November 15, 2018 / 1:01 PM / a month ago

Australian power grid prepared for hot summer, operator says

MELBOURNE, Nov 16 (Reuters) - Australia has readied its stretched power grid to cope with a hotter-than-normal summer, with extra electricity supply lined up for the system in case of disruptions, the energy market operator said in a statement on Friday.

This is the second year the Australian Energy Market Operator (AEMO) has taken extra steps to prepare for summer by beefing up power reserves to offset intermittent wind and solar generators and outages at ageing coal-fired plants.

Blackouts hit the country’s southeastern states in 2016 and 2017, the worst of which hit the entire state of South Australia and shut top global miner BHP’s Olympic Dam copper mine for two weeks, costing it $105 million.

“The Bureau of Meteorology is forecasting a hotter and drier summer, which - coupled with other risks we have identified - suggests we have a challenging summer awaiting us,” AEMO Chief Executive Audrey Zibelman said.

Australian power demand typically soars in the southern hemisphere summer as households and businesses crank up air conditioning. At the same time, generation, transmission and distribution networks can be hit by bushfires and storms.

Australia’s Bureau of Meteorology said in a seasonal forecast on Thursday that the summer will be hotter than normal.

“Warmer-than-average days and nights are likely for almost all of Australia for December to February,” it said.

AEMO said in August the states of Victoria and South Australia were most at risk for outages this summer, with some threat in the most populous state of New South Wales, where drought has depleted hydropower dams.

To help prevent blackouts, the operator has secured 930 megawatts (MW) of reserve power, in part by making agreements with some energy users to curb use when supplies are tight.

“AEMO is confident the plans we have made ... have appropriately equipped us to tackle any unforeseen events the upcoming summer might bring,” Zibelman said in the statement.

Last summer, lining up and activating reserve supplies cost the market operator A$52 million ($38 million), which it then passed on in fees to customers in South Australia and Victoria.

Costs for the reserves are expected to fall this year, AEMO said, partly because it has not had to line up as much back-up supply as last year, as 2,100 MW of new generation capacity has come onto the market over the past year.

Australia’s drought is not expected to impact power generation this summer, AEMO said.

$1 = $1.3746 Australian dollars Reporting by Sonali Paul; Editing by Tom Hogue

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