2016 Tasmanian energy crisis
| Industry | Energy |
|---|---|
| Founded | 1914 |
| Headquarters | Tasmania , Australia |
| Products | Hydroelectric power, wind power, gas power generation |
The 2016 energy crisis in Tasmania represented a critical shortage in the region's energy reserves. This situation arose after two consecutive years of substantial electricity exports to Victoria via the Basslink HVDC link, combined with diminished rainfall and a malfunction that rendered the cable inoperative. These factors culminated in historically low levels within Tasmania's hydroelectric storage system, prompting emergency measures from Hydro Tasmania and the Hodgman Government.
Background
Tasmania's electricity production has been predominantly hydroelectric since its inception in 1914, making it heavily reliant on precipitation. An energy deficit during the 1960s led to the establishment of the oil-powered Bell Bay Power Station, which primarily served as a backup; however, hydroelectricity remained the dominant source as of 2015. The state maintained energy independence until 2005, when the Basslink HVDC interconnector to Victoria was introduced to bolster supply security during drought periods and to export renewable power to Victoria’s coal-reliant grid.
Following the closure of Bell Bay in 2009 and partial suspension of operations at the gas-fired Tamar Valley Power Station, with discussions underway about a partial sale, Tasmania’s dependence on hydroelectric power further intensified. This reliance was somewhat mitigated by expansions at the Woolnorth Wind Farm (initiated in 2007) and the development of the Musselroe Wind Farm (completed in 2013).
In July 2012, the introduction of Australia’s carbon pricing mechanism enhanced the competitiveness of renewable energy producers over fossil fuel generators. Anticipating its repeal by the Abbott administration after the 2013 federal election, Hydro Tasmania increased power generation and reduced reservoir storage from mid-2012 until the carbon price was abolished in July 2014. Storage levels reached nearly 62% toward the end of 2012 but dropped to approximately 28% by mid-2014. Additionally, Hydro Tasmania adjusted its minimum storage threshold downward from 30% to 25% starting September 2012.
Despite receiving above-average rainfall between May and August 2015, storage volumes failed to improve substantially through late 2014 and throughout 2015. Beginning in September 2015, inflows declined drastically, with October receiving only about 7% of its long-term average water input.
Basslink outage
On 22 December 2015, Basslink revealed that its HVDC cable had experienced a fault on 20 December, resulting in a complete halt of electricity flow in both directions. The defect was pinpointed approximately off Tasmania's coastline, with an anticipated downtime extending up to 60 days.
To investigate the fault, Basslink enlisted expert contractors, including Italian specialists in cable joining and the submarine cable-laying vessel Ile De Re, which had been specially adapted in Geelong for handling HVDC cables. The issue remained unresolved into February 2016 and involved considerable repair expenses.
Basslink announced on 8 March 2016 plans to sever the cable within a week, aiming to restore service by late May; the actual cutting took place on 11 March. By the end of March, the fault was located, which delayed the expected restoration until mid-June.
By late April, the initial phase of repairs was finished. Electricity transmission through the cable recommenced on 13 June 2016 but was disrupted again on 22 June due to a separate mechanical malfunction. Service was reinstated after nearly 36 hours on 23 June.
Response
Measures implemented to conserve water in Hydro Tasmania's reservoirs included:
- Reactivating the gas-powered Tamar Valley Power Station
- Agreements with three principal industrial consumers—Tamar Valley smelters Bell Bay, TEMCO, and Norske Skog's paper mill at Boyer—to collectively reduce their load by 180 MW
- Utilizing up to 200 MW of mobile diesel generators
- Bringing forward Hydro Tasmania's cloud seeding program by one month
Politically, there was no unified stance across parties regarding the energy challenges. Considerations were underway about long-term consequences, including the possible permanent loss of the Basslink link. Early Hydro Tasmania dam constructors reflected on their work but did not address alternative solutions proposed during the 1980s.
On 8 March 2016, Tasmanian Energy Minister Matthew Groom outlined government interventions and announced the establishment of a Tasmanian Energy Security Taskforce to oversee management of the ongoing energy crisis.
