Hydro set to weather drought

Hobart Mercury
Thursday 7/2/2008 Page: 24

GIVEN the media focus on the effect of the drought on Tasmania and its effect on power supplies, Hydro Tasmania believes it is important the community is aware of the facts around our capacity to meet demand. The most important is that it is not raining. While parts of the eastern seaboard have been inundated of late, the past three months have been very dry with much of the state having just recorded its driest January on record.

This is on top of a decade of below average inflows into hydro storages. Hydro Tasmania historically met about 90 per cent of electricity demand through inflows into its storages. Over the past 10 years, these inflows have dropped by 5 to 10 per cent on average, with the lowest year (2006) being 65 per cent of average. Storages are presently 22.4 per cent, compared to 27.6 per cent at the same time a year ago. That is the lowest they have ever been at this tine of the year and highlights the serious effect of the continuing drought and the importance of Basslink in maintaining security of supply.

The state's power demands can presently be met through a combination of hydro generation from inflows and storages, Basslink, which is capable of supplying 25 per cent of the state's demand while being operated commercially, and Bell Bay power station, which can supply from 10 to 15 per cent depending on reliability. Existing wind supplies can meet about 3 per cent of demand.

Without Basslink, storages would be significantly lower. Basslink of late is being used almost entirely to support hydro storages through imports. As a result of recent poor rains, only 4.6 gigawatt hours (GWh) were exported in January 2008, compared to imports of 201.8GWh. In the 2007 calendar year. Tasmania imported 1902GWh across Basslink while exporting 618GWh.

Hydro Tasmania is able to export to the national market to take advantage of high prices and import when prices are lower without affecting the security of supply and our capacity to meet Tasmanian demand. Exports also minimise the degree of spillage of smaller storages, which can fill quickly after heavy local rains.

In 2006/07, Hydro Tasmania spent $100.6 million on power imported via Basslink and on gas to run Bell Bay Power Station to maintain security of supply. The ongoing reliance on Basslink imports to help combat the drought conditions will continue to have a significant financial effect on the business.

New wind energy opportunities are emerging with the change of federal government. Construction of the Musselroe Wind Farm in the state's North- East is expected to go ahead this year. The existence of Basslink helps the state's wind farms develop their full potential.

Hydro Tasmania therefore believes talk of power blackouts in 2009 is premature. While a continuation of the extreme conditions we have experienced over the past three months for a further 15 months could lead to shortfalls in autumn 2009, that is unlikely to happen. It would require several events to occur at the same time, including a prolonged unavailability of Basslink, for there to be a significant possibility of restrictions.

In the meantime, Hydro Tasmania is focused on doing all it can to protect storages, plan for all contingencies and take what action we can to get the best possible use out of our resources and assets to ensure we continue to meet state demand despite the downward trend in rainfall.