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Solar panels, cooler summer drive power prices into negative territory in South Australia

Posted on April 28, 2021 by dishanth

South Australia’s high uptake of renewables has led to another national energy milestone, with record low daytime wholesale prices in the first three months of the year.

The Australian Energy Market Operator (AEMO) has released its latest quarterly report, which also found that negative spot prices reduced South Australia’s average quarterly price by $10 per megawatt-hour.

For the first time, the average cost of power per megawatt-hour during the 10:00am–3:30pm off-peak was regularly into negative territory in South Australia, at negative $12.

Wholesale prices reflect the price of power paid by electricity retailers to generators, and eventually have an impact on household bills.

“National Energy Market (NEM) quarterly average wholesale electricity prices fell sharply compared to recent first quarters,” the report stated.

Key points:

Daytime wholesale prices were consistently in negative territory in SA
That was driven by renewable energy, but gas generators were needed to help stabilise the grid
Wholesale prices across the country dropped in the March quarter

“This represents the first quarter – anywhere in the NEM – when the daytime average has fallen below zero on a consistent basis.”

Wholesale prices across the country fell, helped by a milder summer and increasing amounts of renewable energy generation.

South Australia’s energy mix includes significant generation from rooftop solar.

Despite prolonged periods of negative spot prices in Victoria, there was less trickle-through impact on average quarterly prices in that state.

According to AEMO, the biggest drivers of negative prices were high output from renewables and low daytime demand.

The reduction in South Australia’s wholesale prices came despite a small fire at the Torrens Island power station in March which caused a brief but significant surge in trading prices.

There was a fire at the Torrens Island power station in March.(ABC News)

The fire limited energy export capacity and contributed $14 per megawatt-hour to the quarterly average of $41.

“This sudden drop in gas-powered generation (GPG) output and availability, coupled with restricted transfers on the Heywood Interconnector, as well as low wind and solar output, contributed to the trading price spiking above $5,000/MWh for three hours,” the report said.

With the output of the Barket Inlet and Torrens Island power stations reduced as a result of the fire on March 12, batteries stepped in to dispatch power.

South Australia has been at the forefront of solar uptake, but the growth of renewable energy sources in South Australia has placed pressure on gas-powered generators to stabilise the grid.

“Persistently low electricity prices below their cost of generation required AEMO to direct South Australian gas-powered generations on for system security for a record 70 per cent of the quarter,” chief markets officer Violette Mouchaileh said.

Violette Mouchaileh says gas generators have had to stabilise the system. (AEMO)

Big generators are compensated when the cost of generation is greater than the price being offered by the market.

On Tuesday, the Australian Energy Regulator slashed the Default Market Offer (DMO) for customers in states, including South Australia.

The DMO is “the maximum price an electricity retailer can charge a standing offer customer each year” and is intended to protect consumers from price gouging.

In South Australia, the DMO will be cut by $116 for the upcoming financial year.

Source ABC

Twin peaks: South Australia reaches 100% solar, and then 100% wind power in same week

Posted on October 21, 2020October 21, 2020 by dishanth

It was a big week for South Australia last week. First, as we wrote at the time, the state reached 100 per cent solar power (of state demand) for the first time on Sunday, October 11.

Then, just a few days later, the state reached 100 per cent wind power (of state demand), on Thursday, October 15.

This was not the first time for wind, as it occurs reasonably often and for sometimes lengthy periods, but the fact that the two events occurred within days of the other are nevertheless important milestones. And although the transition to clean energy is far from complete, it does give some insight into what the state Liberal government’s target of “net 100 per cent renewables” by 2030 might look like.

It also came in a week when the state premier and energy minister formally opened construction of two significant projects in and around Port Augusta – including the country’s biggest wind-solar hybrid plant (317MW), and the 86MW second stage of the Lincoln Gap wind project, which is expected to grow to a total of 452MW.

We are indebted to Glenne Drover, from the Australian Institute of Energy, for noting the twin milestones and posting it on LinkedIn a few days ago.

It comes in a spring full of renewable energy and other records, at state and national level. The share of both wind and solar is reaching record levels, the share of renewables is above 30 per cent for the first time, and new minimum demand levels are being set in South Australia and Victoria, reflecting the growing influence of rooftop solar.

The commentary on Drover’s his post made for fascinating reading, and an insight into the state of the energy debate in Australia, and elsewhere for that matter.

It ranged from the those who moaned that solar couldn’t provide 100 per cent of the energy supply for 24 hours (apparently the sun goes down every evening, who knew?), to the energy trader from Shell who celebrated that gas also delivered 100 per cent of the state’s demand at one point (well, it didn’t quite, but nearly).

AEMO chief executive Audry Zibelman put it in some perspective, noting that the combination of rooftop solar (992MW) and large scale solar (313MW) fuelled the state’s electricity needs for a 30-minute period, a first in Australia and for any major jurisdiction globally.

She said the milestone affirms the world-leading scale and pace of transition underway in Australia’s power system.

“The domination and successful integration of rooftop solar in South Australia foreshadows the rebuilding of jurisdictional power systems in Australia,” Zibelman said in an emailed statement.

What the state will need is a lot more storage – either in the form of big batteries, virtual power plants or the numerous pumped hydro plants that have been mooted, but appear stuck in regulatory and policy limbo.

The case for storage was undermined by AEMO’s Mike Davidson, who in a comment on the LinkedIn post noted that “storage is next”, and also pointed to the key role that wind and solar played in keeping Victoria’s Portland smelter running when the main link between Victoria and South Australia was blown down in a storm earlier this year, and Victoria’s biggest load was hanging on to the end of the S.A. grid.

By Giles Parkinson, founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

Source: Renew Economy