“Riddled with breakdowns:” Why intermittent coal power is a major threat to grid reliability

A new report has highlighted the shocking state of Australia’s ageing coal generation fleet, reporting that unplanned unit break-downs over summer occurred on 128 occasions – eight times more than anticipated by the Australian Energy Market Operator.

The report by Reliability Watch – an initiative of three major environmental groups – found that, on average, a “staggering” 5.1 gigawatts (GW) of coal fired power capacity was offline at any one time across NSW, Queensland and Victoria from October to March .

That is the equivalent of powering 1.2 million homes, and amounts to one quarter of rated capacity in summer when electricity demand is highest. The analysis also found a strong correlation between coal breakdowns and high wholesale prices.

The findings will not be a surprise to anyone. AEMO has previously highlighted the fact that breakdowns from ageing coal fired generators were the biggest risk to energy reliability in Australia’s main grid.

It, and most of the major coal fired generator owners, say that Australia must move beyond the age of “baseload” concepts that dominate the Australian political debate, and switch to wind, solar, storage and other dispatchable capacity.

Some in the industry describe it as a switch from “intermittent” coal to “variable” renewables, a wry twist on the popular accusation that wind and solar are intermitter.

The reality is, however, that wind and solar output is variable, but predictable. What the market operator does not like and finds hard to manage is large generator suddenly going offline without warning, often because of some technical fault.

The predictability is crucial. Unplanned intermittency from coal units is the major problem. Battery storage – which has expanded significantly with the growth of wind and solar – has demonstrated its ability to be a reliable “shock absorber” for the grid, and load flexibility can provide a similar service.

“This report clearly shows how Australia’s ageing coal power fleet suffers frequent breakdowns and consistently fails to provide the energy the community needs during the peak summer period,” says Dave Copeman, the director of the Queensland Conservation Council, one of three groups behind the Reliability Watch initiative.

He also pointed to the growing issue of market dominance, and the fact that wholesale prices usually jump when coal fired power stations break down, because the big players are able to take advantage of the scarcity of supply.

This practice has been well documented in reports on high priced events by the Australian Energy Regulator, which notes that while legal, it has a significant impact on consumers.

“When coal breaks down unexpectedly, it drives up the wholesale cost of power and can risk our power supply,” Copeman says.

“Australia’s ageing coal power stations are breaking down nearly every day. Any responsible government can see that we have to urgently build more renewable energy backed by storage to keep the lights on and keep power prices under control.”

The federal Labor government is committed to a target of 82 per cent renewables by 2030, based largely around modelling from AEMO’s Integrated System Plan which forecasts most, if not all, of Australia’s coal fired power generators will need to retire by around 2035.

However, than plan has faced pushback from Coalition and conservative forces. The newly elected Queensland LNP government, for  instance, is spending billions on extending the life of its state-owned coal generators and has imposed new rules that make it harder for wind and solar projects to gain approval.

This week, the new leader of the federal Opposition, Sussan Ley, flanked by her Queensland LNP deputy Ted O’Brien, the architect of the Coalition’s nuclear power plan, insisted that Australia needed to focus on baseload power sources for low prices and grid reliability.

All the evidence says otherwise. The Reliability Watch notes that Queensland coal generators were the most unreliable, breaking down 78 times over the summer period, including a dramatic new “explosion” at the troubled Callide coal hub.

“It’s alarming that the State Government is talking about throwing billions in taxpayer dollars to keep Queenslanders reliant on our failing coal power stations,” Copeman says.

“The Crisafulli Government shamelessly announced they are looking at keeping Callide B coal station open past its retirement less than a week after an explosion at neighbouring Callide C. 

“Our analysis shows that the explosion at Callide was not an isolated incident, and in fact, the entire coal fleet is plagued by issues and it’s Queenslanders that ultimately have to pay the cost through higher power bills.”

The other groups behind the Reliability Watch report are the Nature Conservation Council of NSW, and Environment Victoria.

The NCC’s CEO Jacqui Mumford noted that 35 per cent of the NSW coal fleet was offline in November, when the state had the highest wholesale prices in the main grid.

“It’s clear that our coal fired power stations are not up to the job of keeping our electricity supply secure during summer,” she said in a statement.

“At the beginning of October, the coal power operators told the market that only 17% of the coal capacity would be offline for maintenance in November. The actual capacity that broke down was more than double this forecast.”

Environment Victoria climate campaign manager Joy Toose noted that there was an average 23 per cent shortfall between claimed capacity and actual generation, and pointed to issues at Yallourn, which is schedule to close in 2028.

“Yallourn unit 4 was clearly really struggling, with three breakdowns in seven weeks before its scheduled maintenance then the maintenance took nearly 20 days more than scheduled,” she said.

To underline the issue of “intermittency”, the report notes that the number of unplanned breakdowns over the last summer translates into an average of 8.5 breakdowns at each power station in just six months, and 0.7 breakdowns per day.

It says there were 21 coal fired power units that were offline for more than 1,000 hours over the summer period, and many also required a longer maintenance period than forecast

AEMO, in its market reports, has already noted a “north-south” divide in wholesale electricity prices, where NSW and Queensland – the two most heavily dependent on coal – have significantly higher prices than the south, where renewables have a greater share.

“Throughout the summer period, there was a strong correlation between coal being offline and high prices,” the Reliability Watch report says.

“In Queensland, when more than 30% of coal capacity was offline, energy prices were on average double compared to when less than 10% of coal was offline. In NSW, this differential was almost three times.”

The report says that more renewable energy, backed by storage, is needed to bring prices down – although some in the industry note that new batteries are being used by the same players to retain market control.

“Batteries were more reliable than coal in November in NSW, and there is a strong correlation between high
renewable energy generation and lower prices. It is clear that our coal fired power stations are no longer up to the to the task of keeping our lights reliably on and need to be replaced with modern alternatives.”

This report is consistent with previous findings, including one notable one from Baringa, which noted that 60 per cent of coal capacity on Australia’s main grid is more than 40 years old, and that availability after that preiod declines from 81 per cent to just 65 per cent.

“Over the past four years, coal power has been significantly less available during periods of increased power outage risk than under typical conditions,” the Baringa report – released in January this year – noted.

“During periods with the greatest power outage risk (LOR 3), coal availability has been 10-20% lower than typical periods. The majority of recent power outage risk conditions have occurred in NSW & Queensland, the states most dependent on coal generators.

It said during summer (November to March), hot weather and unplanned coal outages are key drivers of power outage risk, and four of the most severe price spikes in the past seven years were driven by unplanned coal outages.

“Batteries have already taken over from coal as the primary source of ‘frequency services’: a rapid injection or reduction of electricity into the grid to balance supply and demand,” it noted.