Hydro Tasmania has today commenced instructing Basslink Pty Ltd (BPL) to bid Basslink’s capacity, above certain levels, at the Market Price Cap.

Basslink is currently bid available at 478 MW by its owner and operator BPL.  Hydro Tasmania’s new bidding instruction is intended to limit the use of the last 18 MW (winter/spring) or 33 MW (summer/autumn) of this capacity to critical periods when the Market Price Cap is reached.

The bidding instruction from Hydro Tasmania will apply to capacity above 460 MW during winter and early spring (1 June to 31 October) and 445 MW from late spring to autumn (1 November to 31 May) for flows in both directions.  Hydro Tasmania believes the bidding instructions will reduce the risk of the cable operating above its design limits. 

Hydro Tasmania has a contractual right under the Basslink Services Agreement (BSA) to instruct BPL to apply a price to its bidding of Basslink Capacity.  Hydro Tasmania’s bidding instructions must be consistent with the Ministerial Notice dated 9 October 2014 issued under section 36 of the Electricity Supply Industry Act. Under the Ministerial Notice Hydro Tasmania is required to publish the reasons for giving certain instructions.

The reason for Hydro Tasmania issuing the bidding instructions discussed above is that Hydro Tasmania has received engineering analysis from its cable experts, following a preliminary review of a recent survey of Bass Strait environmental properties, which concluded that the Basslink cable may be at risk of exceeding its temperature design limits if operated continuously above these levels.

Hydro Tasmania has provided BPL (the asset owner) with the recommendations from its cable experts.  These recommendations are subject to ongoing review and Hydro Tasmania will continue to review its position as new information comes to hand.  Hydro Tasmania is using its contractual right to issue these bidding instructions because there is disagreement between Hydro Tasmania and BPL about the risk that Hydro Tasmania is seeking to address.

Note all Basslink capacity figures in this market statement are stated at the receiving end.

Ends.