The April-May update tells us:
- The capacity of large-scale solar generation supplying the National Electricity Market tripled between March and early May.
- South Australia became a net energy exporter for the first time in March, selling the state’s abundant wind-generated power into Victoria.
- NSW coal-fired power stations have been consistently at 65% capacity despite three closures and speculation over Liddell, with imports switching from Victoria to Queensland post Hazelwood.
“Four new wind farms and eight grid-scale solar farms came online between March and early May, with a total capacity of 1,030MW,” said author and energy expert Hugh Saddler.
“The 500MW of solar generation will almost triple the grid-scale solar capacity of the NEM in just three months.
“This demonstrates that the cost advantage wind had over solar has been reduced and we can now expect new capacity to be a mix of both technologies.
Here’s the generation by fuel type:
We can see that black coal has made a bit of a comeback since the election of Abbott-Turnbull. The mix between the renewables is better seen here:
Large-scale solar has barely started, but the report suggests that it will figure more prominently in the future. Monitoring the interstate interconnectors is instructive:
South Australia has tipped into becoming a net exporter to Victoria, which is stunning. Victoria and NSW are now in balance, but the flow from Queensland to NSW is significant and increasing. The following graph shows, as I’ve said elsewhere, that gas is being used most in Queensland and SA, and is plays a large role in balancing the grid.
The problem child, however, is NSW where the update notes that coal-fired power stations have been consistently at 65% capacity. The AFR published an article on the weekend – Energy grid in crisis as winter power outages hit.
- Australia’s biggest aluminium smelter was bracing on Friday night for a third power disruption in four days, as a combination of cold weather, planned and unplanned power generation outages created a shortage of supply and sparked fresh calls for reform of national electricity market.
Potlines at the Tomago aluminium smelter in NSW were taken offline on Tuesday and Thursday because of power shortages, and the smelter’s management was advised by its power provider AGL Energy on Friday of a potential similar squeeze on Friday evening amid warnings from the Australian Energy Market Operator (AEMO) of a “lack of reserve”.
This was not meant to happen in winter. Tomago took a potline offline for 45 minutes on Tuesday, and two of its potlines offline for an hour each on Thursday. After that it takes three days to return the molten ore to a thermally stable state.
- The Australian Energy Market Operator said a combination of factors had created the supply squeeze in NSW, which saw 3800 megawatts of generation become unavailable in the network on Thursday and earlier in the week.
After a busy summer period, some big coal-fired generators were locked in for planned maintenance, with about 1200 MW out of action.
But another 1300 MW of unplanned shutdowns, combined with reduced capacity from other generators and some players choosing not to bid into the wholesale market, led to the shortfall which caused spot prices to soar.
At one stage, three out of the four plants at AGL’s Bayswater power station in the Hunter Valley were out of action, while AGL’s ageing Liddell generator, controversially slated for permanent closure in 2022, was operating at a reduced capacity.
Tomago Aluminium CEO Matt Howell is not amused. He wants coal, saying no smelter anywhere in the world runs on wind and solar backed up by batteries. I’m amazed that these people don’t know about pumped hydro or molten salt. A few weeks ago the owners of Victoria’s Portland aluminium smelter said renewables and battery storage would not alone be able to power the smelter when it power contracts come up for renewal in 2021.
Part of Tomago’s problem is that when it signed the agreement with AGL back in 2010 they did not foresee the current state of affairs. They allowed interruptability in the contract to save them from spot prices. However, the current fragility in the market which is in danger of becoming the norm was then rare.
As Giles Parkinson said, the recent troubles have been all about coal, so the Murdoch press did not fire up as it usually does if renewables are involved.
All this came just after the energy bosses clashed with Josh Frydenberg on intervention. Ausgrid, Transgrid, online retailer Powershop and others have been complaining about intervention by government and regulators. It’s the scrapping of the Limited Merits Review, Snowy 2.0, threats of asset write-downs, and threats by the ACCC. Taken as a whole, they say, these interventions will inhibit investment, limit supply and in the long run drive up prices.
Sounds like business as usual, with leadership form government either lacking or wrong-headed.