August 27, 2019

Australian watchdog sues France’s Engie over 2017 power blackout

Reuters | August 27, 2019 |

An Australian regulator said on Tuesday it was seeking penalties against Engie SA (ENGIE.PA) for allegedly failing to tell the electricity market operator it had power capacity available which could have averted a blackout in South Australia in 2017.

The action is the latest by the Australian Energy Regulator to compel power generators to comply with national electricity rules as the market operator tries to keep the lights on with a grid that is increasingly dependent on flexible power sources like gas-fired plants to back up wind and solar power.

The regulator on Tuesday alleged that Engie’s Pelican Point natural gas-fired power plant failed to inform the Australian Energy Market Operator (AEMO) for several months before Feb. 8, 2017, that it had a unit that could be switched on with 24 hours notice.

Without that information, the AEMO was unable to manage the power system properly, the regulator said.

The market operator came under fire in February 2017 for failing to tap Engie’s Pelican Point plant for power during a heatwave that resulted in blackouts.

“As we head into summer, it is important that generators provide AEMO with timely and accurate information about their capability to ensure that AEMO can manage system security and keep the lights on for Australian consumers and businesses,” Australian Energy Regulator Chair Paula Conboy said in a statement.

“Engie rejects these allegations and will defend the claims,” a company spokesman said in an emailed statement. He declined to comment further while the matter was subject to legal proceedings.

Earlier in August the regulator sued four wind farm operators over a state-wide blackout in South Australia in 2016.

Generators face penalties of up to A$100,000 ($67,540) per breach of national electricity rules. If Engie’s breach is counted for every day that the market operator was not informed, it could face penalties of millions of dollars.

Reporting by Sonali Paul; editing by Christian Schmollinger

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