Hydro set to fire up power station

HYDRO Tasmania will restart operation of the gas-powered Tamar Valley power station today in a bid to reduce highcost Basslink imports at drier times later in the year.

Hydro chief executive Steve Davy said the move had been made for commercial reasons.

Hydro storages are at 41 per cent, which is secure for this time of year, he said.

Hydro ran the Combined Cycle Generating Unit, which comprises part of the power station, from January to June 11 this year at a time that coincided with lower than average autumn and winter rainfall.

The unit was at the centre of political debate in the fallout from the December 2015 to June 2016 energy crisis.

In the period before the Basslink breakage, Hydro and the State Government had discussed the sale of the unit.

The operation of the unit is commercially feasible because use of gas to generate electricity is cheaper than importing electricity from Victoria where prices have skyrocketed.

“The CCGT will be operated to help reduce the amount of electricity Hydro Tasmania needs to import from Victoria over the drier months, therefore reducing overall cost,” Mr Davy said.

Labor Treasury spokesman Scott Bacon said it highlighted why the decision to sell the unit should never have been made. “It’s a critical part of Tasmania’s energy mix, both for security and economic purposes,” he said.

Energy analyst Marc White said it made sense to conserve water this year and exceed the baseline next year so Hydro could sell large renewable certificates next year.

The Tasmanian Energy Security taskforce has established a guideline for Hydro storages called the High Reliability Level concept.

It comes after Hydro storages were run down to 26.3 per cent by June 30, 2014, during the period of the carbon tax.

The low levels made the state’s energy security vulnerable when a record dry spring was exacerbated by the sixmonth breakdown of Basslink.

Hydro aims to have storage levels at 30 per cent on June 30 and 40 on December 1.