"Today's 'rolling blackouts' across Melbourne and parts of Victoria after 36 hours of hot weather demonstrate how fragile our energy system has become, how the national energy grid is struggling to meet demand and how important it is to end political blame-shifting and settle on long-term national policies to underpin energy reliability and affordability while the nation grows and emissions decline," Ai Group Chief Executive Innes Willox said today.
"Australia is not a third world country but after many years of sweating increasingly decrepit old generators and dissuading new investment through policy chaos it is hard not to conclude that parts of our national energy system belong in the third world.
"The cost to business in downtime, lost production and lost inventory is highly significant. Extreme heat events are increasingly common. Uncertainty over whether the electricity system will cope cannot be allowed to become a regular feature of the Australian economy.
"The reality is that a lot of preparation has been done for the summer – Reliability and Emergency Reserve Trader guidelines, extra generator availability, demand response - and without it yesterday and today would have been much worse.
"We particularly need to acknowledge the role of Alcoa's demand reductions in keeping Victorians from blackouts on Thursday. Despite this preparation and goodwill there are many possible points of failure across our interconnected electricity system when the weather is at its worst.
"As the Australian Energy Market Operator's forecasts have said, the grid is at a particularly vulnerable point this summer, with supply still tight from major closures including Hazelwood and much planned new supply not yet online. And we've seen that some of our existing generators are ageing and increasingly prone to break down. More investment in energy resources - supply and demand side - is clearly needed. However that investment needs to be efficient: much of the cost of our electricity already comes from seeking to sustain supply on a handful of extreme heat days each year.
"One promising area for action is improving energy efficiency among households and businesses, which could do a lot to reduce power stress – and improve comfort and resilience – on future days when the mercury rises," Mr Willox said.
