Australia puts the brakes on wind

Wind power, seen as inherently evil by our national government, was in danger of taking over in South Australia. So something had to be done to slow it down, right?

How about if the wind blows strong providing cheap power we mandate that the gas must be turned up as well, so the wholesale price goes up instead of down?

It seems absurd, but that is what has been done.

Giles Parkinson has the story in New back-up rule means end of cheap wind power in South Australia.

Previously when wind output was high, prices in the state fell, even went into negative territory. Ross Garnaut said that:

    in the year after the closure of Northern coal generator last May, the price of wholesale electricity power was often below zero for the 12 per cent of the year when the wind blew hardest.

    “The average price over this time was minus $29 per MWh…”

Under new rules introduced quietly last December by the Australian Electricity Regulator (AER) the outcome would have been very different. For six months the wind has been unusually low. But:

    on Tuesday morning [last week], when the wind output jumped above 1,100MW the actual price of wholesale power in South Australia was above $150/MWh, with some 500MW being exported to Victoria.

On the previous day when the output of wind was consistently above 1,000MW, the average price of wholesale power in South Australia was more than $130/MWh.

The new requirement, now implemented by the market operator AEMO, requires three gas units to run when wind production is up to 1200MW, and four gas units when it is more than 1200MW.

    If four gas units cannot be engaged, then excess wind power above 1200MW is curtailed, as occurred on Monday. Previously, it had advised that just two gas generators were needed, but [AER] appears to have taken a security-first approach.

Garnaut says that previously:

    when the output of renewables is particularly weak and demand strong, the peaking gas generators come into play and push prices higher. In South Australia in the year after the closure of Northern {coal-fired], these conditions ruled for 35 per cent of the time, when average power prices were $171/MWh.

Now there will be little relief when the wind is strong.

The argument apparently is about synchronous power and grid security. South Australia has only wind and gas, plus some rooftop solar during the day. So the argument is that when variable power dominates you need to turn up the gas.

Yet one would have thought that if this was a problem it would have appeared during the previous year. Just to recap, in September when the lights went off pylons had been blown over by a big storm, causing a voltage drop. The Heywood connector was running at 95%, so there was a surge causing it cut out to protect itself. That would have happened no matter what was connected to it, wind, gas, coal or hydro. In the subsequent cold start, wind actually came on board before gas.

When wind was curtailed last Monday, AEMO dropped off the most expensive wind first. If this happens too often, we could have wind farms closing down while others are starting up.

You will note that on Monday last week power was exported to Victoria. Since Hazelwood closed Victoria has moved from net exporter to net importer of power. Angela Macdonald-Smith in the AFR tells how the eastern seaboard markets have been reshaped. Queensland now gets to run its coal and gas stations at higher levels (its rooftop solar is typically greater than SA’s wind during the day) and almost never draws power from NSW. NSW almost continuously exports to Victoria, which is still typically passing power on to SA.

So Queensland has become the backstop to the whole system. Tasmania hangs off the end, using mainly hydro and wind.

I don’t know, but I’m guessing that gas is cheaper in Queensland than in SA. Queensland has announced that it will revive its mothballed 385 megawatt Swanbank E gas power station from 1 January 2018 to help out. Qld also has other plans to boost renewable energy, but on current pricing, it has instructed its power generators to stop gaming the system with peak pricing, and has taken a lower dividend from its outrageously profitable government-owned transmission network. This has become possible because of increased coal and coal-seam gas revenues.

Parkinson has written about How the far Right have hijacked Australia’s energy policy. My worry is that the Commonwealth government has hijacked the electricity system. It is supposed to be run ultimately by the Australian Electricity Commission which answers to COAG where the Commonwealth has one vote. The cynic in me suspects that the change of rules by AER was initiated by the Commonwealth to put the brakes on wind, and then blame it for the higher prices.

Clearly too, using more gas is not the answer, because both price and supplies are tight, climate considerations aside. Turnbull can use regulation to limit exports, but he can’t control the price.

Of great interest in this regard in AGL’s $300 million plan to set up a gas import hub to supply the southeast. An announcement on the site is expected this month.

    While the gas wouldn’t come cheap – some say at least $10-$11 a gigajoule – reports of some manufacturers being offered $15-$20/GJ suggest the economics could work despite initial scepticism.

This could put a lid on prices, while more solar plus storage is developed.

Finally, we’ve just received our quarterly electricity bill. Fixed charges have gone up very marginally, but the price of electricity used was marginally lower. As to next year, I’ve checked with our retailer, and the Queensland government public statement that prices here would rise by about 3.5% was confirmed. At the same time Senator Canavan says the Northern Development Fund has before it a proposal to spend money to build a new coal-fired power station in the north of the state. This can only increase prices and probably use taxpayer money to build what may well become a stranded asset.

