Hazelwood shut its doors on Saturday. Credit:Getty Images Before we get to that February day, consider this evidence. Over the past week, the people that run the grid have gone out of their way to reassure that there is nothing to worry about. Where the Australian Energy Market Operator was highlighting the possibility of reserve shortfalls next summer – not a warning there will be blackouts, but a notice to generators that supply could be pushed if conditions are extreme, and they should have their plants prepared – it is now stressing there is more than enough spare capacity to cover the loss this week of the giant Hazelwood coal-fired plant in case of emergency. Industry insiders agree that, if the system is managed better than it has been in recent times, everything should be fine. They also say decisions made now will be crucial in ensuring reliability in the years ahead as more coal plants close. In the meantime, we may face a smaller buffer for next summer should things go wrong.

The Anglesea coal plant and mine shut in 2015. The changing picture Hazelwood, Australia's oldest and dirtiest power plant, which has helped fire up Victoria for more than 50 years and environmentalists for at least half as long, is the tenth coal generator to shut since 2010. About five gigawatts – more than three Hazelwoods – have been taken out of the grid. Some old baseload gas plants have also closed. Pacific Hydro wind farm at Codrington, south-west Victoria. Credit:Joe Armao Conversely, nearly four gigawatts capacity of wind turbines have been connected, and roughly five gigawatts of solar capacity has been installed on homes. About three gigawatts of gas-fired plants have been commissioned since 2009 to cover peak demand, though much of it is barely used.

These new sources are not a like-for-like replacement. Whereas coal plants run 24-7 and are inflexible, wind and solar energy are variable and need a flexible system in which different technologies are called on when needed. That's where we're headed as the grid modernises. But we're not there yet. Airconditioner use stretches the electricity at peak times in summer. Credit:Michael Mucci The hottest day It's February 18, 2018, and it's bloody hot. It's still early morning, but power hungry airconditioners are being turned on across the eastern seaboard. In the mid-1990s, about a quarter of Australians were artificially cooling their homes. Today, it is more than half. It is airconditioning that sends demand soaring. Victorians are gobbling up about 80 per cent more electricity than on an average day. Solar panel installation. Credit:Mischa Keijser

As the climate control kicks in, home solar systems are also firing up. At the turn of the decade, rooftop solar panels were a novelty. Now, more than 1.5 million households have them. They provide some relief for the stretched electricity grid. And the grid needs all the relief it can get. Like most of us, electricity infrastructure performs less well when it is hot. This applies to the ageing equipment in creaking old coal plants and gas-fired turbines. Some break down as the temperature rises. It also applies to solar photovoltaic panels, some of which lose nearly a fifth of their capacity as the temperature goes past 40. Power lines struggle in the heat. Power lines are sagging and can no longer transmit their usual load. This remains the case despite the extraordinary amount spent on poles and wires over the past decade – so much that network costs make up about half of what we pay in power bills. As the heat takes its toll, some lines are derated and the market operator will reduce the amount of electricity sent to them, lest they pack it in. Meanwhile, the extraordinary weather conditions means the annual threat of bushfire – which could knock out transmission lines and possibly affect generators – remains constant. It would not be the first time disaster has struck a Latrobe Valley generator. In 2012, the Yallourn power station was out of action for months when an artificial riverbank burst, flooding its coal mine.

The Snowy Hydro Scheme at Talbingo, NSW. Credit:Alex Ellinghausen The pressure on the market operator (known in the industry as AEMO) to make the right calls about the things it can control is immense. We have always had occasional blackouts, but the febrile political climate is such that a loss of electricity will have nasty political ramifications for state governments. If things go wrong, they will be quick to pass the buck to the regulator – especially given it has given assurances that everything should be fine. With this in mind, AEMO took extra precautions ahead of the summer. It stressed to generators that they must not schedule maintenance at peak times, and told two baseload gas-fired plants that had been mothballed – Tamar Valley in northern Tasmania and Swanbank E in Brisbane – that they would be required to help fill the gap left by Hazelwood. Both are up and running today. Power lines next to Victoria's Mortlake gas-fired power station. Credit:Luis Enrique Ascui As demand rises, the operator also turns to what are known as peaking plants to supplement the generators that run every day. Hydro power and open-cycle gas (which differs from baseload gas) can be ramped up quickly when the country needs a boost in supply – and is willing to pay a hefty price for the extra generation.

Victoria has a stack of them. Gas is expensive and the east coast supply is overwhelmingly being exported, but there is enough fuel for these plants to come online today. Alcoa’s Portland aluminium smelter uses more than 10 per cent of Victoria's electricity when at full tilt. Credit:Angela Milne To help ease demand, some big industrial plants that use a stack of electricity have agreed under a deal with AEMO to reduce their production to help keep the lights on. Aluminium smelters use more than 10 per cent of the electricity generated in NSW and Victoria. All things being equal, that should do the job. But there are other risks. Inevitably, some plants won't be available. There are likely to be fossil fuel outages, and the wind may not be blowing. FRV solar farm in Moree, NSW.

