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Energy regulator launches legal action against wind farm operators over SA statewide blackout

Collapsed electricity pylon

The Australian Energy Regulator (AER) has launched legal proceedings against four wind farm operators over South Australia's 2016 statewide blackout.

Key points:AGL is among four companies facing legal action over SA's September 2016 blackoutThe Australian Energy Regulator said the companies breached national energy rulesThe regulator is seeking to impose penalties through Federal Court action

The AER said the Federal Court proceedings were against subsidiaries of AGL, Neoen, Pacific Hydro and Tilt Renewables.

It alleged the companies failed to comply with performance requirements to ride through major disruptions and disturbances, and breached the National Electricity Rules.

"The AER has brought these proceedings to send a strong signal to all energy businesses about the importance of compliance with performance standards to promote system security and reliability," AER chair Paula Conboy said in a statement.

"These alleged failures contributed to the black system event, and meant that AEMO [Australian Energy Market Operator] was not fully informed when responding to system-wide failures in South Australia in September 2016.

"Providing timely and accurate information to AEMO is critical in ensuring power-system security and the effective operation of the wholesale energy markets."

The blackout occurred on September 28, 2016, when extreme weather — described at the time as "twin tornadoes" — caused major damage to electricity infrastructure, knocking down huge transmission lines.

The AER said a subsequent loss of wind generation then triggered the blackout, which left 850,000 customers without power.

The regulator said it was seeking to impose penalties against the four companies.

A lone policeman directs traffic near Victoria Square.

The blackout prompted multiple investigations as well as furious debate in the ensuing months about the reliability of renewables.

Federal Energy Minister Angus Taylor said the legal action could test whether electricity market rules were "being enforced".

"When we bring generators into the system, they have to be integrated, they have to perform according to the rules," he told ABC Radio Adelaide.

"If there are questions about whether they did, that needs to be investigated and, if appropriate, enforcement action needs to be taken."

AGL blames 'catastrophic storm', not breaches

The legal action relates to several wind farms in the state's mid north including Neoen's Hornsdale wind farm — which was later connected to Tesla's giant battery.

In its notices of filing to the Federal Court, AER alleges the breaches occurred over several years at all but one of the companies.

In the document regarding the Hornsdale wind farm, it alleges that Neoen "failed to ensure that its plant and associated facilities … complied with its generator performance standards".

"The respondent failed, in contravention of the rules, to provide automatic protection systems to protect its plant and associated facilities against abnormal voltage excursions," the document states.

"The failure of the Hornsdale wind farm to ride through network voltage disturbances … was a contributing cause of the black system event and blackout across the South Australian region of the National Electricity Market."

An aerial shot of turbines in South Australia's mid-north.

A similar accusation was levelled against AGL and its Hallett wind farms.

In a statement to the Australian Stock Exchange, AGL said the allegations against it "were highly technical in nature".

"AGL has previously stated that it considers that it has complied with its legal obligations in relation to the [blackout] … but will review the allegations made by the AER and consider its position," it said.

But in a subsequent media statement, AGL said it did "not accept the AER's conclusions" and would "strongly defend these proceedings".

"We are committed to working with the regulator and stakeholders to ensure the integrity of the energy market and the ongoing stability of South Australia's electricity system," it stated.

Storm still brewing below SA

The company acknowledged the impact the blackout had on communities and businesses, but blamed the situation on a "catastrophic storm" and insisted it complied with national energy rules.

"Weather experts described the event as a once-in-50-year storm, with 80,000 lightning strikes and tornadoes with wind speeds reaching up to 260 kilometres an hour."

Tilt has also defended the way its Snowtown wind farm responded to the crisis, saying it "acted in good faith and in accordance with the applicable National Electricity Rules".

"The company will continue to engage with the AER in an endeavour to resolve this matter."

SA Premier Steven Marshall said he was not aware the energy watchdog was planning action.

"I don't want to comment on something that's now before the courts — I haven't had a chance to read their submission — but I want to tell SA that we're 100 per cent focused on lowering costs and strengthening the grid," he said.

Economic analysis carried out by the state's peak business lobby, Business SA, alleged the blackout cost businesses $367 million.

The emergency lasted from a number of hours in some areas to several days in other regions including the Eyre Peninsula.

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