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Energy Supply Emergencies
16 January Supply Interruptions
Localised energy supply interruptions such as a gas leaks or fallen power lines are usually managed by individual electricity or gas businesses and do not trigger a whole of Government response.
In the event of a major or prolonged shortfall or interruption to the state-wide supply of electricity or gas, the Department of Primary Industries’ (DPI) Energy and Earth Resources Policy Division acts as a single point of contact between the Victorian Government, the gas or electricity industry, and either VENCorp (the Victorian Energy Networks Corporation) or NEMMCO (the National Electricity Market Management Company).
Victoria has periodically experienced major disruptions to electricity, gas and petroleum supplies. The most recent major disruptions were the gas shortages resulting from the Longford incident in 1998 and an electricity supply disruption that occurred on the afternoon of 16 January 2007 which was produced by a bushfire cutting the electricity transmission lines between Victoria and New South Wales.
In the event of a prolonged energy supply shortfall, the Government has access to wide ranging emergency powers to ensure that essential services are maintained and available energy supplies are allocated in such a way as to minimise disruption to the community.
These emergency powers can only be used in exceptional circumstances and require the proclamation of a state of emergency by the Governor in Council. Following the proclamation of a state of emergency, the Minister for Energy Industries and Resources can issue binding directions in relation to the supply and use of energy that overrides other legal rights and entitlements.
Given the characteristics of electricity and gas supply, it is possible that action may need to be taken at very short notice to maintain the integrity of the supply systems. Because of this, VENCorp has powers to curtail supply and make voluntary energy restriction requests to customers, prior to any proclamation of Ministerial powers.
VENCorp uses these powers on the basis of rules which determine the order and extent to which gas or electricity demand is curtailed.
DPI, VENCorp (external link) and NEMMCO (external link) maintain complementary protocols and procedures for managing emergencies, and participate in annual emergency exercises with industry participants to test the emergency arrangements to ensure they run smoothly.
The Victorian Government passed the Terrorism (Community Protection) Act 2003. This Act requires owners and operators of critical infrastructure to work with DPI and the Victoria Police to ensure appropriate security protection and emergency response plans are in place and regularly tested. The Government has undertaken security planning, particularly around critical infrastructure such as energy and planning is based on ongoing risk assessments.
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16 January Supply Interruptions
The electricity supply incident that occurred on the afternoon of 16 January 2007 as a result of a bushfire causing the major transmission lines between Victoria and New South Wales to disconnect was the most serious electricity supply disruption experienced by Victorians for a number of decades.
Victoria lost about one quarter of its electricity supply and nearly half a million Victorian customers were without power. Over the course of the afternoon nearly 700,000 customers lost power and many key community services were disrupted.
Given the magnitude of the supply loss the Government appointed the Nous Group to conduct a thorough review of the incident. They were asked to report on:
- precisely what happened and why;
- the effect of the load shedding on business and the public;
- whether the amount of load shedding could have been reasonably reduced given the knowledge available at the time; and
- whether the likelihood and consequences of any future similar event could be cost effectively reduced?
While the Nous Group found that many aspects of the supply disruption were managed extremely well by the power industry and that there was no single action that if taken on that day, would have guaranteed continuity of all supplies it identifies a range of measures that can be taken to reduce the possibility of such an event happening again and to minimise the consequences of any future event.
The Victorian Government has considered the findings of the Report prepared by the Nous Group and decided to accept all of its 12 recommendations. Two of the recommendations which propose improved communication processes to ensure that Government, the community and Victoria’s emergency services receive better and more frequent advice about any future major electricity supply disruption have already been implemented and the majority of the remaining recommendations will have been actioned by the end of 2007.
In particular, NEMMCO, which manages the Eastern Australian electricity supply system is developing a new process for making decisions about how it sets up the electricity supply system to accommodate the risks from unusual events such as major bushfires.
The new procedures will ensure that decisions about how the power system are set up are made in the light of the best possible information and reflect a carefully structured approach to the evaluation of these risks.
The Executive Summary of the Report produced by the Nous Group which summarises the main findings and recommendations of their Report can be accessed via the following link.
You will need Adobe Acrobat Reader to view the document below. A free copy can be downloaded from Adobe Acrobat (external link).
 (PDF 289kb)  (PDF 41kb)
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