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Australian government vows to prevent power shortages

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Staff Writer | September 6, 2017
Australia power
Energy   Australian Energy Market Operator

Australian Prime Minister vowed to rule out future crippling power shortages, despite a warning from the Australian Energy Market Operator (AEMO) that Australia faces a shortfall in energy in the next five years.

The AEMO said in a report that unless current coal-fired power stations had their lives extended, Australia faces a shortfall of more than 1,000 megawatts until the government's Snowy Hydro 2.0 pumped hydro power station is built later next decade.

Snowy Hydro 2.0 is a pumped hydroelectric dam project which was announced by the Turnbull government earlier in the year.

Expected to cost upwards of 2 billion Australian dollars ($1.6 billion) and take up to six years to complete, the project is expected to provide an additional 2,000 megawatts of power to the grid once completed.

"We face an increasing and unacceptable risk that there will be insufficient capability in the system," the report said. "In turn, this exposes consumers to a heightened risk of involuntary and unacceptable load shedding (blackouts)."

But addressing the concerns on Wednesday, Prime Minister Turnbull said the government would do everything it could to keep the lights on and keep prices lower for Australians, hinting at extending the life of the Liddell coal-fired power plant for up to an additional five years.

"There are short term problems which AEMO is addressing, but in particular after 2022, which is when Liddell power plant closes, AEMO expects a 1,000-megawatt gap," Turnbull told a press conference in Canberra on Wednesday.

"2022 is a critical date, as it's also a year or two prior to Snowy Hydro 2.0 coming online. We now need to put in place all the options to ensure we find that 1,000-megawatt gap in dispatchable energy."

The prime minister said he would discuss with energy company AGL, which owns Liddell, the prospect of either keeping the power station online for longer, or facilitating the sale of the station to another operator in order to keep supply up and running.

"We have had several discussions with AGL and its CEO Andy Vesey about the Liddell power station continuing for a longer period - up to an additional five years," Turnbull said.

"AGL has said they want to close is by 2022, but that they're prepared to discuss the sale to a responsible party.

"Generators and companies obviously prefer prices to high, but the government's responsibility is to the Australian people and that energy is affordable."

Also speaking at the press conference, Energy Minister Josh Frydenberg said that in the past, AGL had said it would "consider" the sale of the asset despite the scheduled closure in 2022.

"Both the PM and I have spoken to Andy Vesey and we will be meeting with him again on Monday to discuss our options," Frydenberg said.

"What we've heard from the AEMO is that there is a concern - with Liddell scheduled to close in 2022 - that there will be insufficient supply in the market."


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