Loy Yang A unit returns, just in time for another blistering heat-wave

AGL Energy says repair works on Loy Yang A have been completed, with the problematic Unit 2 due to return to service on Thursday after a seven month absence – just in time for a major heat wave that will once again test the resilience of the state’s brown coal generators.

The Latrobe Valley coal plant’s second unit broke down on May 18, and was ruled out of action for what AGL estimated at up to seven months due to the difficulties of replacing the stator and rotor components, and the extent of damage caused by the failure.

In July, AGL appointed GE to to make the $57 million repair and upgrade to the unit, and said the expected return to service date remained mid-December 2019, in time for the summer heat. It will take a $100 million hit to the company’s earnings.

In an emailed statement to RenewEconomy on Monday, AGL’s executive general manager of group operations, Doug Jackson, said some “final minor mechanical work” on the unit would be completed Wednesday, with generation set to begin on Thursday then progressively ramp up in load.

“We will continue to work closely with AEMO during the ramping up process to achieve full load from the unit,” Jackson said. “With the warm weather, we have aimed to bring the unit back to service as soon as possible, in a way that is focused on long-term reliability.

“Our teams and the local workforce involved in the repairs have worked incredibly hard to meet our commitment,” he added. “We thank them for their expertise and dedication.”

The return to service comes as the Australian Energy Market Operator warns that coal and gas generators in four different states will be tested this week as temperatures soar beyond the normal reference points.

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This is a particular concern for AEMO, which named the vulnerability of coal generators, and fossil fuel plants in general, to severe heatwaves as one of its major concerns for the “tail-risk” events that it cannot control and which may threaten supplies this summer.

“The Bureau of Meteorology (BoM) is forecasting both warmer than average and extreme temperatures this summer, and an ongoing and significant risk of bushfires with drier than usual conditions,” AEMO chief executive Audrey Zibelman said in a statement accompanying its Summer 2019/20 Readiness Plan.

“These risks add to the deteriorating reliability of some of the older coal generation plants.”

The heatwave begins on Wednesday, a day before the Loy Yang A unit returns, and AEMO has already issued a LOR2 notice for that day, advising that some rarely used peaking generators may be needed. On top of this, AEMO has access to more than 1GW of reserve supplies – both on the supply and demand side – in case the situation moves to a more serious LOR3.

Here’s the list of mind-boggling temperatures AEMO will be working with around Australia this week:

QLD:
On 16/12/2019: Maximum forecast temperature 41 degrees C at Archerfield for the Brisbane area.

NSW:
On 19/12/2019: Maximum forecast temperature 42 degrees C at Bankstown for the Sydney area.

VIC:
On 20/12/2019: Maximum forecast temperature 43 degrees C at Melbourne for the Melbourne area.

SA:
On 18/12/2019: Maximum forecast temperature 43 degrees C at Adelaide for the Adelaide area.
On 19/12/2019: Maximum forecast temperature 43 degrees C at Adelaide for the Adelaide area.
On 20/12/2019: Maximum forecast temperature 45 degrees C at Adelaide for the Adelaide area.

As RenewEconomy reported in June, the broader impact of Loy Yang’s outage might not have been substantial over the past seven months, but threaten to become so if the unit does not get back into service this week, as planned. Or if it runs into trouble again in the heat.

In the summer of 2018/19, multiple breakdowns of Victorian coal generators sent wholesale prices to the maximum level of more than $14,000/MWh, and forced the Australian Energy Market Operator to impose rolling blackouts on up to 200,000 customers on January 25.