Australia’s largest power generator, AGL, has pledged to vigorously defend itself after it and other wind farm operators were sued over the dramatic 2016 South Australian blackout that cut power to 850,000 homes and businesses.
New proceedings filed in the Federal Court against AGL, Neoen, Pacific Hydro and Tilt Renewables allege they failed to comply with performance requirements to ride through major disruptions, the Australian Energy Regulator announced on Wednesday.
“The AER has brought these proceedings to send a strong signal to all energy businesses about the importance of compliance with performance standards to promote system security and reliability,” AER chair Paula Conboy said.
The regulator’s action has been backed by Federal Energy Minister Angus Taylor, who said the public expected and deserved reliable and affordable energy and gas, even in severe weather.
“When Australians flick the switch, they expect the power to stay on,” he said. “And in the end of 2016 we saw 850,000 customers lose their power in South Australia.”
With new energy generation including solar and wind power coming onto the grid at a record pace in 2018, Mr Taylor said it was critical that new generation needed to be “properly integrated … it needs to properly perform”, including in “tough circumstances” such as those that were experienced in South Australia.
AGL said it did not accept the regulator’s conclusions about the 2016 blackout and would “strongly defend” the proceedings, arguing the statewide blackout was triggered by extremely rare and catastrophic weather.
Nearly three years ago – on September 28, 2016 – South Australia was plunged into darkness as powerful storms barrelled across the state in what experts described as a once-in-50-year event.
There were 80,000 lightning strikes along with tornadoes and wind speeds reaching up to 260km/h.
The storms led to a series of failures that caused the state, which has a high reliance on wind power, to become cut off from the rest of the national energy grid.
It also sparked a national political debate over Australia’s energy mix, including questions about whether or not renewable energy, such as wind, was reliable enough to provide baseload power.
“The SA Black System event involved a catastrophic storm,” an AGL spokesman said.
“We understand and acknowledge the impact that this event had on communities, services, organisations and businesses across South Australia. AGL has worked closely with the SA government and regulators following the event, to identify the lessons and potential improvements that could be made.”
Tilt Renewables, which owns South Australia’s Snowtown 2 wind farm and has also been included in the legal action over the blackout,said it believed it acted in good faith in compliance with the National Electricity Rules.
“The company will continue to engage with the [Australian Energy Regulator] in an endeavour to resolve this matter,” chief financial officer Steve Symons said.
The regulator’s legal action announced on Wednesday claims the companies breached the National Energy Rules. It is seeking declarations, penalties, compliance orders and costs.
AGL, in a statement to the stock exchange, described the regulator’s allegations as “highly technical in nature”. The energy giant said the legal action related to the performance of its Hallett 1, Hallett 2, North Brown Hill and The Bluff wind farms during the weather event.
The AER said providing timely and accurate information to the Australian Energy Market Operator was critical to ensuring power system security and the effective operation of the wholesale energy markets.
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