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Revealed: the price we’ll pay for a wind-solar rich electricity system

19 May 2020

11:33 AM

19 May 2020

11:33 AM

Australian Energy Market Operator CEO, Audrey Zibelman, has foreshadowed the possibility of Australia reaching 75 per cent renewable energy in its electricity supply.  In doing so, she quite rightly says, the “AEMO does not underestimate the extent of work that will be required to successfully adapt the NEM”. 

Intermittent wind and solar after 20 years of government support still require subsidies, on-charged to electricity consumers.  This is in spite of the market — pre-COVID-19– having seen a great jump in wholesale prices. Costs aside, there is the inherent intermittency problem that brings unreliability in wind/solar dominated systems.   

There are endless new ideas about how to make renewable energy from wind and solar, and now hydrogen, supply low-cost electricity reliably 24/7, but no solutions are presently available.  

The “islanding” of the South Australian system for nearly three weeks from January 31 to February 17 this year demonstrated the effect of not having such solutions.  South Australia’s isolation required AEMO to limit the state’s non-dispatchable and non-synchronous (wind/solar) generation from 90 per cent of the total supply to less than 50 per cent at any time, and to force expensive gas-fired generation into service. The cost was some $200m, most of which was passed on to consumers.  

For the week before to the islanding of the state, dispatchable fossil-fuel (gas) generation in South Australia never supplied more than 20 per cent of total South Australian demand.  Intermittent wind and solar generation comprised 80 to 90 per cent of local South Australian generation.  Surplus wind/solar was exported to Victoria but, at times of near-zero wind and solar, the state relies on up to 50 per cent of coal-fired generation from Victoria.    


South Australian generation by source for the week of 20/01/20 is shown below.

For the three weeks when South Australia was “islanded” from Victoria, AEMO had to maintain system security and frequency and voltage control. Its only option was to curtail wind and solar, and direct expensive gas-fired generation into service. The resultant generation mix is shown below for the week commencing 3rd February.   

The visual representation of the week’s generation sourcing in the islanded SA system, compared to the week prior to the islanding is what the “fully-islanded” NEM would face if all the coal-fired stations were closed. 

South Australia is just seven per cent of the interconnected five-state National Electricity Market.  It is reliant on the interconnections with the other states for 24/7 dispatchable generation support.   

The three-week “islanding” of South Australia demonstrates the huge cost of such an electricity supply system, where coal-fired generation has been shut down.  The publicised direct costs of intervention to maintain minimum security of supply in the islanded South Australia were $200m for just three weeks.  This is for a region comprising a mere seven per cent of the National Market. The costs are equivalent to $50 billion per annum for the whole of the National Market if all coal-fired generation was retired and replaced by wind and solar with gas as backup.    

This three-week “islanding” of South Australia, demonstrated the real limitations for Australia to meet excessive near-term renewables targets, let alone net zero emissions”. Without nuclear power generation and much more hydro capability than Australia currently has, until new technologies can be proven capable of economically “firming up” intermittent renewables, low-cost coal-fired dispatchable generation will be an essential part of Australia’s electricity supply. 

The fragility of excessive wind and solar was illustrated by wind/solar generating more than 80 per cent of the state’s electricity on many days, such as just over 10 days ag0 May 6, when three days earlier could barely provide 20 per cent.  But, in addition to obvious shortcomings of windless periods, the events of February 2020 also demonstrate that a system cannot operate with too much wind and solar.  Present technologies require at least 40 per cent supply by synchronous generation fossil fuels, hydro or nuclear 

Trevor Charles St Baker AO is director of the St Baker Energy Trust, chair of Delta Energy, founder and deputy chair of ERM Power Limited and a board member of the Energy Policy Institute of Australia. 

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