Several energy experts interviewed by Fairfax Media also raised concerns that, under current electricity market rules, plant owners are not compelled to make their generators available. This was highlighted in South Australia last summer, when 90,000 homes lost power while half of Engie's Pelican Point gas plant ran at about half capacity. Whether this was due to a failure by AEMO to request it to join the market, a decision by the company that it made more commercial sense to leave it idle and allow its other generators to make hay when there was less competition, or a bit of both, remains a point of contention. A couple of days later, NSW had 2000 megawatts of coal, gas and hydro capacity – more than Hazelwood's total capacity – out of action during a heatwave. The Tomago Aluminium plant was ordered to shut one of its potlines to ensure things kept humming elsewhere. Even with this, things were dicey. AEMO faced a decision about who would lose power, and angered the Victorian government by warning that Ballarat and Bendigo may have to be shut down to keep NSW connected. Artist's impression of Lyon Solar's 30 megawatt solar and battery storage project, near Cooktown, north Queensland. These calls are not any easier today – especially with vulnerable Labor governments facing looming elections in Victoria, Queensland and South Australia. But they may have to be made. The short-term fix

The South Australian and federal governments are at loggerheads over energy policy, leading to a heated argument between Jay Weatherill and Josh Frydenberg at a press conference. Credit:ABC The scenario above is the picture today, but it will almost certainly have changed again by next summer. The energy industry has been acting as though on fast-forward over the past fortnight, and shows no sign of slowing down. The Clean Energy Council says there is more than $5.5 billion worth of renewable energy projects under construction this year. On Thursday, Lyon Solar added plans for a $1 billion solar and battery plant in South Australia's Riverland to be in place by next summer. Billed as the biggest of its type in the world, it includes a 330 megawatt solar farm and 100 megawatt battery system with four hours' storage – enough, proponents say, to potentially make concerns about South Australia and Victoria's supply redundant. Battery saviour? Telsa chief Elon Musk. Credit:Bloomberg This is independent of the Weatherill government's quick tender for Australia's first large-scale battery system that could – if Tesla mogul Elon Musk is to be believed – be built in 100 days. It is one of a number of steps planned by the South Australian government. Less headline grabbing, but possibly just as important, is that Premier Jay Weatherill has assured the public there will be 200 megawatts of emergency back-up in place. Almost certainly, it will be met by bringing in cheap, reliable and emissions-intensive diesel generators. This was the path Tasmania took when its hydro dams were running low and the Basslink cable to Victoria was broken last year. It might seem antiquated, but works.

The Victorian government has also promised a battery tender, aiming to have 50 megawatts – enough to power a couple of regional cities for four hours – before Christmas. Another 50 is expected to follow in 2018. Changing times: not far from Hazelwood, Morwell resident Robert Freeman has installed a battery pack linked to rooftop solar panels. Credit:Jesse Marlow Batteries and diesel can help deal with peaks, but Hazelwood's daily output is likely to be mostly replaced by increased generation at NSW's black coal plants, which have been running at about 50 per cent capacity. Other promises - including Malcolm Turnbull's proposal for a $2 billion expansion of the Snowy Hydro Scheme, and South Australia's pledge to support new plants to run government agencies and to build further gas-fired back-up - will take longer to be realised. There are also likely to be new rules for the operation of the electricity market that may make it easier for batteries to compete – though this is opposed by the owners of open-cycle gas plants – and almost certainly will give AEMO more power to require dormant generators to turn on.

The ignored opportunity Perhaps because it has no champion among industry or regulators, the potentially significant scope to quickly reduce electricity demand through smarter use of technology remains little explored. A paper released last week by the awkwardly named Energy Efficiency Certificate Creators Association makes the case for the savings possible by cutting waste. Victoria has been a leader in this area with an energy efficiency scheme that, until the Coalition walked away before the last election, had bipartisan support. Ric Brazzale, managing director of Green Energy Markets, estimates the cleaner lights and appliances it helped install last year alone reduced demand by about 120 megawatts – the equivalent of a small power plant. Advocates want incentives for businesses to reduce production when necessary and to upgrade substandard equipment – think boilers, airconditioners, fridges and insulation. At a household level, the call is for greater support to install better whitegoods and battery packs.

Small steps can make a significant difference. Replacing old lights with LEDs, for example, can cut electricity consumption from that device by up to 80 per cent. Unanswered questions Better demand management will help, but it won't avoid the need for more generation. The big, unaddressed question is what will the response be when the next large coal power plant closes – and the next one after that, and so on. Australia has 23 remaining coal generators. As the federal government acknowledges, several more may shut over the next decade. According to modelling for the Climate Change Authority, all would need to be gone and replaced by cleaner technology by 2035 if Australia is to play its part under the Paris deal to keep global warming below 2 degrees. That notional deadline rarely gets a mention in public debate, but a campaign is in full flight for a bipartisan national energy and climate policy to set the pace for the transition to cleaner plants. Businesses are worried that ageing coal plants will otherwise continue to shut abruptly – Hazelwood's closure was announced just five months out – without there being time to build replacements. The federal government has rejected their preferred model, an emissions intensity scheme, and as has offered no alternative.

Reviews into electricity security (by chief scientist Alan Finkel) and climate policy (by the Environment Department) are under way, but the government is fundamentally divided on the need to do anything. It is hard to see where it lands. Nationally, the only significant large-scale policy designed to drive energy investment beyond this decade is Victoria's ambitious and contested renewable energy target, which aims to build enough wind and solar farms to deliver 40 per cent of the state's electricity needs by 2025. (The ACT has also a renewable target, but in other states the goals are purely aspirational.) The Andrews government has not said what it thinks the rapid growth in clean energy means for the Latrobe Valley's three remaining coal plants - Yallourn, Loy Yang A and Loy Yang B. The state opposition plans to abolish the renewable target if it wins power next year, but it hasn't said what, if anything, it would do in its place. It has hinted it may subsidise coal plants to keep them open. Loading Meanwhile, anyone hoping for an answer on what will keep the lights on in the longer term is left waiting.