Ageing coal and gas generators getting less reliable, says AEMO

The Australian Energy Market Operator says the fleet of ageing coal generators in Australia are getting less reliable, and their ability to perform to expectation will be put under further stress in the summer heat.

“Coal-fired generation reliability continued to demonstrate historically poor performance last year, consistent with recent historical trends,” the market operator writes in its new 10-year outlook of supply and demand.

See also: AEMO says coal exits won’t trigger shortfalls if big batteries built on time

It says that while some improvements to plant reliability are expected in the medium term, thanks to maintenance and the closure of some of the oldest plant such as Liddell.

“Most generators are anticipating a trend of decreasing reliability in the longer term,” it says. “In several instances, significant improvements in aggregate outage rates for a generation class are due to the expected retirement of units with high outage rates, rather than expectations of improved performance across the asset class.”

This is important in the debate over the future of coal generators, including in NSW where the planed closure of the biggest generator, Eraring, has become a political flashpoint.

Most energy utilities have flagged early closures for their coal units due to the increasing costs of maintenance, the increased risk of heat waves, and the push for cleaner power.

However, because of the decade-long policy mess, and ongoing delays in building infrastructure, governments have had to step in to guarantee support for a coal fired generator while waiting for new renewables, storage and transmission lines to be built.

Victoria has done this twice – for the Yallourn and Loy Yang A brown coal generators – and there are fears that the NSW government will follow a similar path with the 2.88GW Eraring, nominally due to close in 2025.

The Coalition regularly calls for coal generators to be kept open – supposedly to wait for nuclear small modular reactors which aren’t even going to be built in numbers in advanced nuclear economies for at least a decade – but the AEMO report highlights the risk of this fossil fuel play.

The situation in NSW is improved in Figure 19 above, partly because the 50-year-old Liddell plant was shut in April, but the forecast for ongoing unplanned outages remains high. In Queensland, the rate is predicted to double from historic rates, and brown coal in Victoria also has an unplanned outage rate of more than 10 per cent.

“Generator unplanned outage rates are forecast higher than previously, reflecting recent trends of poor performance among some generator technologies,” AEMO says.

“The reliability of the thermal (coal and gas) generation fleet generally stayed at historically poor levels in 2022-23, and most plant operators have advised that overall plant reliability is unlikely to materially improve.”

The problem for AEMO is that these unplanned outages usually occur at times when the plants are needed most, because they stress in extreme heat, particularly of the type forecast in the impending El Nino summers.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of the EV-focused The Driven. Giles has been a journalist for 40 years and is a former business and deputy editor of the Australian Financial Review.