Victoria's blackouts, Hazelwood's closure and the search for someone to blame

Michael Slezak
The Victorian opposition blamed the blackouts on the closure of the Hazelwood power station. Photograph: Scott Barbour/Getty Images

Blackouts in Victoria this week caused by substation malfunctions have spawned a plethora of responses, many attempting to pin the blame on either a lack of coal or too much renewable energy.

One national newspaper has argued that the focus on substations was a “smokescreen” to hide what it identified as the real cause – Victoria’s moratorium on gas exploration.

“It’s true part of the outages were caused by fuses but the outages were too widespread,” wrote Robert Gottliebsen in the Australian. “It’s another smokescreen.

“Government spin doctors and others are desperately trying to conceal the truth,” he said, linking the blackouts to Victoria’s gas moratorium and renewable energy.

“We are looking at concealment of information from Victorians on a scale rarely seen in any developed country.”

An early response by the Victorian opposition leader, Matthew Guy, blamed the Labor government for allowing the Hazelwood power plant to close.

That position was echoed by a string of Coalition MPs linking the blackout to the closure of Hazelwood.

But if Hazelwood had been operating, the blackouts would have been just as likely.

As has been pointed out repeatedly by the network operator, the network owners and others since the blackouts occurred, there was plenty of supply in the network – more than enough to power the state, even during its unusual demand that day.

Information available so far suggests the blackouts were caused by fuses blowing in substations – a problem with the distribution network, not with supply. A heatwave on a Sunday, when most people were at home rather than in offices or schools where the network is more prepared to deliver electricity, meant the peak demand was drawn in an unusual way – putting unexpected pressure on substations servicing residential areas. And in the same way it would if too many appliances on were turned on in one room in a house, a fuse blew.

Whether that should have been unexpected – especially given the now-infamous amount of money spent “gold plating” Australia’s transmission networks – is another question.

Guy’s response was backed up by a host of coal-oriented campaign groups, politicians and conservative media outlets.

A social media campaign that pushes for new coal power stations to be built, the Australian Power Project, said on Facebook: “It’s clear that our power grid cannot cope in Victoria following the closure of Hazelwood less than a year ago”.

Its chief executive, Nathan Vass, a former spokesman for AGL, was quoted in the Australian warning how much worse things would have been if there were more renewables in Victoria.

“Batteries and solar would not have saved Victoria as over 17,000 Victorians had no power throughout the night, when the sun isn’t shining,” Vass said.

Yet, the solar rooftops that do exist in Victoria actually did help matters that weekend. During the very high peak energy use, rooftop solar cut the top off the demand curve, putting less stress on the overall supply.

The question remains: why was the network was unable to supply electricity on Sunday? A heatwave on a Sunday hardly seems like an event so rare it can’t be planned for.

Bruce Mountain, from the energy economics consultancy CME, said that question needed to be examined by state authorities.

Australia’s east coast networks famously gold-plated their infrastructure under regulations allowing them to recoup the costs from consumers by lifting energy costs.

Since 2001, energy bills have increased by between 60% and 100%. The majority of that was driven by increases in the component of the bill that covers network costs. As a result, there was a boom in upgrading of the networks – the “poles and wires” – around the country.

In Queensland a whole substation was partially built, paid for by energy users and then never used.

Although New South Wales, Queensland and Tasmania were the worst culprits, Victorian network operators were also subject to claims of price-gouging through gold-plating. And Mountain says Victorian networks are still among the most expensive in the world and so shouldn’t be failing in relatively predictable circumstances.

“It’s not that there was a terribly unusual event,” he says. “We have extraordinarily expensive networks by international standards. The networks should easily be able to cater for these demand peaks.

“The question to be asked is ‘where did the money go’?”