I can’t make up my mind whether Malcolm Turnbull’s brains have fried, or whether he is just plain evil. I think of Godwin Grech, and think the former. My wife is convinced it’s the latter, and she’s usually right about people.
Anyway politics reached a new level of absurdity last week, as Scott Morrison brought a lump of coal into the parliament, which ended up between a crazed Barnaby Joyce’s legs, while in Question Time Turnbull’s answer to every question about the omnibus bill to change social security entitlements (and save a heap of cash) was to rant about Bill Shorten, blackouts and dreaded renewable energy in South Australia.
All the while, fossil fuel generators are gaming the system, to extract more from electricity consumers, while the market regulator ends up splitting the profits.
Two politicians from South Australia, Premier Jay Weatherill and Energy Minister Tom Koutsantonis, are very angry, and they’ve had enough.
South Australian blackouts
To the great joy of Malcolm Turnbull, South Australia had a blackout affecting about 90,000 homes and businesses for a short time, with blazing heat and the wind dying off to supply only 2.5% of the power. You can read an account from the ABC, or here, sourced from AAP, listen to ABC RN’s PM segments here and here, catch Giles Parkinson’s comments at RenewEnergy, catch it on the 7.30 Report or read about what they plan to do.
This is what I gather happened.
If you watched the ABC TV news on Tuesday evening you knew that last Wednesday was going to be very hot in Adelaide and surrounds, and the demand for electricity was likely to be a record. Contrary to what we are led to believe, it is the Australian Electricity Market Operator (AEMO), not the SA government, who is responsible for seeing that enough electricity was available.
If they knew anything about the weather, they would have known that the wind often drops towards sunset.
Whether they got their calculations right we don’t know, and probably never will, because they supervise themselves. We do know that as the day proceeded they put out a request for extra energy and got no bids. They then approached the Pelican Point gas generator (owned by Engie), who only had one of two turbines operating. AEMO had the power to make Pelican Point turn on the gas, but it was too late. It takes 3-4 hours apparently for a cold start, even if they move heaven and earth.
The SA Government also has the power to make Pelican Point fire up in an emergency, which the loss of power to a small proportion of homes and businesses is manifestly not. Anyway, it would also have been too late for them to act.
I believe the wind energy dropped from 1000 megawatts per hour to just 100 MWh. And that is the same amount that AEMO couldn’t find – just 100 MW. I think the blackout started at 7.03 pm, lasted about 40 minutes in all, (see Hugh Saddler’s report), and comprised a series of rolling disconnections of blocks of consumers, known as “load-shedding”. In fact, it was not a big event, but it was the third SA has experienced since the big one in September, when the storm blacked out the whole state.
The SA Government says that this kind of thing has only happened recently since the particular officer in AEMO who looked after South Australia sadly died. The new bloke is simply not up to the job, they reckon.
So why wasn’t the second turbine at Pelican Point operating? Apparently it has scarcely operated at all since the big problem with peak prices last July. The price of gas being what it is, they can’t compete with the other power sources available. In order to fire up occasionally they need to buy gas on the spot market, and it doesn’t make sense. Oddly enough, gas producers are complaining that the price of gas is low, not high.
Richard Dennis has interesting things to say about gas (frist published in the AFR). This doesn’t do him justice, but when there is already too much gas in the world, who will invest in gas?
Thankfully on Thursday, which was just as hot, AEMO got its act into gear and Pelican Point was fired up in time. Weatherill predicted, they won’t make the same mistake twice, and they didn’t. AEMO was also ahead of the game in NSW on Friday, not without a hiccup, of which more later.
So how did we get to this situation?
Apparently the story of wind in SA is not the ideological frolic on the part of the SA government alleged by Turnbull. In fact SA is simply one of the best places in Australia to build wind farms, because that’s where the wind blows. No doubt the SA government assisted with planning approvals and smooted the way, but the financial incentives came from the Commonwealth RET scheme. So the actors were the Commonwealth Government, AEMO and the corporates, not the SA Government.
What will SA do?
Weatherill and Koutsantonis are clearly fed up with being blamed when they are virtual bystanders. They are promising to take dramatic action, which we’ll hear about when they are ready. At the limit, it could involve nationalisation. It seems to be wrapped up with their tender for 75% of the states power needs, currently under review, and is said to involve a new gas-fired power station.
