Heatwave-hit Australia lost 1.6GW of thermal generation in January

The consequent load shedding impacted more than 200,000 Victorian consumers across two hours on 25 January.

Victoria and South Australia experienced record-breaking temperatures on 24 and 25 January, coinciding with the loss of up to 1,600MW of available thermal generation resources, according to an event report published by the Australian Energy Market Operator (AEMO).

The report, which highlights the shedding events that occurred during concurrent heatwaves in South Australia and Victoria in January 2019, noted that despite AEMO activating available Reliability and Emergency Reserve Trader (RERT) resources on both days, load shedding was required to manage system security, notably impacting more than 200,000 Victorian consumers across two hours on 25 January.

AEMO’s analysis found that more than double the amount of Victorian consumers may have been impacted without the activation of RERT, which minimised the amount of customer disruption needed to balance the national electricity system, as it mitigated the risk of loss of supply to South Australian consumers.

The cost of RERT services activated for summer 2018/19 equated to about $7,112.12 (A$10,000)/MWh, which is below the $10,312.58 (A$14,500)/MWh electricity trading market price cap.

“Without activation of the RERT, AEMO estimates a further 1,252 MWh of load would have been required to be shed. Applying the 2019 Value of Customer Reliability of $29, 539.49 (A$41,534) per MWh, the cost of the load shedding avoided by using RERT is estimated at $36.98m (A$52m),” AEMO added.

According to the report, the RERT costs for the 2018/19 year represent an amount per average residential consumer of around $2.28 (A$3.20) in Victoria, and $0.57 (A$0.80) in South Australia, based on standard energy tariffs and usage of a typical energy customer in 2018. Using average commercial and industrial energy usage rates for the 2018 calendar year, the cost of RERT would equate to an annual approximation of $0.56 (A$0.79)/MWh in Victoria and $0.11 (A$0.16)/MWh in South Australia.

AEMO has reportedly commenced planning for the summer ahead, and continues to work closely with the Energy Security Board, fellow Market Bodies, government and industry on important industry reforms.