Liddell unit out for summer after transformer failure injures worker, triggers RERT

AGL Energy says that a worker has been “seriously injured” in an incident at the Liddell power station, caused by an failure with one of the power station’s transformers, and which will cause one of the power station’s four generator units to remain offline for the rest of the summer.

In a statement to the ASX, AGL Energy says that it was working with relevant authorities following the incident, which occurred on Thursday, and that an investigation was underway to determine its cause.

“On Thursday 17 December 2020, there was a transformer incident at Unit 3 of AGL’s Liddell Power Station in New South Wales, as a result of which the unit has been taken out of service,” the AGL statement says.

“A worker at Liddell was seriously injured as a result of the incident and is receiving medical attention. AGL’s priority concern is continuing to ensure he receives the required treatment at this difficult time. An investigation is under way into the cause of the transformer incident, including engagement with the relevant authorities.”

“AGL is currently assessing the length of any outage that may occur at Liddell Unit 3 as a result of the transformer incident. On a precautionary basis, AGL has informed the Australian Energy Market Operator that the length of the outage may be up to two and a half months, subject to the completion of this assessment. AGL notes that this estimate is highly preliminary,” AGL said in its statement.

AGL said that it would was working to determine what impact the outage may have on the operation of the power station, and the financial impact of the outage, and that it would further update the market before 23 December.

The unit could remain offline for the rest of the summer, and will put pressure on an energy market already facing a tight supply-demand balance throughout the warmer months. It effectively removes 420MW of supply for the summer.

Shortly after the Liddell incident, the Australian Energy Market Operator declared an ‘actual Lack Of Reserve Level 2’ event and later called on emergency supplies, activating the Reliability and Emergency Reserve Trader (RERT) mechanism to ensure demand was met.

AEMO’s market alerts indicate the market operator activated contracts under the RERT mechanism, directly purchasing additional supplies of power throughout Thursday afternoon “to maintain the power system in a Reliable operating state.” There was no indication of how much or what technology was called on. There were no reports of load lost.

However, prices in the NSW region of the National Electricity Market spiked immediately after the incident, and later spiked to the market cap of $15,000 per MWh, and staying elevated for most of the afternoon until additional generation could be brought online. Some six different coal units were offline in NSW due to maintenance issues.

The Liddell power station has been operating for almost 50-years and its quickly approaching the end of its operational life. AGL had warned of the risk of damage and injuries if it was forced to keep it online, but the federal government has insisted the ageing generator be kept in service, and even threatened to force its sale if it didn’t.

AGL intends to decommission the power station starting in 2023. The coal-fired power station was originally commissioned in the 1970s with a total rated generation capacity of 2,000MW, spread across four units, but now is limited to providing a maximum of 1,680MW due to the power station’s age.

A spokesperson for AEMO said that the market operator had been kept informed of the outage at the Liddell power station, and that there were no current concerns about the ability for reliable electricity supplies to be maintained over the summer.

“While AGL continues to assess the extent of the outage, AEMO will work through and manage any possible impacts associated with the unit’s outage, as we do for all incidents of this nature,” an AEMO spokesperson said.

“While any unplanned outage elevates risk, despite this event, AEMO’s outlook for reliability over summer is unchanged. AEMO appreciates AGL’s transparency on these matters, and our thoughts and best wishes are with the injured employee.”