The SA government has also been encouraging rooftop solar.
Simon Evans wrote in the AFR how Bruce Wood, self-described “grumpy old prick”, enjoyed a beer with his son while the street was blacked out, because his son Richard’s newly-installed home battery storage system worked while the rest of the street was without electricity.
Richard had just installed a new Zen Energy hybrid solar and smart battery system, researched by retired dad Bruce, who lives a few streets away, and whose lights went out.
What happened in NSW?
In NSW there was a kerfuffle about turning off the potlines in the Tomago aluminium smelter. Tomago is the biggest consumer of electricity in NSW, accounting for 10-12% of the market.
AEMO had warned electricity generators that there may be excessive demand from 3.30 to 5.30pm. Then it calculated a specific shortfall of 189 megawatts from 5 to 6pm, calling for a “market response” and saying it would intervene “as required”.
What AGL did was curtail the power to Tomago, making it shut down each of its three potlines for one hour and 15 minutes in sequence, saving I understand 300MW, more power than AEMO had required. This curtailment started at 3.45pm and lasted three hours and 45 minutes.
This is actually serious stuff, apart from the loss of production. If the pots are turned off for too long, I think about three hours, they freeze up, as happened at Portland last December, when 200 pots froze during a power outage reducing the smelter capacity to one third.
Greg Hunt and Victorian minister Wade Noonan flew to New York, cheque books in hand, to beg the bosses to keep the Portland smelter open. It has cost taxpayers around $240 million so far.
Secondly, Tomago had to send out workers to restart the pots in temperatures about 10 degrees above ambient temperature. This is a process that plays out over some days on a 24-hour basis, requiring about 80 staff at a time.
AGL put out a spiel about such curtailments being ‘normal’ and about how keeping up supply to homes, businesses and schools (who had no doubt checked off for the week) was their first duty. The suspicion is that AGL was selling electricity thus saved on the spot market, which hit the limit of around $14,000 MWh that afternoon.
However, the breaking surprise is that solar and wind actually saved the day in NSW as coal and gas went missing:
- solar (rooftop and large scale) was contributing more than 1GW to the grid during much of the day, and around 500MW in the late afternoon on Friday when the Australian Energy Market Operator had flagged the possibility of rolling blackouts.
The strong performance of wind and solar came despite the loss of more than 1GW of capacity of coal-fired power and the sudden withdrawal of two of the biggest gas fired generators on Friday afternoon – at the height of the heatwave and supply-demand crisis.
They got due credit from the state minister, but no such recognition from Canberra.
Scamming the system
A scam has been going on for years by fossil fuel generators especially in the eastern states. Have a read of Giles Parkinson in High energy prices? Blame fossil fuel generators, not renewables. Start with the basic fact that price spikes are happening 40 times more often in Queensland, where most of energy comes from coal, than in SA.
Parkinson uses a NSW example of how it’s done:
- According to the AER, there was a network constraint on the border between NSW and Victoria. These constraints are imposed when there is a risk of a network overload, and because of the way the constraints work, it means that the generators in NSW act as sort of “gatekeepers”.
If they increase generation, then it forces the Victorian generators out of the market, reducing competition.
The NSW generators then “rebid the ramp rates” of their generators down to the minimum allowable by the rules ensuring that the Victorian generators were kept out of the markets for as long as possible.
This creates short-term peaks in demand (“spikes”) which they supply at spot prices.
AER, the regulator, is supposed to investigate price spikes over $5000/MWh. It seems they don’t investigate each one. However, the regulator only enforces the rules, and the above appears to be happening within the rules. Where a penalty has been imposed it has been less that the profits made, meaning the regulator effectively splits the loot.
What happened in Queensland?
I’ve inserted this section just before publication, because of a phone call from my brother, who lives about 10km from here. We had truly godawful heat on Sunday, then overnight was a stinker, and Monday cooler, but still hot. Our lights stayed on. They haven’t been off for years. I think that might have something to do with the fire station nearby.
It seems that there were rolling blackouts throughout SEQ for about three hours from about 8pm on Sunday night. As people came home the house was like a furnace, so they cranked up their airconditioning and kept it up. The blackouts were not caused of a lack of capacity, it would have to be because AEMO underestimated demand. Some it seems had two periods without power. Probably a million people affected. The stunning thing is that there was nothing in the news about it. Nothing. At. All.
