Let’s take a look at how this could have affected the Victorian electricity market.

The planned industrial action was the result of a two-year dispute over the new enterprise bargaining agreement between the unions and AGL. In anticipation of such an outcome, AGL was set to slowly shut down the plant from 10 May 2017.

The combination of forecasted low winds and the temporary shutdown of Loy Yang A would have seen demand for power exceed the available supply twice leading up to the shutdown.

In fact, this week did see parts of Loy Yang A go offline quite quickly, triggering a short high price event in Victoria.

Loy Yang A in the power market

Loy Yang A is a major source of power for Victoria. It’s a 2.2 GW coal-fired power station and generates enough electricity for over two million homes each year – nearly a third of Victoria’s average energy use.

Its contribution is significant given that Victoria also generates power from wind, gas, hydro and solar – and imports from other states too (i.e. SA, NSW and Tasmania).

What the future may hold

The Loy Yang A enterprise agreement debate may be over for now. But the situation has highlighted how shutting down a major power station can considerably increase demand over supply.

And for Flow Power customers?

The industrial action not going ahead means wholesale purchasing customers will not need to rely on local generation. As the generation mix changes, the market will adapt to meet the needs of customers. For now, Flow Power customers are leading the way by responding to market signals. They have the power to shape both their power bills and the way the market works.

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