Victoria’smain gas facility to run out by end of winter as wind farm output slumps tofive-year low
·EXCLUSIVE
By PERRY WILLIAMS
BUSINESS EDITOR
and RHIANNON DOWN
REPORTER
·10:07PM JUNE 23, 2024
Thenation is facing a deepening energy crisis on two fronts, with gasshortages so acute that Victoria’s main storage plant is set to run out by the end of winter and one of Australia’s biggest manufacturers warning it will slash jobs and close factories if supplies remain short.
Asthe political battle rages over energy policy, there is also concern aboutsupplies from the country’s wind farms, with output slumping to a five-yearlow.
Theeast coast was last week plunged into a fresh energy emergency amid warnings ofgas shortages after supply disruptions and a winter cold snap triggered a runon reserves.
TheAustralian can reveal that the energy regulator cautioned the industry that thelargest supplier of gas storage on the east coast, Lochard Energy’s Iona facilityin northeast Victoria, could run out of gas before the end of winter.
TheAustralian Energy Market Operator told industry and gas users on Thursday thatthe drawdown from the Iona facility needed to be halved from about 400terajoules a day to an average of 200 to avoid it running dry.
Thesituation has also triggered a warning from Orica, one of Australia’s biggestgas users, which said it faced a decision over cutting production and jobs atits Newcastle plant unless conditions in the gas market improved.
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Oricais a major supplier of explosives to the mining industry but said it might beforced to import ammonia for its Kooragang Island manufacturing plant inNewcastle in the next few years if not enough affordable gas was available.
GermanMorales, Orica’s president for Australia Pacific and sustainability, told TheAustralian that “there is not enough gas and there is not affordable gas”.
“Clearlyif we fail to secure long-term gas at a reasonable market price, we may be putin a position of rethinking what is the manufacturing strategy for ammonia inAustralia,” he said.
“TheAustralian gas price is significantly more expensive than that you can buy inother jurisdictions, such as the US. That’s making it very difficult to justifymanufacturing in Australia.”
Withthe energy crisis due to dominate parliament on Monday, former Labor primeminister Paul Keating swungin to attack Peter Dutton’s plan to build seven nuclear reactors around the country, saying it was an “industrial fantasy” and the “most lethal technology of another age”.
“Onlythe most wicked and cynical of individuals would foist such a blight on anearnest community like Australia – a community which fundamentally believes intruth and decency and which relies on its political system to advance thoseideals,” he said.
TheOpposition Leader labelled Mr Keating’s remarks a “petulant outburst” thatwould further undermine the national interest, and ignored claims that Labor’sall-renewables policy could cost $1.3 trillion to rewire the electricity grid.
THEAUSTRALIAN.COM.AU05:14
Nuclear a ‘big step to take’ for Australia
Crawford School ofPublic Policy Professor Warwick McKibbin says Australia needs a “comprehensivereport” on nuclear before it is implemented as it is a “big step to take”.Opposition leader Peter Dutton announced the Coalition’s nuclear plan lastweek. “I think the cost advantage has moved towards renewables since we More
“EvenPrime Minister (Anthony) Albanese acknowledged that Mr Keating’s recentramblings on international affairs were ‘unfortunate’,” Mr Dutton said. “MrKeating’s statement (on Sunday) is no different. This petulant outburst from aman who criticises AUKUS just undermines our national interest.”
Theexchange came as consultancy group WattClarity said the yield from major windfarms across the national electricity market was easily the worst in the pastfive years.
Itsaid the capacity factor, the share of actual electricity generated by a plant,was at just 21 per cent for the year as of June 22.
“2024might be as much as 3,000,000 megawatt hours ‘short’ of wind production throughthe second quarter compared to what some might have expected,” WattClarity’sPaul McArdle said.
Thepolitical debate on Mr Dutton’s nuclear push focused on cost on Sunday, withNationals leader David Littleproud failing to rebut Labor’s claim that theCoalition’s energy policy could cost as much as $387bn, arguing it wouldstill be cheaper than the government’s plan to rewire the grid forthe renewable transition.
TheCoalition also revealed more than one reactor could be built on each identifiedsite, but it is unlikely to reveal the exact amount of electricity to come fromthe plan before the election.
AfterEnvironment Minister Tanya Plibersek claimed the Coalition’s plan could cost$387bn, Mr Littleproud said: “Well, that’d be a fraction of what their plan by2030 of 82 per cent renewables would cost.”
THEAUSTRALIAN.COM.AU04:56
Labor’s ‘ideological view’ on energy ‘doesn’t match reality’: David Littleproud
Nationals leaderDavid Littleproud has called out the Albanese government for its “ideologicalview” on energy…
MrLittleproud accepted the CSIRO’s estimate that each reactor would cost $8.6bnto build, saying the Coalition had been upfront that the figure was “in theballpark”.
“We’vebeen more than upfront saying that is in the ballpark, but we’ll be veryspecific about those costs and those upfront costs,” he told Sky News.
“We’vealso been upfront about who owns this, not some carpetbagger from overseascomes in, takes it all and runs back for a 15 to 20-year period.
“Thiswill be something that lasts for 80 to 100 years.”
Oppositionenergy spokesman Ted O’Brien said an independent nuclear body would determinehow many reactors would be located at each site, as well as whattechnology was feasible.
Heconceded that voters would not know the exact capacity of the plants down tothe gigawatt until after the election.
“Theindependent bodies would look at each plant and come up with a recommendationas to what sort of technology should be used, and from there, it would beexactly what capacity based on that technology,” he told the ABC’s Insiders.
MsPlibersek criticised Mr Dutton’s nuclear plan for being too expensive, andaccused him of seeking to “slam the brakes on” Australia’s progress towardsbecoming a “renewable superpower”. “If Peter Dutton doesn’t agree with thecosts that are out there, he should provide his own costs,” she said. “He’ssaying to Australians, I don’t trust you. I don’t trust you with thecostings we’ve done.”
PERRY WILLIAMS
