2016 Tasmanian energy crisis

The 2016 Tasmanian energy crisis was an ongoing energy storage situation in the state of Tasmania, Australia in 2016. Two years of high volumes of energy exported to Victoria via the Basslink HVDC cable, followed by low rainfall, and a fault which rendered the cable inoperable, resulted in record low storage levels in Tasmania's hydro-electric system. This resulted in a number of contingency plans to be enacted by Hydro Tasmania and the Hodgman Government.

Tasmania's electricity generation is primarily hydro-electric, having been gradually developed since 1914. As a result, the state is highly dependent on rainfall for electricity generation. An energy shortage in the 1960s resulted in the construction of the oil-fired Bell Bay Power Station. However, this station was only used as a contingency - as of 2015, hydro-electricity continued to be the primary generation method. The state was self-reliant until 2005, when the Basslink HVDC interconnector to Victoria was completed. Basslink was intended to both provide energy security, in case of drought; and provide renewable energy to Victoria, which relies heavily on coal as a fuel source.

Tasmania's reliance on hydro-electricity was further increased by the decommissioning of the Bell Bay Power Station in 2009, and the mothballing of several units of its replacement, the gas-fired Tamar Valley Power Station, including considering selling parts of the station. Conversely, this reliance was reduced in part by the expansion of the Woolnorth wind farm in 2007 and the construction of the Musselroe wind farm in 2013.

In July 2012, an Australian carbon pricing system came into effect, providing renewable electricity generators with a competitive advantage over greenhouse gas-emitting generators. The Abbott Government had promised the repeal of the scheme in the lead-up to the 2013 federal election, in which they were successful. Anticipating that the carbon pricing scheme would be short-lived, Hydro Tasmania capitalised by increasing generation and running down storage levels over the period from July 2012 until the carbon price was repealed in July 2014. Hydro Tasmania's storage levels peaked around 62% in late 2012 before declining to 28% capacity on 1 July 2014. Whereas Hydro Tasmania's target minimum storage levels on 1 July each year was traditionally 30%, in September 2012 it lowered this target to 25%.

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