20 thoughts on “Australia puts the brakes on wind”

  1. A few comments:
    1. Solar tower power stations with molten salt heat storage and backup molten salt heating have the same operating characteristics as coal fired power stations so it may make sense to get on with building some of these as part of the renewable mix.
    2. You can get to a point where you spend an enormous amount of money trying to avoid a short, relatively local blackout every few years. Perhaps it would be worth doing the sums and asking the public just what trade-off they want. A few who really care may be better off paying for some battery storage to increase security others may be willing to have more of there power as controlled power in return for lower prices. (Ditto how much variation in frequency is acceptable.)
    3. Any politician who specifies a 1:1 storage/windpower ratio doesn’t know what they are talking about. I have no idea how much storage is needed but it certainly isn’t something as simple as 1:1 and kWh storage is not the same as kW power production.
    4. Our crazy spot market is pushing up the cost of power.
    5. We should be pushing power producers to get/develop the technology to make the system better able to hadle variable power.

  2. John, re #1 – Solar tower power stations with molten salt heat storage – you have a turbine, so how difficult would it be to add gas-firing to the turbine as backup to the backup? Is this what BilB means by hybrid solar?

    Re #2, the February SA blackout was a garden variety blackout of a few suburbs for a short time. During the storm season in SEQ we have such blackouts frequently, and they often take well into the next day to fix. The hysteria was ridiculous.

    Re #3, I’m hoping that when the management structure changes of the NEM recommended by Finkel are implemented we’ll get better decision-making. I meant to do a post on the management changes, and still might if I get time.

    Re #4, I think the biggest factors affecting prices now are (1) the cost of gas, (2) the uncertainty of policy and (3) the erratic and irrational statements being made by politicians responsible. Also, I think everyone in the chain – generators, transmitters, distribution networks and retailers – are doing quite nicely, hoping that someone else will get the blame.

    Re #5 – technology for more stable power – my impression is that the technology is available, and that AEMO under the Finkel review will be empowered to see that it is deployed.

  3. John

    Just briefly on#2

    Here in Gippsland our experience sounds similar to Brian’s. I haven’t kept records, but my estimate is a dozen blackouts per year. Some are very short, say 10 to 40 minutes. In stormy weather, more likely 2 to 4 hours. Naturally, we are well supplied with rechargeable torches and candles.

    It can be inconvenient if the power comes back on at 2am, causing lights and the not-switched-off TV to come back on blaring. We’ve never lost frozen food.

    Incidentally, we used to have about the same frequency of blackouts when we lived on a hillside bush block. In those days we ignorantly attributed the blackouts to gum branches or trees falling across power lines in storms, or lightning strikes. Not near many gum trees now; hypothesis abandoned!

    Brian: your word “hysteria” is apt.
    Get a grip, people.

  4. Brian: Solar towers run on a steam turbine just like coal fired power. These turbines are designed to take gas. The standby molten salt heating system in solar towers could be run on gas, oil, biofuels and other renewable fuels depending on what it is designed for. In theory, coal fired power stations could be converted to gas, biofuels etc after relevant furnace modifications but I am not sure how much stuffing around would be required.

  5. John, the fashion with solar at present is to have large banks of solar PV panels, which then must be backed up by batteries, pumped storage or a contract with a gas-fired station somewhere. I’d like to see a comparison of the economics of the two types of large-scale solar.

    Ambi, we live on the leeward side of Mt Coot-tha and seem to be protected from big storms, in the main. Also I think we are on the same circuit as a fire station up the road. Anyway for some reason we get a blackout probably once in 10 years, but during the summer there are standard announcements on local ABC about the number of consumers without power. It’s so common you hardly pay any attention.

  6. Good choice, Brian.

    We were on a ridge line at the edge of low hills, fairly well exposed to strong northerlies and the typical south-westerly storm front (cool change) that comes through as a high moves away to the east.

  7. So we got the power blackouts at our place: after all, someone has to do the hard yards!

  8. out in the backyard in a concrete bunker lest it set the dwelling on fire…., eh?

  9. From the link, the purpose of the battery is “to provide stability for renewable power being fed into the grid”. Danny Price explained to RN Drive that the purpose was not to provide 129 MWh of backup electricity, it was to make variable wind power synchronous and indistinguishable from ‘baseload’ power from fossil sources.

    Its important characteristic is that it is dispatchable on a second by second basis, which pumped hydro is not.

    So when Josh Frydenberg gets into a pissing contest as he did today with his pumped hydro, he’s either ignorant or intentionally talking through his *rse. Being charitable, I think it’s probably the former.

