Yallourn power outage to put state below safety reserve

VICTORIA'S energy supplies will fall below safety reserve levels in late January when TruEnergy's Yallourn power station takes one of its 350-megawatt generating units offline for nine days for maintenance.
TruEnergy executive Carlo Botto said the outage, scheduled for January 20-29, had been approved by the National Electricity Market Management Company, the electricity market regulator, after consideration of the effect on power supplies.
The withdrawal of the Yallourn unit will push Victoria's generation reserves below what NEMMCO considers to be adequate levels. Last summer, the state had a reserve deficit of about 500MW but cool weather and reliable performance by generators ensured there were no power shortages.
This year the introduction of the 600MW Basslink cable from Tasmania was expected to keep Victoria above safety reserve levels. However, the Yallourn outage will push back-up generation below the trigger point.
NEMMCO's safety reserve margin is set so there is adequate reserve to cover the loss of one unit in the state's largest generator during heatwave conditions.
NEMMCO spokesman Paul Price said the organisation believed there would be no power shortages as a result of the Yallourn shutdown. Overall power demand was low in January because the industry generally did not reach full capacity until after Australia Day.
However, NEMMCO will monitor the situation and if the power supply situation deteriorates Yallourn could be ordered to shut down at another time. The maintenance work to be carried out is a boiler washout.
Mr Botto said TruEnergy would also be watching the situation. "We constantly assess market supply conditions, and should conditions change before January, we will reassess our outage (plans)," he said.
"The planned work is part of our overall maintenance strategy to ensure that our power station provides reliable supply of electricity to Victoria and the national market."
Loy Yang A power station, which lost over $1 billion earlier this decade, has reported pre-tax profit of $82.9 million for 2005. That is down on the $86.6 million reported the year before, and includes a $24.8 million gain booked on changing values of derivative contracts.
However, on operational terms, the power group actually did better last year than the year before. When adjustments for derivative values and other things are removed, Loy Yang made $59 million in 2005, compared with $51 million in 2004.
According to Loy Yang, average prices in the power pool were lower in 2005, at $26.29 per megawatt hour, compared with $30.07 in the year before.
Costs also blew out 1.4 per cent due to unscheduled repairs.
In 2002 and 2003, Loy Yang lost $1.03 billion as its former owners wrote down its value after years of losses. Loy Yang was privatised in 1997 for $4.8 billion, a price inflated by unrealistically high expectations of power prices. Lower prices following the formation of the national electricity market meant the power station could not service its debts, leading to the big write-downs. In 2004 Loy Yang was sold to the Great Energy Alliance Consortium, which includes Australian Gas Light and Tokyo Electric, for $3.5 billion.
That crystallised a $1.3 billion loss for the original owners.
www.loyyangpower.com.au