this time, prices soared to the market cap before falling again as generators, including Dry Creek, sought to maximise their revenues.

But the price averaged over $5,000/MWh for much of this period, instead of its forecast four hours perviously of $60-$80/MWh, even after BHP was instructed to reduce its load by 70MW down to 100MW.

BHP later claimed, and it was widely reported, that that its Olympic Dam facility was completely blacked out. But as only RenewEconomy noted at this time, it was not true.

Nevertheless, BHP used the incident to launch another attack against renewables, a theme eagerly embraced by the Coalition government.

Engie has promised to have its night-time traders have a computer available at home as well as its laptop, and to respond to text messages and emails from AEMO that direct them to do something.

Dry Creek is operated by Synergen, which is 72% owned by Engie and 28% by Mitsui.

 

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20 Comments
  1. MaxG 9 months ago

    I reckon the $60 fine should read $6,000… but even so, this is not a fine, it is a joke.

    • john 9 months ago

      I totally agree Max.
      It is like getting a $10 fine for parking all day when it costs $1 an hour for 8 hours.

    • Joe 9 months ago

      Fines need to be replaced with Jail Time…that will sharpen them up in future.

      • rob 9 months ago

        indeed indeed joe

    • PLDD 9 months ago

      I think the article has been corrected to $60K. But even that seems low surely it should be equal to at least the extra cost for power during that period plus any losses incurred by customers like BHP.

  2. Pete 9 months ago

    Enforceable undertaking…hahahahaha! Has the AER learnt nothing from the banking royal commission? Like the banks, the fines need to be proportionate to the impact on consumers. How much did their behaviour cost us?

    • mick 9 months ago

      id argue they cost us a change in govt

  3. Richie 9 months ago

    I am disgusted at the paltry fine imposed on Engie (if indeed it is only $60k – should have 3 extra zeros added). Such a fine is not even a slap on the wrist. It is a pat on the back that says keep up the good work and you surely made money anyway. I would be interested in a social and industrial cost calculation.
    What gets my goat even more is the incessant bagging of Jay Weatherill’s government by the lying @holes in Canberra every time the word renewables is included in a question in parliament. I am so over it.

  4. Rod 9 months ago

    In my day, Dry Creek was only ever used (remotely) as a last resort. It is 3 x old open cycle gas turbines and I can’t recall the efficiency but it was said you might as well blow $50 notes up the stacks.
    Maybe AEMO needs to take over control of these smaller peaking plant.

    • Ian Smith 9 months ago

      Are they old GE turbines? 52MW would be on a nice cool day. Hot days you’d expect just under 40 MW. Efficiency of 30-32% (LHV) is not unreasonable for peak, with down to 27% in hot weather.

      • Rod 9 months ago

        I must admit I don’t know the make/modelage. For a short while I was doing generation stats for TIPS and Dry Creek. The best TIPS units (thermal) were lucky to make 30% efficiency. I can’t imagine Dry Creek getting anywhere near that and yes, it was usually only run during Summer heatwaves

    • Tom 9 months ago

      40 year old industrial turbines, not a huge surprise they don’t take orders via internet.
      What’s the design life for a frame 6 or similar anyway?

      • Ian Smith 9 months ago

        Frame 5s still firing at Moomba. There are frame 3s still running in the US after 50 years. Depends on the care taken.

      • Paul Surguy 9 months ago

        Love your comment

      • Rod 9 months ago

        Most OC unit lifespans would depend on the number of starts and running hours. These units would be lucky to start twice a year for three hours at a time.
        It is an unmanned station. The proposed requirement for it to be permanently manned sounds ludicrous.

  5. Tom 9 months ago

    They turned on and off a bit late and ran flat load instead of some ramping AEMO wanted. They still helped as well as the old thing could.
    Plus $1.7m in 6 hours goes alright! Bet they don’t give crap about $60k.

  6. heinbloed 9 months ago

    I wonder if owners of atom power plants can be fined for putting power supply at risk … but realisticly I’m dreaming 😉

    https://www.bloomberg.com/news/articles/2018-07-19/finland-braces-for-power-shortage-as-reactors-fail-amid-heatwave

    Isn’t it Engie running the atom crackers in Belgium?

  7. Gregory J. OLSEN Esq 9 months ago

    Outrageous behaviour from Engie and even more culpable misuse of fantasy by the
    Feral Coalignition Government! 🙁

  8. Les Johnston 9 months ago

    $60k fine suggests this was a profitable oversight. It is helpful to note that the fine was too small to attract political attention because it was not caused by renewable energy. A helpful insight into regulator critical analysis.

  9. Phil 9 months ago

    The fines are so small as to make it worthwhile to do same again

    It’s good in a way as this kind of behaviour must push microgrids and batteries and even off grids ahead in leaps and bounds as the networks become yet more unaffordable as well a unreliable. Possibly even dysfunctional looking at the regulators track record.

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