Callide C4 Return Delayed by Another Month 

Callide C4’s return to service has been delayed for another month, with August 31 as the new target date.  

Faults have beset the power station for over a year. 

Current Status 

Unit C3 has been back online since April 2024, following a rigorous testing and commissioning process.  

Initially, Unit C4 was scheduled to return to service by July 31, 2024, but the date has now been pushed back to August 31, 2024, to allow more time for testing and quality assurance. 

The coal-fired generator’s return follows two separate incidents: an explosion in May 2021 that damaged Unit C4 and a cooling tower structural failure in October 2022 that took Unit C3 offline.  

These incidents led to widespread blackouts and significant disruptions in the energy market. 

The Callide C Incidents 

Explosion at Unit C4: In May 2021, a blast at the Callide C Power Station caused a catastrophic failure, taking out one turbine and tripping three other units. The immediate aftermath saw 800 megawatts of electricity abruptly removed from the grid, resulting in widespread blackouts across Queensland. This event disrupted daily life and sent wholesale electricity prices skyrocketing to $15,000 per megawatt-hour (MWh), a stark contrast to the average price of $53 per MWh in the previous year. 

Cooling Tower Failure at Unit C3: In October 2022, a structural failure in the cooling tower of Unit C3 led to its immediate shutdown. The incident compounded the already strained energy supply situation, as Callide C was still recovering from the previous explosion. These two significant outages left the power station’s 810 MW capacity offline, causing further instability in the energy market. 

Cost of Repairs and Increased Maintenance Fees 

The cost of repairing both units at Callide C has been substantial. The explosion at Unit C4 and the cooling tower failure at Unit C3 have together required an estimated $400 million in repairs. These costs include rebuilding turbine units, replacing cooling towers, and addressing structural failures. Additionally, ongoing maintenance fees for coal generators have increased significantly, reflecting the aging infrastructure and the need for enhanced safety measures. 

Impact on Pricing

High repair costs and increased maintenance fees are likely to be passed on to consumers, potentially leading to higher electricity prices in the short term. 

 These added costs can put upward pressure on spot prices, particularly during peak demand periods or unforeseen outages. 

The significant investment in repairs and maintenance aims to ensure long-term reliability, which could eventually stabilize and lower prices as the risk of unplanned outages decreases. 

Impact on Wholesale Futures

The return of Callide C’s C3 unit is expected to have a long-term stabilizing effect on wholesale futures prices. In the short term, however, its return coincided with some sharp futures spikes. Before the incidents, Callide C was a critical component of Queensland’s energy supply, contributing significantly to the grid’s stability and capacity. The outage led to increased reliance on more expensive and less efficient gas-fired power plants, which in turn drove up futures prices. 

Keep up with the developments in Callide C 

With Callide C’s full recovery seeing a delay once more, it isn’t far-fetched to expect some impact on both the energy supply and pricing, although the degree to which it will manifest itself remains to be seen. 

Follow along with Leading Edge Energy as we keep an eye out for the impending return of Callide C4 unit and how it will affect the NEM when it is fully restored. You can find more information about Callide C here in our blogs. 

Alternatively, you can read our monthly electricity market updates to see how stabilisation efforts impact electricity prices and grid reliability.  

For any questions you may have about your commercial or industrial electricity contracts and how to manage your costs and consumption, get in touch with our Energy Management Consultants at 1300-852-770 or email us at info@leadingedgeenergy.com.au. 

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