Question without notice - Basslink Gas & Energy Security

Thursday 18 November 2021

Ms ARMITAGE question to DEPUTY LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Ms PALMER

[2.31 p.m.]

Mr President, my questions are:

(1) Given the ongoing concerns regarding energy security in Tasmania, especially in light of Basslink being placed into administration, can the Government guarantee, under the new gas transport agreement, there will be enough gas to run the combined-cycle gas turbine at the Bell Bay Power Station?

(2) Can the Government further guarantee that there will continue to be enough staff employed at the Bell Bay Power Station to ensure the combined-cycle gas turbine power station will be operated at full capacity?

(3) During the last energy crisis the Bell Bay Power Station took a number of months to be brought up to specification to operate at full capacity because parts of the plant were being repaired or were decommissioned. Given the concerns regarding Basslink and energy security, particularly for the industries which are dependent upon gas, can the Government guarantee that all units at the Bell Bay Power Station will be kept on a minimum of two weeks standby?

ANSWER

Mr President, I thank the member for her question. In answer, Tasmania's renewable energy future has never been more secure. Tasmania's energy security is underpinned by our Hydro storage levels which, as of Monday 15 November, sit at a healthy 52.3 per cent.

The Energy Security Risk Response Framework, which this Government put in place in legislation by way of amendments to the Energy Co-ordination and Planning Act 1995, is working effectively. The Government takes seriously the 2017 Tasmanian Energy Security Taskforce recommendation regarding retaining the Tamar Valley Power Station, and committed to retaining it at the state election in May this year. Since that recommendation, Tasmania's energy profile has also significantly changed.

Wind farms that have become operational, like Cattle Hill and Granville Harbour, inject an additional 260 megawatts of capacity into the power system. This has helped Tasmania reach 100 per cent self-sufficiency in renewable electricity, well ahead of our 2022 target.

To further build on this momentum, the Government has legislated a world-leading 200 per cent Tasmanian Renewable Energy Target. Further wind development is in the pipeline. The Tasmanian Energy Security Risk Response Framework requires Hydro Tasmania to hold a minimum level of energy in storage at all times. This amount of storage is called the high reliability level, based on having enough water to run Tasmania through a six-month interconnector outage in dry conditions. On top of that, there is the prudent storage level, an operational energy in storage profile under average supply and demand conditions set such that storage remains at or above the HRL profile following an historically low three-month inflow sequence.

Our current storage level of 52.3 per cent is well above the prudent storage level for this time of year which is 40.3 per cent.

Ms Armitage - With respect, I asked about gas not about the water.

Ms PALMER - I am reading as fast as I can, member. With regard to the recent announcement that Basslink Pty Ltd (BPL) has entered receivership, it is the Government's expectation that Basslink will continue to operate as normal and Tasmania's energy security will not be impacted. The Basslink contracts contain provisions which enable the Basslink Interconnector to continue to operate through this process, connecting Tasmania to the National Electricity Market. Basslink's receivers, KPMG Australia, have supported this position publicly with Peter Gothard, Restructuring Services Partner from KPMG Australia stating on 12 November.

I want to reassure our stakeholders and the community that Basslink's business will continue to operate as usual and there will be no disruption to the operations of the interconnector or communications as a result of this appointment.

The Basslink interconnector will continue to operate as usual during the receivership process, providing an efficient and reliable connection to the national electricity market.

The Australian Energy Market Operator (AEMO) has also noted that the Basslink cable remains in operation and it is in close contact with the receivers. The Government will continue to work constructively with all parties, including the receiver and BPL's financers to ensure that the state's interests are protected.

Regarding the Tamar Valley Power Station, it should be noted that this consists of five generation units. In addition to the 208-megawatt combined-cycle gas turbine, the four open cycle units are able to provide up to 178 megawatts of capacity. The combined-cycle unit last operated during the 2018-19 summer while the open cycle units continue to run intermittently in response to wholesale electricity price signals and gas prices. The unit has not been decommissioned and there are no plans to do so. The availability of this unit does not impact the availability of gas for other industrial, commercial or domestic users of gas.

The current gas transportation connects between Hydro Tasmania and the Tasmanian Gas Pipeline and are occurring at arm's length from government, as is appropriate. It would, therefore, be inappropriate for the Government to disclose or comment on the details of these negotiations while they are underway.

Our Energy Security Risk Response Framework ensures that Hydro storages are actively monitored and early action will be taken should any threat to Tasmania's energy security emerge. Tasmanians can be reassured that our energy security is not under threat from developments with Basslink or the gas transportation negotiations. Any suggestions to the contrary are incorrect.

Ms Armitage - It was a very long answer but there are parts of my questions that were not answered. Perhaps, I could re-put it and send it back to the Government again?

Ms PALMER - Yes, thank you very much.