Immediately when Australian’s think about the drought, they think about the farmers doing it tough or possibly the local lawn mowing business hitting the wall.
But a far bigger problem is emerging. The lack of water is causing havoc with our power generators who uses this precious commodity for cooling or by our Hydro plants as the source of energy.
Snowy Hydro also supplies power during peak demand from it’s hydro power stations. Water levels within the Snowy Scheme system is at 8% of capacity, it’s lowest May level since the massive project was completed in 1974.
Tarong and Tarong North power stations in Queensland is now running at 30% capacity due to lack of water. The flow on effects have caused Rio Tinto to announce this week that it is laying off 160 jobs at its Tarong Mine.
Swanbank B power station is off-line due to “Water management” issues. In Victoria’s Latrobe Valley, Yallourn and Loy Yang B has gone to water auctions to buy in extra water to see them through to the end of the financial year.
In January the price of a megawatt hour for delivery to NSW in 2008 was $38. This week the price rose to just over $72, a 90 per cent rise in less than five months. The electricity price in Queensland has more than doubled.
The doubling of prices also seen in South Australia, has this week caused the largest manufacturers in the state to call for a price inquiry, expressing concerns they are threatening their economic viability.
One thing is for sure, if power prices do go up and stay at these levels, this will effect Australia’s industrial competitiveness.
» Water shortage ‘will lead to power cuts’ – The Australian, 19th May 2007.
» Power cuts, bigger bills on the way – The Sydney Morning Herald, 19th May 2007.
» Rio to cut coal jobs as drought bites into power – The Age, May 17th 2007.
» CSIRO warns Vic on global warming impact – The ABC, 16th May 2007.