How serious is the news of continual long term failures of Victoria's power supply?
I'll steer clear of the politics and focus on the technical and financial (including investment) aspects of it all.
Firstly, what has happened?
Following is the status of all out of service plant in Victoria. Where I haven't stated a reason that's because it's not public knowledge and whilst in some cases I know the answer, it would be inappropriate to say so.
Loy Yang A unit 2 - major damage requires a complete rewind of the alternator, at a cost of $57 million, to repair. AGL has awarded a contract to GE Power Australia to perform this work. They're aiming for a return to service in December 2019. Capacity of this unit is 530 MW and the fuel is coal. Owner = AGL.
Mortlake unit 2 - major incident will take a few months to fix but Origin haven't confirmed the details there yet beyond saying they're aiming for 20 December 2019. Capacity is 275 MW and the fuel is gas (open cycle gas turbine). Owner = Origin.
Yallourn W unit 3 - tripped yesterday morning due to a boiler tube leak. In layman's terms - pipe has a big hole in it. Solution = put the fire out (easy just stop feeding coal in), let it cool down, humans go in and fix it, start it back up again all of which will take a few days so it's not a major drama. Capacity is a bit variable subject to conditions but ~380 MW. Owner = Energy Australia.
Newport D (single unit station) - tripped this morning from full load about 8:45am. No major problem, just a minor hiccup, and commenced startup about 10:15 and has been at full load since about 5pm. Capacity is 510 MW and the fuel is gas with diesel as backup (this is a steam turbine plant not gas turbine). Owner = Energy Australia.
Somerton is a 4 x 40 MW open cycle gas turbine station. Two units, so 80 MW, hasn't been available for quite some time now. Fuel is gas. Owner = AGL.
Loy Yang A unit 3 - 560 MW coal-fired plant is out for maintenance. Owner = AGL
Yallourn W unit 4 - 380 MW coal fired plant out for maintenance. Owner = Energy Australia.
Jeeralang B unit 1 - 84 MW open cycle gas turbine. Fuel is gas with diesel as backup. Owner = Energy Australia.
Clover whole station (2 x 13 MW) - out of service for major maintenance. This is a hydro plant owned by AGL.
Does all this matter?
In the short term it's an economic issue but not one which threatens supply. Power not generated cheaply at Loy Yang or Yallourn is being produced more expensively elsewhere. Spot prices are higher than they otherwise would be, there are impacts on individual companies since those who are filling the gaps aren't necessarily the same companies who are having problems, but overall it's an economic issue.
That it's an economic issue not a threat to supply is primarily because demand in Victoria peaks during Summer not Winter such that having some plant out isn't a problem within reason. That the Murray-Darling Basin Authority wants to transfer quite a lot of water out of Dartmouth reservoir into Hume dam (for reasons completely unrelated to electricity supply) is a bonus since that means substantial running of Dartmouth power station (hydro, 160 MW, AGL) which is adding more supply than it would if not for the bulk water movement objective of the MDBA.
In Summer however it's a very different story since even with all plant in service, total demand can exceed capacity in Victoria meaning that any problem, however minor, adds to the shortfall and that remains true even with maximum supply from other states included.
Further, supply in SA tends to be finely balanced during extreme hot weather such that any problem can only be addressed by means of supply from Victoria. Supply which won't be available if there's plant out of service in Victoria.
The reason this matters is simply due to that lack of sufficient capacity. It's the same with anything eg let's consider a large workforce as an analogy:
52 weeks in a year.
Less 4 weeks recreation leave. That's 8% downtime in itself.
Less an average say 1 week sick. There's another 2%.
Less any workers compensation issues
Less any other sort of leave eg paternity or leave without pay
Less unfilled positions due to staff turnover for whatever reasons
Less long service leave for those who are there long enough.
End result being that if you simply must have 100 people on the job each day and can't go below that well then you need somewhere around 120 employees in order to have 100 actually turn up on any given day.
Now this is where the trouble starts.
Talk to an engineer about all that and you'll get a lot of nodding and so on even if said engineer has never given any previous thought to human resources. It's just maths and it all makes sense really.
Talk to an economist or business guru and depending on their view of the world they'll be getting all excited saying this is inefficient and must change. Can't have 120 employees to do the work of 100 that's too inefficient and so on. That might sound familiar to many.....
Same problem with power generation. You need spare capacity, 20% or so, to account for the inevitability that things can and will fail and they need maintenance. If it's all new and well maintained then you might get away with a 15% margin but if it's older then you'll need 25% due to more problems being inevitable. If the standard of maintenance and operation is less than perfect then it'll be even higher especially as plant gets older and the effects of past operation and maintenance take their toll.
That Victoria doesn't have that 20% margin, indeed its actual capacity is about 88% of historic peak demand on a stand alone basis or 94% with supply from Tas and NSW included so that's a negative reserve margin, is why it's rather precarious and any plant outage during Summer does pose a direct threat to supply.
Amidst all this, AGL have changed their mind about mothballing Torrens Island A units 1 & 2 in SA. These are old (in service since 1967) steam units originally designed to burn oil in the boilers but later converted to gas and with a capacity of 120 MW per unit. They were about to be shut in a few weeks but for the moment at least they've been given a reprieve - that's the second time they've been saved from the scrap heap now. Getting hold of enough gas is likely to be somewhat problematic at times but there's always oil as a workaround to that albeit an expensive and smelly workaround.
The TIPS A units are functional but, well, it's 1960's plant that's been run pretty hard over that time and as has been noted elsewhere it's a credit to the original designers, who did it all with pencil and paper no computers back then, that it still runs pretty much perfectly (it was run right up to 100% of its original design capabilities last Summer without any drama). It's inefficient by today's standards most certainly, technology has improved greatly since it was designed and built, but it works. There's a limit to how much more it's got left in it though - 52 years and counting is certainly getting old for steam plant.
The big trouble here is that the whole thing is seen as an ideological debate rather than a technical problem.
I've intentionally made no comment on the merits of one technology over another here and that's because the technology itself isn't the problem but rather, the use of it.
If you've got antique steam plant well then there's no real point anyone standing around acting surprised when there's a breakdown. I mean seriously - who here drives around in a 1973 car or has their 1968 washing machine still in regular use and expects it to work flawlessly day after day? Anything which runs at hundreds of degrees and high speed has a finite life that's the nature of it.
Likewise there's no point anyone blaming the machinery or its original designers and builders if it fails due to poor operating and maintenance practices. That's a fault of one lot of humans who ignored the other humans saying there was a need to check things with the machine, it's not the fault of the machine itself that it needs maintenance otherwise it breaks.
No point blaming genuine bad luck for causing a problem when anyone with knowledge knows that bad things do happen and that there's a need to be prepared hence the spare capacity. Every grid in the world, at least in developed countries, was designed with that in mind. Heck there's even a completely fictional novel, written by a fiction author not an engineer, based around the concept and that book's 40 or so years old.
Likewise no point in blaming something brand new like a battery if the humans choose to run it flat before its needed, meaning it can't do anything when it needs to.
And so on.
As with investing and trading, if you want it to work then stick to facts and maths not ideology and politics.