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Hazelwood's closure does not mean imminent blackouts for Victoria. Takver/Flickr, CC BY-SA

Victoria’s Hazelwood power station will be shut down this week after nearly 50 years of supplying electricity.

The imminent closure has led to concerns about blackouts, raised most recently by Deputy Prime Minister Barnaby Joyce, and rising electricity prices.

So what does the evidence suggest?

Blackouts ahead?

Last week The Age reported that Victoria is facing “72 days of possible power supply shortfalls over the next two years”. While that sounds bad, it does not mean the state is facing imminent blackouts.

This was based on a report from the Australian Energy Market Operator (AEMO), which is in charge of making sure that Australia’s energy markets work.

Every week, AEMO produces something called the Medium Term Projected Assessment of System Adequacy. This report assesses the expected supply and demand of electricity for the next two years.

In a recent report, AEMO did indeed forecast a “reserve shortfall” for 72 days in Victoria in the coming two years. AEMO has actually been forecasting many days of reserve shortfall, since early November last year when Engie announced the closure of Hazelwood.

AEMO has also been forecasting an even greater number of days of reserve shortfalls in South Australia for well over a year.

The shortfall forecast is based on a combination of factors. This includes the amount of local energy supply, the import and export of electricity from other states, the maximum daily demand for electricity, and the “reserve requirement”. The reserve requirement is essentially “spare” capacity that can be used to maintain a reliable supply if something goes wrong.

If there is not enough supply to meet this requirement, there is a reserve shortfall.

Forecasting maximum demand is incredibly challenging and uncertain. AEMO does it by using probabilities. This gives us a measure of the probability of a particular demand forecast being exceeded in a year.

For example, a 10% chance would be expected to be exceeded one year in ten. A 50% chance would be expected to be exceeded one year in two.

To illustrate the point, AEMO forecast that demand over the past summer in Victoria had a 10% chance of exceeding 9,900 megawatts. In reality, the maximum demand was only 8,747MW. That’s not to say the forecast was wrong, but rather that it was not an exceptional (one year in ten) summer.

In the recent outlook, AEMO has found 72 days on which a reserve shortfall might occur. The likelihood of this happening on any one of those days is low. For a reserve shortfall to actually occur 72 times over two years is incredibly unlikely.

However, AEMO still plans for this possibility. Indeed, this is largely the point of producing these forecasts: signalling potential capacity shortfalls so the market and operator can respond.

What will happen when Hazelwood closes?

Another way of illustrating the role of Hazelwood and the effect of its closure on the broader Victorian energy system is shown below.

In this figure, I’ve plotted the 10% and 50% thresholds for exceeding maximum demand in the coming summer, and also the “load duration curve” for previous years. This curve shows that the periods of greatest demand are also the least common (the left side of the graph). The vast majority of demand is much lower, and the “base load” is about 4,000MW.

† Interconnection capacity (from other states) at times of peak demand is much less than the total theoretically possible. ‡ Firm wind is about 7.5% of total rated capacity in Victoria. Author

I’ve also included “firm capacity” (the minimum power we know we can get) with and without Hazelwood, to the right.

As can be seen, there is more than enough capacity in Victoria to meet the base load. There is even enough local firm capacity to meet the peak load and reserve requirements for the one-in-two-year maximum demand event. For the one-in-ten-year event, power needs to be imported from other states to ensure secure supply at the peaks.

AEMO reaffirmed security of supply in a media statement last week. As noted, Victoria and other states have available power generation resources that are not switched on or are operating at less than full capacity. This electricity can be made available to replace the power that Hazelwood supplies.

What about prices?

The question of what replaces Hazelwood brings us to prices. Many, including AEMO, expect to see increased generation from currently underused power plants. These include New South Wales’ black coal power plants. Last year NSW’s black coal was used at 56% of its total capacity. Bumping up these stations’ output would also reduce NSW’s reliance on Victorian exports.

Reducing the capacity of brown coal will mean logically that Victoria relies on more expensive forms of generation such as black coal or gas. This is particularly so if the availability of cheap imports is limited, and more expensive local generation such as gas is needed.

Black coal power stations generate electricity comparatively cheaply. Even so electricity prices are already so high that an increase in black coal generation may not have a dramatic impact on prices. With NSW prices averaging A$137 per megawatt hour this year, it is clear that the cost of coal is not determining electricity prices.

The Victorian wholesale market will also become a more concentrated market. As a result, there may be more opportunities for market power to be exercised. Perhaps the recently announced ACCC inquiry into power prices will put generators on their best behaviour.