I Googled tonight for Qld blackouts only find stories about SA blackouts, and some in NSW and Victoria, which mentioned Queensland in the text. Persisting, I found this Energex site, where if you have power you can find out that your power is off. Yes, I do know about smart phones, battery powered tablets and such, but we live without them. At 10.48pm tonight, Monday, there were 1644 customers without power. We’d had a few storms through early in the evening, but nothing unusual. Basically it’s not news, although such events often get a fleeting mention on ABC radio.
So where are we?
Lets get one thing straight. SA doesn’t amount to much in the national grid. When I checked at 11.40 am on a hottish day in Brisbane (Sunday), this is what was happening:
There was more coming from rooftops in Qld than the entire power usage in SA. This highlights the potential of rooftop solar with battery storage to solve these heatwave peaks. An Adelaide company is planning to commercialise CSIRO technology that uses molten silicon rather than lithium to create batteries. The firm is called 1414 Degrees to denote the temperature of the silicon:
- Chairman Kevin Moriarty says 1414 Degrees’ process can store 500 kilowatt hours of energy in a 70-centimetre cube of molten silicon – about 36 times as much energy as Tesla’s 14KWh Powerwall 2 lithium ion home storage battery in about the same space.
Put another way, he says the company can build a 10MWh storage device for about $700,000. The 714 Tesla Powerwall 2s that would be needed to store the same amount of energy would cost $7 million before volume discounts.
That is as may be. Not all great ideas make it in the market. However Tesla and others are already there.
Tesla is also entering the large-scale market by simply linking a string of refrigerator-size units on a concrete slab anywhere. They’ve just stuck 396 together in the Mira Loma project in California, capable providing electricity for 15,000 homes for four hours. manufactured, shipped and installed in three months.
Still a bit expensive, but no doubt cheaper than $14,000 MWh spikes, and much more easily dispatchable than cranking up gas, whose reputation as a quick-fire solution to peaks has taken a hit.
There are plenty solutions available.
I think everyone has been blind-sided a bit by the hot weather this summer, the way gas availability and prices have affected the system, the seemingly chaotic closure pattern of coal stations, and the behaviour of corporate players. The SA government also believe, with some reason, that the operator, AEMO, has stuffed up, but will always sheet the blame elsewhere.
What we need at this point is a calm and rational Prime Minister, willing to bring the necessary players together to formulate a way forward. What we have is a PM and a raving pack of senior cabinet ministers advocating for the coal industry, unmasked by Lenore Taylor (thankyou Ootz), while accusing the states and Labor of going on an ideological green frolic. And dropping the ball on climate change mitigation almost completely.
We now know that the Government was told by the public service that renewables had nothing to do with the SA power blackout in September, yet Turnbull and others chose to tell the public the opposite.
Laura Tingle and Mark Ludlow’s article in today’s AFR quotes Senator Sinodinos on Insiders saying relatively sensible things. For example:
- “What’s needed to be done is we need to calmly sit down, work our way through those issues. This is not an attack on renewables or coal, this is about getting the best energy mix at an affordable price which reduces greenhouse gas emissions. We have an energy security plan we are putting together to help us address those.”
The Government has commissioned a review of the National Energy Market and associated policies by Chief Scientist Alan Finkel. How much he will compromise to write an acceptable report we don’t know. We do know that the government wants a future for coal and gas, and wants to slow climate change action to a crawl. As Bernard Keane says, Malcolm Turnbull’s conversion to denialism is the sweetest victory of all.
Sophie Vorrath reports that Finkel is already being attacked by the lunar right of Alan Moran, Andrew Bolt and Tim Blair. Amazingly, she also reports that Turnbull denies saying the September blackout was cause by anything other than a storm, and denies criticising renewables.
“Let me be very clear, of course windmills did not cause a blackout, the blackout, as I have said many times, was caused by a storm breaching transmission lines. That is perfectly obvious. That is the only point that was made.” (Emphasis added)
So that headline back then Malcolm Turnbull says South Australia blackout a wake-up call on renewables and Daniel Andrews slamming Turnbull’s stuff as “ignorant rubbish” was “a classic case of misrepresentation by the Labor party and by the left generally”.
Take your pick, or it could be both, fried brains and evil, but sad for the country.