Hydro Tasmania today announced it has made a commercial decision to restart the combined cycle gas turbine at the Tamar Valley Power Station in the New Year.

Tasmania has experienced its driest September to November period on record. This has coincided with a positive Indian Ocean Dipole (IOD) event, which is an indicator of low inflows into our storages. The IOD has returned to a more neutral value and we have received better inflows in recent weeks.

Hydro storages currently stand at 25.7 per cent. Use of the combined cycle gas turbine (CCGT) at the Tamar Valley Power Station is one of a number of options the business has been considering to manage the commercial impact of below average inflows to hydro storages since September.

“Hydro Tasmania has always operated the CCGT optimally within our portfolio, and restarting it in early 2016 makes good commercial sense, given the low inflows to our storages in the last few months,” said Gerard Flack, Director Wholesale Energy Services.

“We have concluded that it is economically sensible to run the CCGT for a period in the New Year. Most of the commercial arrangements were previously contracted, so have remained in place while the unit has been in dry lay-up. The incremental cost of running the unit over summer compares favourably to other supply options.”

Hydro Tasmania restated its assurance that there is more than enough energy to meet Tasmanian demand despite the record dry of the past few months.

“Even if we experience a continuation of below average inflows to hydro storages through until next winter, there is enough energy to meet Tasmanian demand,” said Mr Flack.

“In addition to water currently in storage, there will be future inflows, wind generation and the import capacity of Basslink. While the CCGT remains on site, it provides an economically sensible addition to the energy supply mix.”

This doesn’t change the longer-term view that the unit is not economically viable or required for energy security. Hydro Tasmania remains committed to the sale of the CCGT.

The CCGT has not been used for more than 18 months. When it was put into long-term dry storage, some parts of the plant were disassembled to be safely stored. Hydro Tasmania has engaged a temporary workforce to undertake the work necessary to have the CCGT ready for use next year.

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Released by Samantha Meyer (03) 6230 5746