It’s useful in understanding the current power price crisis to separate Queensland’s energy generation from market supply
A number of sensational claims blaming Queensland for the current energy pricing crisis have been voiced in the media over recent weeks. Fears of blackouts and load sharing led to accusations of not enough coal-fired generators or too many. The specter of renewables arose with too much or too little wind and solar generation. It culminated in blackout alerts and a power saving panic on the night of Monday, June 12 – later revised down.
In understanding the complex nature of Australia’s National Energy Market (NEM) it’s useful to separate Queensland’s energy generation from market supply. Once the energy enters the NEM a multitude of other factors are at work to contribute to customer power bill prices.
Focusing on Queensland generation, the 103 fossil fueled and renewable powered units across the state are either privately owned, private-public owned or fully public. The Queensland government diversifies it’s share into into four government-owned corporations (GOC) – CS Energy Ltd, Stanwell Corporation Ltd, CleanCo Queensland and Energy Queensland Ltd. With that in mind, the government is mostly concerned with energy generation for its citizens across homes and businesses. It faces the constitution on its energy performance at the ballot box every four years.
The Queensland government also has an unspoken responsibility to provide power to New South Wales to meet shortfalls. The 2018 incident showed that if Queensland is suddenly offline the impact can be felt on people as far away as Sydney’s suburbs. “An unplanned outage of the main transmission inter-connector between Dumaresq in NSW and Bulli Creek in QLD caused widespread system issues across eastern Australia, according to Ausgrid,” The Sydney Morning Herald reported at the time.
Some academics and commentators have been calling for the Queensland government to immediately intervene in the market as it had done in 2017. Two things happened in that year which were of structural nature.
It instructed Stanwell to return Swanbank E gas-fired power station to service which had been mothballed by the previous government of Premier Campbell Newman. It then instructed the entity to adjust its bidding in the national market. “To complement the return of Swanbank E, the Queensland Government has directed Stanwell to alter its bidding strategies to help put as much downward pressure on wholesale electricity prices as possible.” Stabilizing electricity prices for Queensland consumers.
The government isn’t going to intervene in the current crisis preferring to let the Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) do their jobs. Queensland Premier Annastacia Palaszczuk is performing the eyeballing (a trait she picked up from former Queensland Premier Peter Beattie) while leaving the jawboning to her energy minister, Mick de Brenni.
As the minister explained recently, a typical day would see demand across the state of 4,500 megawatts with about 9,000 megawatts generated across the system.
Most of the offline Queensland public and private generators blamed in the media for the problem were already undergoing scheduled maintenance before the crisis. Callide C4 coal-fired unit had been down since the explosion of 2021.
After the AEMO directed generators across the NEM to meet shortfalls, Minister de Brenni confirmed that no such orders were necessary for Queensland’s publicly-owned units.
Queensland’s eight coal-fired generators are aging with various end-of-life dates. There are currently no substantive plans from the private sector or public to replace them with new ones. Treasurer Cameron Dick this week as part of the state budget released the costings for the energy generation network including some upgrades to existing units and expansion of the renewable sector.