A long-awaited report into last year’s energy crisis has recommended the government retain the Tamar Valley Power Station.
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But the parliamentary Public Accounts Committee believes its importance should be reconsidered if there is a large expansion of energy sources in Tasmania’s energy mix.
The committee on Tuesday tabled its report into the crisis, finding that low rainfall and the Basslink outage could have cost Hydro Tasmania up to $180 million.
The committee made eight recommendations, including:
- that significant changes to energy security management should be made after consultant with big energy users;
- that Hydro Tasmania’s claims to commercial confidentiality be balanced against public interest;
- that Hydro’s storage management policy be reconsidered.
The report noted that the minimum water storage level was dropped to 25 per cent based on Hydro’s assessments that it would be able to operate at that level with support from the gas power station, Basslink, and wind power.
It would also enable them to maximise revenue through electricity exports during the carbon tax period.
The report acknowledged that the former Labor government and current Liberal government had played a part in the delayed recommissioning of the Tamar Valley Power Station.
It also found the Tasmanian Minerals and Energy Council was not consulted about the decision to sell part of the power station in 2015 and that major industrial electricity users wore significant costs due to taking load reductions.
The committee recommended that Hydro should disclose any negative impacts from a gas contract negotiation between the state-owned company and Tasmanian Gas Pipeline.
An agreement on gas transportation between the two companies is due in December.
Committee chairman Ivan Dean in the report said:
“A timely and satisfactory resolution of this issue is necessary for certainty of prices for other gas users including small and medium businesses, major industry and residential customers.”
Energy Minister Matthew Groom said the report validated the government’s response to the crisis.
He said the government would consider the recommendations and speak on it in Parliament on Wednesday.
Meanwhile, Labor’s Scott Bacon said:
"The decision to decommission and sell the power station significantly contributed to the energy crisis which cost the state more than $150 million and put major employers at-risk.”