  10. Thanks Brian

    Yes, coal fired or hydro can be regulated on a minute by minute basis, but not second by second.

    As wind is gusty, a very small wind vane will have quite variable speed; doesn’t matter at all if it is used to pump water on a farm.

    The huge turbines on wind farms have inertia on their side, reducing the variability of speed (hence power output) but tiny changes no doubt affect the synch when trying to deliver 50 cycle power to distant customers.


    John, those increases are unprecedented surely? Market failure? Policy failure?

  11. The price increases are shocking. Tony Wood from Grattan, in the link, says four or five things have come together, but especially gas taking up the slack as old coal-fired plants close. He says:

    “The longer-term outlook looks a whole lot better but in the short term … it’s hard to see any relief from the situation we’re in.”

    Export of CSG from Gladstone took off from 2015. Finkel shows the movement of gas spot prices:

    Here’s Finkel on past and future wholesale electricity prices:

    Giles Parkinson said that one of the functions of the big battery, in addition to smoothing the flow, will be to smooth out peaks, hopefully destroy the spot market.

    Finkel sees prices pretty much flatling through to 2050, but Turnbull and Frydenberg may find a way of stuffing it up, as in building new coal and placing unreasonable constraints on SA wind. Also constraining gas exports may well push prices up.

    Danny Price says Snowy Hydro 2.0 will push prices up, partly because there will be a 30% energy loss in the process.

  12. Good discussion thanks. Just a correction wrt pumped hydro, can do second to second with variable speed generators and the generation units can do upto 82% energy return e.g.. 18% loss. Remember my link in discussion here a while ago to the new huge Swiss pumped hydro, it had all the specs. They also did a financial study and the upshot was that in the medium and short run it makes a loss but in the long run, with lots of cheap renewable energy available and high second to second backup energy prices it will make a good return.

    Personally I think there is a place for pumped storage, see my previous backing on here for our local one at Kidston. However, it would pay to do a cost benefit analysis for snowy 2.0 given the massive development costs imho.

  13. Ootz, I was repeating what Danny Price said. I guess when push comes to shove he’s an economist, but he may have been right about the specific projects being discussed.

    Frydenberg was quoting a Spencer Gulf project and Snowy Hydro 2.0 as ‘my backup project is bigger than yours’ and overtly trying to belittle the battery project. It was quite unseemly.

  14. Energy losses in cylindrical pipes depend (inter alia) on pipe diameter and pipe length. Perhaps the Swiss pipes are shorter and/or fatter?

    Viscous fluid, frictional losses, Poiseuille equation, etc.

  15. Ambi: Energy losses in pumped storage pipes would normally be negligible. Pump and generating turbine losses would be more important. Wikipedia had this to say

    Pumped storage is the largest-capacity form of grid energy storage available, and, as of 2017, the DOE Global Energy Storage Database reports that PSH accounts for over 96% of all active tracked storage installations worldwide, with a total installed nameplate capacity of over 168 GW.[3] The round-trip energy efficiency of PSH varies between 70%–80%,[4][5][6][7] with some sources claiming up to 87%.[8] The main disadvantage of PHS is the specialist nature of the site required, needing both geographical height and water availability. Suitable sites are therefore likely to be in hilly or mountainous regions, and potentially in areas of outstanding natural beauty, and therefore there are also social and ecological issues to overcome.

    The water problem can be overcome by using salt water . Water flowing naturally into the upper dam reduces the need for pumping and thus reduces pumping losses.

  16. Thanks John

    Your technical expertise is valuable.
    (I was thinking of a chart for backyard pump with garden hose, tiny diameter; foolish, as the diameter in hydro systems is nowhere near similar!!)


  17. Pumped storage is particularly attractive when the dams being used are already part of an existing hydro scheme. All you have to do is spend money on pumps that make the system less vulnerable to water shortages. Adding extra generators would provide extra peaking power without increasing water consumption.
    Hydro and battery energy storage both waste power. Ditto long power lines used to reduce the need for peaking power.
    It is worth noting that the need for storage or back-up generators can be reduced by strategies such as increasing the percentage of power that comes as “controlled power” avoid energy storage losses.

  18. Good points, John.

    Existing power lines at Snowy, and in Tassie for example.
    Currently [ 🙂 ] folk thinking about longer term employment/industry in the Latrobe Valley are looking at existing high voltage transmission lines from there to Melbourne, wondering about latching on to those to reduce capital costs.

    Some predictions have Loy Yang and Yallourn brown coal power generators, slightly cleaner cousins of Hazelwood, closing in the foreseeable future.

    The brown coal mine pits appear completely unsuitable for pumped storage, BTW.

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