The Basslink cable failure also affected part of Tasmania's internet infrastructure. The state government contemplated seeking federal assistance for a second cable while fault detection efforts on the original remained unresolved. Opposition criticism of the crisis was dismissed as alarmist. The situation triggered investigations into Hydro Tasmania’s operational management and asset supervision.
Issues of residual capacity
By March 2016, Tasmanian news outlets raised concerns about Hydro Tasmania’s capacity to produce electricity amid critically low dam water reserves. With no immediate solution by late March, upgrades were made to the gas turbines at Tamar Valley Power Station to mitigate the crisis.
Several analysts stressed the urgent need to confront these energy challenges for Tasmania’s future stability. In reaction, numerous companies and organizations proactively secured alternative power sources despite official reassurances. By late March, Hydro Tasmania downgraded its dam level forecasts further as Lake Gordon reached its lowest ever recorded volume. This situation sparked renewed discussions about revisiting earlier proposals such as restoring Lake Pedder to its original condition to boost water supply.
Energy consumption
In March, rising concerns about shifting weather patterns and growing energy demand led Energy Minister Matthew Groom to urge for prudent use of electricity. To alleviate immediate supply constraints, diesel generators were deployed at Meadowbank Power Station until June. The ABC News website consistently reported on the evolving energy scenario. Additionally, in April 2016, Hydro Tasmania initiated a campaign promoting energy conservation through advertisements placed in newspapers.
Economic and political consequences
The energy crisis triggered notable financial and political effects impacting both the Tasmanian government and banking institutions. Hydro Tasmania’s escalating financial difficulties posed risks to state revenue streams. Nevertheless, essential industries were anticipated to receive uninterrupted power, helping to prevent widespread economic disturbance.
External evaluations and comparisons
Observers beyond Tasmania analyzed how governmental decisions and Hydro Tasmania’s management influenced the energy predicament. Former employees criticized recent board actions at Hydro Tasmania, while analysts from mainland Australia highlighted the necessity for revising existing energy strategies and operational approaches.
Power outages and contingency planning
By early April, it was reported that "active discussions" had been ongoing for more than three months concerning potential enforced blackouts and brownouts. Despite this, the Minister publicly refuted claims that power rationing would be required for small households. Various sectors within Tasmania voiced apprehensions about possible energy shortages impacting their operations.
Media reports during May 2016 covered the persistent crisis, noting delays in Bass Strait repairs due to adverse weather conditions and unresolved disagreements regarding the Basslink cable fault’s origin. Concurrently, increased rainfall boosted dam storage levels, offering some easing of supply pressures.
Crisis resolution
The resolution of the power shortage was anticipated following the Basslink cable repair planned for mid-June 2016, coupled with replenished hydro storages from heavier rainfall. Prior to this, contingency measures focused on enhanced use of diesel generators at power stations to satisfy demand.
In March 2016, the Energy Minister stressed that while neither weather nor Basslink repair timing could be controlled by the government, contingency plans were in place to guarantee Tasmania’s energy requirements were fulfilled.
Concerns emerged in April regarding the subsea cable repair needing an unprecedented 18 consecutive days of clear weather over Bass Strait, which raised the possibility of further postponements.
By 12 May 2016, Hydro Tasmania declared a return to standard hydroelectric operations: diesel generation was halted and gas consumption reduced to avoid overfilling smaller reservoirs. The combined cycle gas turbine at Tamar Valley Power Station was also shut down due to high inflows pushing storage capacities close to maximum.
That same week saw significantly above-average rainfall across Tasmania’s dam catchment regions, aiding the recovery of renewable energy output.
Senate investigation
In early 2016, an inquiry into the Tasmanian energy crisis was launched by the Australian Senate, scheduled for April. On 14 April, the Tasmanian Minister for Energy stated he had not been invited to attend, while the Premier dismissed the inquiry as a federal election maneuver—despite internal Hydro Tasmania documents revealing serious concerns about water reserves. The inquiry commenced on 14 April with the Premier announcing that Hydro Tasmania employees would not participate:
Mr Groom has said Hydro staff should not be distracted during the energy situation
Throughout the inquiry proceedings, both the Minister and government representatives minimized several issues presented before the committee, and the Tasmanian Treasurer refused to disclose financial impacts related to the crisis.