Environment and Sustainability, Freight Rail

Report: Rail capacity challenging coal plant supply in NSW

Fairfax is reporting coal-fired power generators have been struggling recently to secure coal supply for their power plants, in a development which could potentially drive up household and business power prices.

In a report which has not been confirmed by officials, the Australian Energy Market Operator is said to be monitoring a potential shortfall in coal supply ahead of the 2017/18 summer season.

While a total exhaustion of NSW’s coal stockpiles is unlikely, the dwindling supplies will likely lead to higher prices for the plants which burn the coal.

Any increase in the plant operators’ costs would of course be handed down to the consumer, worsening the ongoing energy crisis which has already driven prices upwards for households and industry consumers alike.

AGL Macquarie general manager Kate Coates reportedly told the paper the company was “scrabbling for contracts” to supply coal to its Liddell and Bayswater power stations.

“It’s difficult, A, to get coal and it’s difficult, B, to get more space on the [rail] lines, and at the moment Glencore with their industrial issues, we’re struggling to get them to commit to more coal,” she was quoted as saying.

“We will just have to keep scrabbling for contracts. We’ve got a bunch of spot purchases coming our way that will tidy us up a bit. But ongoing coal supply is going to be a major issue, not just for us but for our competitors as well.”

The news adds to the growing issue of energy supply on Australia’s east coast. The Turnbull Government has implored AGL to keep its Liddell power station open beyond its planned 2022 closure date, or to sell the plant to someone else who will keep it open.

AGL is adamant the Liddell plant is not viable beyond 2022, inviting journalists on a tour of its aging Liddell power plant in New South Wales recently.

According to several reports, AGL is facing a “huge daily challenge” just keeping the power plant open, and will need to spend upwards of $150 million just to keep the plant open until its planned 2022 closure date.

The 46-year-old plant is said to be currently without one of its four turbines due to maintenance, and another out of action due to a ‘complex’ failure. Two are also said to be running well below capacity to avoid shutting down.

This leaves it running at just 840MW out of its 2000MW original rated capacity, according to reports.

The plant’s coal conveyor system and its ash disposal system have also been described as “highly compromised”, and would also require significant work to have their life extended.

All told, the energy business has reportedly been quoted a cost of around $900 million, if it were to keep the plant open for a decade beyond its 50-year lifetime.

This staggering cost is essentially the company’s main argument against the Turnbull Government’s demands for the plant to remain open, in the interest of national energy supply.

“We’re dealing with a very, very old plant which has a multitude of technical problems,” Coates reportedly said.