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Category: Electricity Energy and Utilities / Alternative Energy

Labor calls for long-term gas contract for Tamar Valley Power Station

Thursday, 3 Mar 2016 15:16:36

The Tamar Valley Power Station was withdrawn from sale at the end of last year when the Basslink cable failed. (ABC News)

The Tasmanian Opposition wants Hydro Tasmania to negotiate a long-term gas contract to supply the Tamar Valley Power Station, as the state's energy crisis continues.

Key points:

  • Labor wants Hydro to negotiate new gas contracts for the Tamar Valley Power Station to secure its future as a back up generator
  • It argues that new supply contracts after 2017 would ensure business do not pay huge increases in their gas prices
  • The opposition also argues for new Hydro water levels, electric transport investment, and encouragement for households to use less power

Labor has released "Ten Steps to Restoring Confidence in Tasmania's Energy Security", which involves securing the power station as a long-term energy security back-up.

The gas-fired station was slated for sale at the end of last year, but the sale was cancelled when the Basslink cable broke down.

It is now critical to meeting the state's energy demand, with the cable fault coinciding with record low storage levels in Hydro dams

Opposition Leader Bryan Green said he wanted the State Government to direct Hydro Tasmania to negotiate gas contracts with distributor Tasmanian Gas Pipeline (TGP) beyond 2017, to supply the station as a back-up energy supplier.

Labor argues that volumes negotiated would also secure lower-cost gas for all businesses in Tasmania.

"There is a crisis in energy and Labor is laying out a way to ensure that our major industrials and our small to medium businesses in our state can have confidence in future energy security," Mr Green said.

"If Hydro does not renew its contracts, it will have a massive effect on gas prices beyond 2017.

"It will mean 120 per cent increase in prices for say, Grange Resources, and over 200 per cent for Cadbury.

"It will have a devastating effect on the employment opportunities in Tasmania because it makes those businesses less competitive."

Hydro Tasmania said it was in discussions with TGP about what would happen beyond 2017 when the contract ran out.

Water management levels 'should be more conservative'

Hydro Tasmania is shipping in 200 diesel generators over the next two months to ensure the state does not run out of power by winter, when it is hoped rain will boost Hydro dam water storages.

Dam levels are at 16.1 per cent and could drop as low as 13.6 per cent by May.

Tasmania's power crisis explained


Tasmania is facing an unprecedented energy crisis as extremely dry conditions result in dams, which feed hydro generators, falling to almost record lows.

The Tamar Valley Power station has also been restarted to help make-up the power supply shortfall.

Mr Green also said he wanted the Government to direct Hydro Tasmania to reset water management levels from the current 25 per cent, to a more conservative 30 to 35 per cent.

Hydro Tasmania said along with the Tasmanian Government, it had a plan to manage energy security.

Labor's plan also calls on the Government to support electric transport technology.

"It may appear counter-intuitive to be talking about adopting technology that uses more energy in the middle of an energy crisis, but the reality is that increased demand is essential to underpin the viability of investments like the Granville Harbour Wind Farm and even a second Basslink cable," Mr Green said.

Labor also wants households to conserve power.

State Government MP Guy Barnett said the Government had been decisive in putting in place a range of measures to deal with the difficult and challenging circumstances.

AustraliaPlus


 

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