Any price rise may be short-lived. The Australian Energy Market Commission, which sets the rules for the energy market, has reported that more renewable energy supply is expected to reduce wholesale electricity prices.

Hazelwood’s closure should not compromise the security of the Victorian electricity system over the next few years. This is not to say that there definitely won’t be a blackout. A one-in-50-year storm, a plant failure, a flooded mine pit, an interconnector outage – any of these events could strain the system beyond what is manageable.

At this stage, what ultimately happens to prices is anyone’s guess. Whatever the case, it is clear that Victoria has plenty of supply to meet the state’s base load. New capacity might be required to meet the maximum demand – and that new capacity could take the form of energy storage.

Dylan McConnell has received funding from the AEMC's Consumer Advocacy Panel and Energy Consumers Australia.

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Climate change is one of the greatest threats facing Australia’s wildlife, plants and ecosystems, a point driven home by two consecutive years of mass coral bleaching on the Great Barrier Reef.

Yet among this growing destruction there is a degree of resilience to climate change, as Australian animals and plants evolve and adapt.

Some of this resilience is genetic, at the DNA level. Natural selection favours forms of genes that help organisms withstand hotter and drier conditions more effectively.

Over time, the environmental selection for certain forms of genes over others leads to genetic changes. These genetic changes can be complex, involving many genes interacting together, but they are sufficient to make organisms highly tolerant to extreme conditions.

Some of this resilience is unrelated to DNA. These are “plastic” changes – temporary changes in organisms’ physical and biochemical functions that help them deal with adverse conditions or shifts in the timing of environmental events.

Plastic changes occur more quickly than genetic changes but are not permanent – the organisms return to their previous state once the environment shifts back. These changes also may not be enough to protect organisms from even more extreme climates.

What about Australia?

In Australia there is evidence of both genetic and plastic adaptation.

Some of the first evidence of genetic adaptation under climate change have been in vinegar flies on the east coast of Australia. These flies have a gene that encodes the enzyme alcohol dehydrogenase. This gene has two major forms: the tropical form and the temperate form. Over the past 30 years, the tropical form of the gene has become more common at the expense of the temperate one.

Plastic adaptation due to climate change has been demonstrated in common brown butterflies in southern Australia. Female butterflies are emerging from their cocoons earlier as higher temperatures have been speeding up their growth and development by 1.6 days every decade. According to overseas research, this faster development allows butterfly caterpillars to take advantage of earlier plant growth.

Higher temperatures are causing the common brown butterflies in southern Australia to come out of their cocoons earlier. John Tann/Wikimedia Commons, CC BY-SA

In many cases, it is not clear if the adaptation is genetic or plastic.

The average body size of Australian birds has changed over the the past 100 years. Usually, when comparing birds of the same species, birds from the tropics are smaller than those from temperate areas. In several widespread species, however, the birds from temperate areas have recently become smaller. This might be the direct result of environmental changes or a consequence of natural selection on the genes that affect size.

In the case of long-lived species like eucalypts, it is hard to see any adaptive changes. However, there is evidence from experimental plots that eucalypts have the potential to adapt.

Different eucalypt species from across Australia were planted together in experimental forestry plots located in various environments. These plots have unwittingly become climate change adaptation experiments. By monitoring the plots, we can identify species that are better at growing and surviving in extreme climatic conditions.

Plot results together with other forms of DNA-based evidence indicate that some trees unexpectedly grow and survive much better, and are therefore likely to survive into the future.

What’s next?

We still have much to learn about the resilience of our flora and fauna.

There will always be species with low resilience or slow adaptive ability. Nevertheless, plastic and genetic changes can provide some resilience, which will change the predictions of likely losses in biodiversity.

Much like how our worst weeds and pests adapted to local climate conditions, as demonstrated many years ago, our local plants and animals will also adapt.

Species with short generation times – a short time between one generation (the parent) and the next (the offspring) – are able to adapt more quickly than species with longer lifespans and generation times.

For species with short generation times, recent models suggest that the ability to adapt may help reduce the impacts of climate change and decrease local extinction rates.

However, species with long generation times and species that cannot easily move to more habitable environments continue to have a high risk of extinction under climate change.

In those cases, management strategies, such as increasing the prevalence of gene forms helpful for surviving extreme conditions and moving species to locations to which they are better adapted, can help species survive.

Unfortunately, this means doing more than simply protecting nature, the hallmark of our biodiversity strategy to date. We need to act quickly to help our animals and plants adapt and survive.

Ary Hoffmann receives funding from the Australian Research Council, National Health and Medical Research Council, and Terrestrial Ecosystem Research Network. He is affiliated with the Climate Change Specialist Group of the International Union for the Conservation of Nature.