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Category: Electricity Energy and Utilities / Hydro Energy / States and Territories

Energy crisis snapshot: What the key players say

Tuesday, 30 Aug 2016 07:40:42 | Richard Baines

Hydro dams across Tasmania experienced record low levels. (Supplied: Angela Wilson)

It has been more than eight months since the Basslink undersea power cable broke and Tasmania started heading towards an unprecedented crisis.

The broken cable and a hydro-electric dam system drained by drought left the state's electricity generator — Hydro Tasmania — in a precarious position.

About 200 generators had to be shipped in to maintain power security for the state.

Major industrial users, which consume about 60 per cent of state power, agreed to scale back production in order to ease demand.

Heavy rain has since replenished dams and the cable was finally fixed in June.

Now a parliamentary inquiry is probing what happened and how it can be prevented in the future.

The inquiry itself has had some unexpected outages, with two ministers withdrawing at the last moment and major industry lashing out over Government performance.

Forming a backdrop has been the history of disagreement between private company Basslink and the state-owned energy provider, Hydro Tasmania.

Energy analyst Marc White has been following the crisis from day one, and said the state had a brush with near disaster.

"The community and the businesses in particular have walked right up to the cliff edge on energy security and we've looked over that cliff edge and we've realised that we simply can't take that risk again," he said.

This is what the key players have had to say so far.

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Basslink

Photo: Basslink has removed a faulty section of its undersea power cable. (Supplied: Basslink)

The failure of the Basslink cable was central to Tasmania's energy crisis but the cable's owners refused to appear.
Basslink's excuse? The inquiry's focus was the performance of government enterprises, not private companies.
Labor leader and former energy minister Bryan Green said it was crucial for Basslink to give evidence.
"Basslink should be coming along," he said.
"Their link is an important part of Tasmania's future from the point of view of securing business."
In late June the ABC revealed Basslink and Hydro Tasmania have a fractured relationship dating going back decades.
Basslink have not held a press conference in relation to the energy crisis or its cable operation since the story ran.

Ray Mostogl

Photo: Ray Mostogl, Bell Bay Aluminium CEO (Supplied)

Bell Bay Aluminium CEO and president of the Tasmanian Minerals and Energy Council Ray Mostogl said those in charge of the state's energy resources had been "floundering for the last six years".
He said he was "alarmed by the decisions and messages being made about the energy assets in Tasmania".
He said the Government needed to deliver on its energy strategy "or stand aside and let someone else who can".
Mr Mostogl said despite the mothballing of the Tamar Valley Power Station being a risk to business, he found out about the decision in the media.
He said the energy crisis was still having an impact on the Bell Bay smelter.
"The dams are full, Basslink is back in but we are not back to full production," he said.

Lindsay Ward

Photo: Lindsay Ward, Tasmanian Gas Pipeline CEO (Supplied)

Tasmanian Gas Pipelines CEO Lindsay Ward took aim at the Government's decision to decommission the Tamar Valley Power Station, which runs on gas.
"I think that is a failure in risk management, in my view. Tamar Valley was a very cheap insurance product," he said.
He also criticised the Government for having to import 200 generators to keep the state's power flowing.
"Importing diesel generators is not the way to provide energy to a state," he said.
"It is the way you provide energy to a mine site in the middle of nowhere. The cost of that is $1 million a megawatt hour."
Mr Ward said a second Basslink cable was not an answer to Tasmania's energy security.
"We don't think it's economic, it's $1 billion and it's 10 years away," he said.
He joined the Tasmanian Minerals and Energy Council in its calls for a long-term future for the Tamar Valley back-up generator.
Mr Ward told the inquiry the contract to supply the power station with gas was due to run out next year and negotiations with Hydro Tasmania had been ongoing since 2013.
He said a viable contract was rejected by Hydro Tasmania.

Steve Davey

Photo: Steve Davy, Hydro Tasmania CEO (Supplied)

Hydro Tasmania chief executive Steve Davey hit back at criticisms from Ray Mostogl and Lindsay Ward.
He said any profitability issues at Bell Bay Aluminium, headed by Mr Mostogl, were no fault of Hydro's.
"Despite all the support from the state-owned energy businesses, aluminium businesses in Australia struggle, this is about international markets, it's not about a lack of understanding or support for these businesses," he said.
Mr Davey accused Mr Ward of trying to disparage Hydro Tasmania to advance his own company's interests after Hydro was accused of failing to secure gas contracts prior to a boom in prices.
"The remarks from Tasmania Gas Pipelines are simply designed to disparage Hydro Tasmania and to strengthen the bargaining position of this private company," he said.
"This is exactly the sort of behaviour the ACCC is trying to prevent.
"It is our view that the committee should question the majority of the assertions by Tasmania Gas Pipeline."

Matthew Groom

Photo: Growth Minister Matthew Groom says the Government will keep prices down. (ABC News: Gregor Salmon)

Tasmania's Energy Minister was set to give evidence to the inquiry in August, but he pulled out at the 11th hour.
At the time the State Government cited what it called an "escalation" in the dispute between Basslink and Hydro Tasmania but there has been no indication what that means.
The Opposition parties have attacked the Government for its failure to appear.
But Matthew Groom recently said he was looking forward to giving evidence.
"I think it's important that we tell the story, I think it's important that we bust some of the myths that have been spread by Labor," he said.

Alan Birchmore

Photo: Alan Birchmore, general manager of Launceston Flood Authority (Supplied)

The appearance of the Launceston Flood Authority was one of the surprise packages of the inquiry, with a scathing attack on Hydro.
Alan Birchmore has long been pushing for Hydro to allow more water to flow from Hydro's Trevallyn dam to help flush silt from the Tamar River.
He told the water quality was extremely low during this year's devastating floods.
"Between Kings Bridge and Tailrace, the Tamar Estuary is nothing short of a national disgrace," he said.
Mr Birchmore said the state was not as well prepared for the floods which took lives and caused tens of millions of dollars worth of damage.

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