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Tasmanian Energy Security Taskforce Final Report

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Tasmanian Energy Security Taskforce Final Report Tasmanian Energy Security Taskforce Security Taskforce Energy Tasmanian Final Report Tasmanian Energy Security Taskforce Final Report | June 2017 June 2017 Front Cover Photography: Cape Grim – Richard Bennett Nyrstar panorama – Brent Pearson Gordon Dam – Sandessa Foster Tarraleah Penstock – Sandessa Foster Tasmanian Energy Security Taskforce Final Report | June 2017 TASMANIAN ENERGY SECURITY TASKFORCE | FINAL REPORT I Contents Foreword . .ix Executive Summary . x Key Findings and Recommendations . xiv Key findings . xiv Priority actions and recommendations . xxi 1 Introduction . 1 1 .1 Background . 1 1 .2 Terms of Reference . 1 1 .3 Taskforce members . 2 1 .4 Approach adopted by the Taskforce . .3 1 .5 Structure of Final Report . .5 PART A – OPTIONS FOR ADDRESSING TASMANIA’S ENERGY SECURITY . 7 2 Recap of Interim Report Recommendations . 8 3 Current National Context for Energy Security . 10 3 .1 National Electricity Market (NEM) energy security events . .11 3 .2 Energy security related announcements . .12 3 .3 Other energy market developments . .13 3 .4 Energy market reviews . 15 4 Modelling and Scenario Approach . 16 5 Modelling of Short-term Energy Security Options . 19 5 .1 Tamar Valley Power Station (TVPS) availability . 19 5 .2 Energy in storage targets . 21 6 Medium-term Scenario Analysis . 24 6 .1 Description of scenarios . 25 6 .2 ‘The Long Dry’ scenario . 26 6 .3 ‘Changing Demand’ scenario . .28 6 .4 ‘Gas Supply Interruption’ scenario . .32 6 .5 ‘On‑island Energy Balance’ scenario . .34 6 .6 ‘NEM Carbon Market’ scenario . 36 6 .7 Risk of an energy security event across modelled scenarios . .38 7 Assessment of Energy Security Options . 39 7 .1 Assessment criteria and measures . .39 7 .2 Short‑term energy security options . .40 TASMANIAN ENERGY SECURITY TASKFORCE | FINAL REPORT III 7 .2 .1 Options with the TVPS available on standby . .40 7 .2 .2 Options where the TVPS is not present . 42 7 .2 .3 Taskforce recommendation . .42 7 .3 Options for addressing on‑island energy balance . .43 8 Role of Interconnection . 46 8 .1 Basslink . .46 8 .1 .1 Performance of Basslink . .46 8 .1 .2 Future reliability . 47 8 .2 Second Bass Strait electricity interconnector . 50 8 .2 .1 The case for a second interconnector . 50 8 .2 .2 Value of a second electricity interconnector to Tasmania’s energy security . 51 9 Impact of Emerging Technologies . 53 9 .1 Consumer impacts on energy consumption . .53 9 .2 Small‑scale renewable energy generation . 53 9 .3 Electric vehicles (EVs) . 56 PART B – RECOMMENDED ENERGY SECURITY MEASURES . 58 10 Energy Security Oversight . 59 10 .1 Energy Security Risk Response Framework . .60 10 .2 Monitor and Assessor . 60 10 .2 .1 Key functions . .60 10 .2 .2 Recommended entity . .64 10 .3 Energy Security Coordinator . .64 10 .3 .1 Key functions . .64 10 .3 .2 Recommended entity . .67 10 .4 Management of natural gas emergencies . .68 10 .5 Implementation principles . 69 11 Management of Hydro-electric Storages . 70 11 .1 High Reliability Level (HRL) profile . .70 11 .2 Prudent Storage Level (PSL) profile . .72 11 .3 Operation below the PSL and HRL profiles . .74 11 .4 Process for establishing and re‑evaluating the HRL and PSL profiles . .74 11 .5 Taskforce modelling of energy in storage . .75 11 .6 Capacity management of energy in storage . .77 12 Tasmanian Gas Market . 79 12 .1 Retention of the TVPS . .79 12 .2 Gas commodity and transportation contracts . .80 IV TASMANIAN ENERGY SECURITY TASKFORCE | FINAL REPORT 13 Demand-side Responses . 83 13 .1 Tasmania’s load profile . 83 13 .2 Small customer demand‑side management actions . 84 13 .3 Pre‑emergency voluntary demand reduction initiatives . .85 14 Changes to Interim Report Recommendations . 87 PART C – ENERGY SECURITY ASSESSMENT . 94 15 Energy Security Assessment for Tasmania . 95 15 .1 Framework for assessing energy security in Tasmania . .95 15 .2 Energy security assessment . 96 15 .2 .1 Electricity energy security assessment . 97 15 .2 .2 Gas energy security assessment . .103 APPENDICES . 107 16 Appendix 1: Stakeholder Engagement . 108 17 Appendix 2: Scope of the Energy Security Cost Model . 110 17 .1 Overview . .110 17 .2 Independent review . .110 17 .3 Modelling principles . 110 17 .4 Modelling energy security responses . 111 18 Appendix 3: Energy and Cost Modelling Assumptions . 116 18 .1 Independent review . .116 18 .2 Baseline energy assumptions . .116 18 .3 Inflows into hydro storages . .116 18 .4 Targeted energy in storage . .117 18 .5 Wind generation . 118 18 .6 Basslink energy transfer . .119 18 .6 .1 Basslink energy flow . .119 18 .6 .2 Basslink export prices . .120 18 .6 .3 Basslink import prices . 120 18 .7 TVPS . 121 18 .8 Demand . 122 18 .9 Other generation sources . .123 18 .9 .1 Supplementary generation: . .123 18 .9 .2 Additional renewable energy generation . .124 18 .10 Carbon price / large‑scale generation certificates (LGCs) . .124 18 .10 .1 LGCs . 124 18 .10 .2 Carbon prices . .124 TASMANIAN ENERGY SECURITY TASKFORCE | FINAL REPORT V 19 Appendix 4: Assessment of Energy Security Options – Additional Information . 125 20 Appendix 5: Actions of the Monitor and Assessor . 136 20 .1 Operation of storages below PSL . 136 20 .2 Operation of storages below HRL . 138 20 .3 Basslink operation . .139 21 Appendix 6: Energy Security Performance Indicators . 140 1 . VI TASMANIAN ENERGY SECURITY TASKFORCE | FINAL REPORT.
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