• Energy firms gaming system: BlueScope Steel boss
Energy firms gaming system: BlueScope Steel boss
12 Oct, 2017, No Comment

Summary: BlueScope Steel chief executive Paul O’Malley says power prices will rise under a clean energy target if baseload sources such as NSW’s Liddell coal-fired power station close, and that a more urgent 10-year baseload transition plan is needed.....

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Mr O’Malley, whose Port Kembla steelworks is at risk of substantial damage in the event of a power outage, does not think AGL Energy’s plan to replace Liddell with a mix of gas, renewables, storage and demand-shedding offers a reliable alternative.

Speaking after BlueScope’s ­annual general meeting in Melbourne yesterday, Mr O’Malley launched a stinging criticism of the role of energy companies, ­accusing them of gaming the debate over power supply. “We have to stop the gaming that’s going on here and call it as it is,” he said.

Mr O’Malley, who has warned of an energy crunch for years, questioned the role in the debate of power companies that said they could not invest in more capacity without policy certainty.

“Does society and industry exist to guarantee the returns of the energy industry, or is the energy industry an essential service that should be supporting society and industry?

“I’m struggling with the fact that everything we are meant to do is give the energy companies investment certainty — I’m not sure that’s why we’re here.”

AGL Energy plans to close the 2000MW Liddell power plant in 2022, when it is about
50 years old, saying extending the plant would not be economic.

Rather than accede to Malcolm Turnbull’s requests to extend its life or sell to someone who will, AGL chief Andy Vesey has vowed to present a detailed plan to the federal government to replace the ageing plant with renewables, gas storage and demand-shedding.

However, Mr O’Malley said he was unconvinced, noting that when French company Engie closed the 1600MW Hazelwood power station in Victoria this month, the power price jumped 25 per cent.

“There is no technology today that has the capability Hazelwood had for 24 hours a day, seven days a week reliability and security, and there is no capability today to replace Liddell,” he said.

“Industry runs 24/7, hospitals run 24/7. What I’m concerned about is that the system that is developed is going to run 18 hours a day, 6½ days a week.”

Mr O’Malley said prices would stay high if Liddell were not extended or replaced by equivalent baseload power.

“And yet people will say under a CET, for instance, power prices are going to go down. Not without Hazelwood and Liddell they’re not.”

He said he was concerned about blackouts this ­summer after Hazelwood’s closure.

“My concern ... is there is not enough baseload and that shedding does not take into account the jobs and livelihoods at risk because of inadequate planning in our system.”

He stressed that a decade-long transition to cleaner energy was needed.

Also in Melbourne yesterday, Mr Vesey spoke at a Committee for Economic Development of Australia lunch.

He agreed with Energy Minister Josh Frydenberg that subsidies were no longer necessary to promote renewables over other energy sources, but said a transition policy was still needed to ensure power when coal stations closed.

“Technology has now overtaken the need to have specific objectives to have environmentally sound generation,” Mr Vesey said.

theaustralian.com.au 12/10/2017

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