Taskforce recommends NSW Government take steps to shore up energy security before summer

22 May 2017

A special taskforce set up to examine the resilience of the state’s electricity system has recommended the NSW Government take steps to ensure we’re ready to deal with potential energy risks next summer.

New South Wales narrowly avoided power outages during extreme heatwave conditions on 10 February this year – but only after the community heeded calls from the Minister for Energy and Utilities Don Harwin to curb consumption, and the state’s biggest industrial user, Tomago Aluminium, was directed to shed load.

The Minister established the Energy Security Taskforce to assess risks to and the resilience of our electricity system, review how we manage energy emergency events, and recommend ways to address vulnerabilities and/or improve current practices.

The Taskforce, chaired by Chief Scientist & Engineer Mary O’Kane, has today released its initial report which has found NSW is reasonably well placed to deal with reliability and security risks under ‘normal conditions’.

However, large spikes in demand and problems with supply that sometimes occur during extreme weather events, such as February's heatwave, pose challenges for our electricity system and, indeed, the National Electricity Market (NEM).

Professor O’Kane said the Taskforce has recommended the Government take steps to minimise potential risks ahead of next summer.

“There is a tremendous opportunity here for NSW to show strong leadership on what is an issue of national importance: our energy security,” Professor O’Kane said.

“There are emerging risks that require prudent and proactive planning, including the forecast of hotter, longer and more frequent heatwaves; changes to the energy generation mix; and industry concerns about fuel availability, including coal and gas,” she said.

The Taskforce has made seven formal recommendations to Government:

  1. That the NSW Government, through the Premier and Minister, take a leadership role in COAG and the COAG Energy Council to encourage the states and Commonwealth to have a national policy approach to climate change and the integration of renewables within the National Electricity Market, to safeguard energy security and reliability.
  2. That in producing its revised Energy Adequacy Assessment Projections (EAAP) in May-June 2017, AEMO pay particular attention to the generator fuel positions so that the market can see in aggregate if there is sufficient fuel in the system and can anticipate major changes. If the system is tight, this will be visible to participants, policy makers and market agencies, and may incentivise additional fuel contracting or investment in new generation.
  3. That Government improve the speed and ease with which it can respond to an energy emergency, including revising legislative provisions where necessary.
  4. That Government improve the structural processes underpinning the management of energy emergencies in NSW and ensure a stronger link between energy management and emergency management.
  5. That Government improve procedures for operational communications during energy emergencies in NSW, including communication to the public, and ensure these procedures are well-practised.
  6. That Government support industry and the community to prepare for, manage, and mitigate risks during energy emergencies, including providing guidance on how to reduce demand effectively during peak periods.
  7. That Government establish a working group (including representatives of the Commonwealth and ACT Governments) to develop new protocols for agencies to reduce demand and increase behind-the-meter supply during periods of peak energy use (‘Code Warm’ protocol).

Professor O’Kane is joined on the Taskforce by former NSW Police Force Deputy Commissioner Dave Owens and Dr Brian Spalding, a commissioner on the Australian Energy Market Commission. They will deliver their final report towards the end of the year.

“We’ve had really fruitful meetings and received some very useful submissions from a range of stakeholders to date. However, our work is not done yet and we’d love to hear from anyone who wants to have their say about the initial report or any longer-term issues facing our electricity system,” Professor O’Kane said.

The Taskforce will also consider analysis and recommendations from the Independent Review into the Future Security of the National Electricity Market (the ‘Finkel Review’) which is expected in mid-2017.

For more information about the NSW Energy Security Taskforce go to: http://www.chiefscientist.nsw.gov.au/energytaskforce