Heatwave sends power prices soaring, threatens health

Energy prices have maxed out, officials are warning of escalating power outages and ambulance units have been bolstered as Victoria and South Australia enter a third day of 40-plus temperatures.

Victoria and South Australia are buckling under soaring electricity demand as the states enter their third day of 40-plus degree temperatures, with a fourth predicted for tomorrow.

Victoria's AGL Energy-run Loy Yang A power station saw one generator go down yesterday with engineers restore power by 9am today after Premier Denis Napthine warning of the prospect of widespread outages should the unit remain down. Victorian Energy Minister Nicholas Kotsiras said prior to the restoration 100,000 homes faced outages.

One unit also went down for a period yesterday afternoon in South Australia, at AGL's Torrens plant, but was restored within hours with both incidents being blamed on "equipment failures" by AGL.

The Herald-Sun reports that cardiac arrests spiked 40 per cent over the past two days in Melbourne, with 27 cases recorded, while Ambulance Victoria said it had 80 heat-related call-outs per day with extra paramedics having been called in this morning.

Outages have already occured across Melbourne since Monday, with reports of thousands of homes on the Mornington Peninsula down for hours, while Deakin University's Burwood campus was darkened yesterday afternoon. Adjusted train timetables are also in place across the state as the heat causes delays.

During Victoria's last extented heatwave, just prior to the Black Saturday bushfires in 2009, 374 deaths were attributable to the heat, the coroner found. Ambulance Victoria said the most dangerous periods for people was overnight, when high temperatures prevented the body from recovering.

And the Australian Energy Market Operator has warned of more outages with temperatures expected to remain elevated until Saturday, as soaring demand puts the whole network under risk. It said commercial and industrial users would be blacked out first, then residential.

"When there is a shortfall in the electricity supply, there can be a need to reduce demand very quickly to an acceptable level, or risk the entire electricity network becoming unstable," it said.

SA Power Networks spokesman Paul Roberts said the state's grid was holding up but load shedding was a growing threat as the week progressed. The state is set to activate its 'reserve trader' program, which will pay industrial users for voluntary power use cutbacks.

The strain on the networks does not bode well should there be a repeat of the heatwave conditions in February, Paul McArdle, of energy software company GLOBAL-ROAM, told The Australian Financial Review, with that month usually experiencing higher electricity demand as more industrial operations come online after the holidays.

But the Climate Institute warned against more grid investment, with national policy director Olivia Kember saying that better use of current infrastructure would prevent load shedding in high temperature scenarios, set to increase under climate change.

AEMO said Victoria and South Australia had recorded the highest levels of electricity consumption since January 2009, with a maximum demand of 10,151 MW recorded in Victoria and 3046 MW recorded in South Australia on Tuesday. The average weekday demand for each state in January is 6600 MW and 1980 MW, respectively.

In South Australia, AEMO’s current estimate suggests electricity demand peaking at around 3200 MW and 3360 MW until Friday.

"Some areas may be experiencing localised interruptions to electricity supplies as a result of these conditions," the operator said.

Meanwhile, the high demand saw the two states hit close to price caps yesterday, as seen in the graphs below, as the wholesale price rose above $12,000 per MWh while The AFR reported capacity constraints on interconnectors between Victoria and Tasmania, and Victoria and NSW.

Smaller electricity retailer are said to be under threat from soaring prices, while the major retailers will avoid damage due to hedging contracts kicking in.


Graph for Heatwave sends power prices soaring, threatens health


Graph for Heatwave sends power prices soaring, threatens health

*Times are based on NEM time, which is the same as Queensland time.

*This article originally contained graphs featuring only forecast price peaks. The graphs reflecting actual price peaks have been inserted.