The South Australia gas power plant that sat idle while tens of thousands of customers went without power in a February 2017 heatwave has been found to have breached the National Electricity Rules at the time of the rolling blackouts.
In proceedings brought by the Australian Energy Regulator, the Federal Court found the owner of the Pelican Point gas plant – the biggest single gas generation unit in South Australia – failed to comply with its legal obligation to disclose short term availability information to the market operator, AEMO.
It did this at a time when temperatures in Adelaide topped 42°C and when South Australia’s power system security was threatened by a combination of surging demand, as millions of air-conditioners worked overtime, and inadequate supply.
When no one answered AEMO’s call for extra supply, the market operator was forced to initiate rolling stoppages, or load shedding – blackouts that affected more than 90,000 customers and, at that time, were used as an ideological football against the state’s world-leading shift to renewables.
As RenewEconomy has reported, it was evident quite soon after the event that this was a stuff-up of a non-renewables variety. And an early investigation by AEMO painted a picture of bad management, lousy forecasts, dud software and failing fossil fuel plants.
Still it was not until 2019, following further investigation, that the AER commenced proceedings in the Federal Court against Pelican Point’s owners, alleging breaches of the National Electricity Rules. It has taken another four years to get any sort of verdict.
The AER says the Federal Court has found that Pelican Point Power Limited (majority owned by France’s Engie) breached the NER by failing to disclose to AEMO the full capacity of its Pelican Point Power Station that was available during heat wave conditions.
The plant, located 20km north-west of Adelaide CBD, was commissioned in March 2001 and uses combined cycle gas turbine (CCGT) technology to produce up to 497MW of electricity – or about 17% of South Australia’s thermal generation needs. It is touted as one of the most modern and efficient of its kind in Australia.
In his decision, Justice Besanko found that the central issue in the case was the availability of gas transport to deliver gas to the power station.
At the time, there was controversy over whether Pelican Point was capable of being started up at short notice or not. The plant had been mothballed several months earlier, so it could sell gas on the open market at a profit, and it was claimed in some quarters that it would not be able to secure a gas supply so quickly.
“By early February 2017, it ought to have been clear to [Pelican Point] that it could reasonably expect to obtain sufficient gas transport to operate [the power station] on 8 February 2017,” said Justice Besanko.
AER chair Clare Savage said on Thursday that the Federal Court’s decision reinforces the critical importance of generators providing timely and accurate information to the market operator, particularly in the context of the energy transition.
“Generators must provide complete, accurate and up-to-date information to AEMO so it can manage the power system and ensure safe and reliable power supply to consumers,” Savage said.
“Failure to do so can unnecessarily risk power system security and contribute to major market events.”
On another count, the Court found that Pelican Point did not contravene the NER in relation to its obligation to submit medium term availability information to AEMO about the gas plant.
The AER, which had been seeking declarations, penalties and costs from Pelican Point’s owners, said this week that a separate hearing on penalty will be held at a later date that has yet to be set at this point.
