Tomago CEO Blames Shaky Electrical Grid for Power Cuts at NSW Smelter

Tomago CEO Blames Shaky Electrical Grid for Power Cuts at NSW Smelter

Management at Austraila’s Tomago Smelter warned last week that the country’s power grid is at a “crisis point” after his plant was compelled to cut power briefly to allow electricity for the rest of New South Wales.

According to domestic media, Tomago voluntarily powered off its potlines for an hour at a time in order to compensate for shutdowns at the electrical plants at Bayswater, Liddell, and Vales Point. In addition, the state felt a drop-off in electricity due to restrictions placed upon it regarding importing of the same from the state of Victoria.

Though voluntary, Tomago suffered losses of around one-third of its power on both Tuesday and Thursday nights, with power outages expected for Friday as well.

While tempting to place blame at Tomago’s electricity provider AGL, the smelter’s chief Matt Howell pointed the finger at a much broader target – the country’s entire electrical grid.

“This is not summer with extreme demand,” he warned.

“This is the likely future of our energy grid as once reliable baseload generators exit the National Energy Market and are mostly replaced with intermittent wind and solar projects with no practical storage to speak of.

“If we want to be a nation that makes things, rather than one that imports all of its needs, we must have internationally affordable and reliable energy: a system that can reliably deliver, independently of the weather.”

For its part, AGL reaffirmed that its contract with Tomago, which is confidential, did not grant it the authority to unilaterally shut off power to the smelter. Rather, the agreement compels Tomago to pay a higher price per unit when electricity is scarce.

AGL’s spokesman did not specify a number in this instance either, but a local newspaper reports that the agreement calls for Tomago to pay a price of up to 175 times the market price, which itself ranges from between A$80 to a cap of A$14,000 per megawatt hour.

Rather than paying vastly higher prices for electricity, AGL says the plant opted to forgo electricity for a period. Ultimately, AGL says Tomago cut power by 300 megawatts per voluntary outage.

Though no permanent damage to the potlines was reported from last week’s outage, Howell warned that even a brief shutdown is risky.

“Every time a potline is switched off to prevent rolling blackouts, we run the risk of a catastrophic potline freeze,” he explained.

“This occurred at Portland Aluminium in December 2016; an unplanned power interruption resulted in more than two-thirds of the pots freezing solid,” recalled Howell. “This resulted in taxpayers having to bail out the business to the tune of $240 million.”