Australia to expand hydropower project to address shortages

By Rod McGuirk, Associated Press

Australia will put 2 billion Australian dollars ($1.5 billion) into expanding a hydroelectric project in its latest measure to avoid looming gas and electricity shortages across the nation's densely populated southeast, the government said Thursday.

 

CANBERRA, Australia (AP) — Australia will put 2 billion Australian dollars ($1.5 billion) into expanding a hydroelectric project in its latest measure to avoid looming gas and electricity shortages across the nation's densely populated southeast, the government said Thursday.

The government plans to increase the power output of the Snowy Mountains Hydroelectric Scheme by 50 percent, or 2,000 megawatts, by increasing its pumped-storage capacity, a statement said. Pumped-storage hydroelectricity involves pumping water uphill during times of low electricity demand so that it available to generate more power during peak demand.

Prime Minister Malcom Turnbull said the scheme would provide a backup to the national power grid in which both supply and demand were becoming more volatile due to a growing reliance on fickle solar and wind generation.

"What we are doing here today is supporting a very important game-changing development that will provide more security, greater affordability into our electricity market," Turnbull told reporters.

A bitterly partisan political debate over Australia's energy security has intensified in the past two weeks since the Australian Energy Market Operator, which manages the national grid, warned of potential shortages of gas-fired electricity across southeast Australia by late next year.

The shortage is looming as Australia is expected to soon overtake Qatar as the world's biggest exporter of liquid natural gas. Australia is also a major exporter of coal, which fires much of its electricity generation.

Turnbull threatened to restrict gas exports during a meeting with energy company executives on Wednesday unless they guaranteed to meet growing local demand and prevent shortages.

The conservative Liberal Party-led federal government blames the states, most of which are governed by the center-left Labor Party, for what it described as a national energy crisis.

The Australian government accuses Labor of setting renewables energy targets too high, blocking new gas exploration on environmental grounds and unnecessarily inflating electricity prices.

Labor accuses the federal government of failing to show leadership by ensuring that Australia's power generation keeps pace with demand.

Labor has called on the government to make power generators pay for the greenhouse gas pollution they create by introducing a so-called emissions intensity scheme to the Australian power industry.

Under such a scheme, generators who create above-average emissions for the amount of power they produce would have to buy carbon credits from generators whose emissions are below average or face penalties imposed by the government.

Labor says it would provide the carbon price signal needed for industry to invest in new gas power generation, which is cleaner than coal generation. Coal generators are gradually being closed due to old age and no new ones are planned.

But the government repealed Australia's carbon tax in 2014 and refuses to consider any policy that would make polluters pay.

South Australia State Premier Jay Weatherill, who plans to spend AU$550 million on making his state independent of the nation grid, said the hydroelectric expansion would take up to seven years to complete and would not solve current shortages.

"It shows that the Commonwealth government are in a white-knuckled panic about national energy policy. It is a AU$2 billion admission that the national energy market has broken," Weatherill said.

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