Tony Wood, from the Grattan Institute: "Get a few blackouts in Sydney and we will be more sensitive." Photo: Louise Kennerly
Businesses will be asked to send central business district office workers home during heatwaves, and city residents will be offered cash to form solar panel collectives, in a desperate bid to reduce electricity demand with ageing cables predicted to fail by the summer of 2018.
Any new buyer of power company TransGrid, under the Baird government's privatisation push, faces a $430 million repair bill to build a new cable to supply electricity to inner Sydney.
Without it, the city risks blackouts that stop trains and traffic lights and paralyse business.
TransGrid will outline the problem facing the city to a meeting of stakeholders, including business groups, councils and consumer representatives on Friday.
''It is quite challenging,'' TransGrid general manager of strategy Greg Garvin said.
The company is assessing whether a massive effort to reduce energy use in the city during ''peak loads'' could delay the need to replace the cable, but it has warned regulators an efficiency drive of this size in a city has not been attempted before and may not work.
The CSIRO will present a report on the CBD's ''energy efficiency ecosystem'' to the meeting. The biggest drain is commercial users and high-rise apartments, and getting owners to upgrade their airconditioning systems would be the quickest fix, CSIRO energy modelling expert Luke Reedman said.
TransGrid is prepared to pay cash to businesses that agree to turn electricity off during heatwaves, or to groups that can generate electricity locally within inner Sydney, Mr Garvin said.
The City of Sydney is already pushing the use ''trigeneration'' – or mini gas-fired powerplants – in the city.
Another solution being examined by the NSW government is lowering the electricity reliability standard for the city, Mr Garvin said, but he added this was ''a political decision''.
The present standard means the failure of two parts of the network would result in a customer interruption of less than an hour.
With 13 of 16 cables under the city reaching the end of their life, and one of two larger 330-Kilovolt cables already damaged by heat, is it expected the city soon will not meet that standard.
But Tim George, an engineer with DigSILENT Pacific, warns that lowering reliability standards so that maintenance is cheaper leads to more blackouts.
''If you have a whole lot of city office blocks losing power the consequences are severe,'' Mr George said.
The New Zealand government's failure to replace ageing cables in Auckland led to a six-week blackout in 1998, he said.
The Grattan Institute's Tony Wood said there was no evidence that privatised companies spent less on maintenance or had worse reliability than government-owned electricity networks.
But Mr Wood called for reliability standards to be removed from state government political interference, and set by an independent regulator.
Government ownership had led to ''wild swings'' of under-investment and then over-spending on electricity infrastructure, as politicians either ''milked'' electricity companies for dividends or reacted to voter concern about electricity prices.
''Right now we have sensitivity about prices, but you get a few blackouts in Sydney and we will be more sensitive about reliability,'' Mr Wood said.
TransGrid's Mr Garvin said: "We will make sure we build that cable if we need to so the lights don't go out."
TransGrid has slashed its infrastructure spending by a third, and delayed $600 million in upgrades, because of the potential impact on household power bills.