Panic Hits South Australia: Wind Power Debacle Sends Power Prices Through the Roof

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South Australia’s witless Labor government is in a state of full blown panic.

Since the closure of Alinta’s Northern and Playford power stations at Port Augusta, peaking power operators (using highly inefficient Open Cycle Gas Turbines or even diesel generators) have been gouging SA’s crippled power market, every time wind power output collapses.  The spot price quickly rockets from around $70 per MWh to $2,000 per MWh and, towards the end of each 60 minute trading period, often hits market cap – previously $13,800, and from 1 July $14,000, per MWh (see our post here).

Only a few months ago, Labor Premier, Jay Weatherill was in Paris spruiking up SA’s wind powered credentials; and cooing about his plans for a 50% Renewable Energy Target.

That was then, this is now.  His distraught Energy Minister, Tom Koutsantonis is at wits end, as he attempts to placate furious business leaders faced with rocketing power prices and routine load-shedding and blackouts.

While the wind cult are working at fever pitch to throw a lid on the calamity that is South Australia (blaming everything but the obvious target for the disaster), mainstream media are finally cottoning on to the greatest energy disaster in Australia’s history.

Late to the party is The Australian’s Michael Owen.

Once upon a time, The Australian was at the forefront of uncovering the greatest economic and environmental fraud of all time.  However, after American wind and Open Cycle Gas turbine maker, GE threw $millions at The Australian back in late 2014 for an advertorial campaign headed “Powering Australia”, its editorial line shifted; apart from pieces written by external commentators – like Keith De Lacy, articles critical of wind power became a rarity.

With the disaster in SA now impossible to cover up, The Australian, among others, has started unloading, as follows.

Rush to wind forcing power prices up, say SA Liberals
The Australian
Michael Owen
15 July 2016

Wind power is driving base-load electricity providers out of the market, SA Liberals say.

The traditional manufacturing state of South Australia, with the worst jobless rate in the country, is paying the highest ­prices in the national electricity market.

South Australia’s lack of access to low-cost coal, an exposure to higher wholesale gas prices and an absence of competition in conventional power generation was to blame, analysts said.

The state’s Liberal opposition has pointed the finger at the Labor’s government’s “overzealous rush into wind power” that it said was driving base-load electricity providers out of the market, pointing to the closure this year of the coal-fired Port Augusta power stations.

Soaring electricity prices in South Australia have seen up to 10 major manufacturers, including BHP Billiton, Arrium and Nyrstar, approach Treasurer Tom Koutsantonis to warn of production shutdowns unless the government intervened.

As a result, an extra 239 megawatts of power will come on line from today after private energy supplier Engie agreed to fire up a previously mothballed generator at Pelican Point, near Port Adelaide.

Spot power prices for South Australia have risen to more than seven times that of the Victorian price and almost eight that in NSW during the past week.

Mr Koutsantonis said yesterday the energy crisis had arisen because of a shortage of electricity being supplied to the state through an interconnector with Victoria, compounded by a planned outage at the Heywood Interconnector for upgrade work, higher gas prices and wild storms.

“A confluence of remarkable events has led to incredible volatility in the spot market over recent days, which has resulted in higher electricity prices and put pressure on South Australian businesses, some of whom have raised their concerns with me,” he said.

“Engie has brought additional generation at Pelican Point online after I approached them with the request. No amount has been paid to Engie to increase generation.”

Mr Koutsantonis said the situation was “another example of the failure of the so-called national energy market”.

The state had allocated $500,000 in last week’s budget for a feasibility study into greater inter­connection of energy supply between South Australia and the eastern states, and asked the federal government to assist, he said.

This came as South Australia’s unemployment rate surged to 7 per cent last month, well above the 5.8 per cent national rate.

Business SA and the opposition said a lack of power security, stability and price competitiveness would only lengthen job queues.

“If there are manufacturers that are considering South Australia and looking at another state where it is more cost-competitive, then they’re going to go there,” Business SA’s Anthony Penney said yesterday. “Businesses in this state, particularly our manufacturers, our energy intensive industries, have been telling us for a while that energy prices are getting out of control.

“Right now, renewables in South Australia make up over 40 per cent of the energy, without the technology to effectively store the power being generated.”

Australian Energy Regulator data shows power prices in South Australia during the next two years will be 34 per cent higher than the national average and 69 per cent higher than Victoria.
The Australian

Tom Koutsantonis might be gilding the lily with his comment that: “Engie has brought additional generation at Pelican Point online after I approached them with the request. No amount has been paid to Engie to increase generation.”

Back in February, Koutsantonis was cited by the Australian Financial Review in a story in which Labor was putting forward a contract worth $50 million, in order to secure a guaranteed supply of power from the Pelican Point power station: SA’s Wind Farm Fiasco: $Millions in Subsidies Thrown at GDF Suez to Reopen Mothballed Gas-Fired Power Plant (In the piece above the owner is referred to as ‘Engie’; the AFR article had the owner as GDF Suez – both of which are French and are probably related).

Tom shouldn’t be ashamed of throwing money at conventional generators to guarantee available capacity: “capacity payments” are part and parcel of trying to rely upon sunshine and breezes; guaranteed payments to conventional generators in order to ensure a meaningful supply of electricity are used by the Germans and the British, among others, adding $billions in unnecessary costs to power consumers, all for the sake of childish ideology.

Now, that ideology is about to catch up with the rest of the Australian States; with a vengeance.

Warning of energy crisis to hit the nation
The Australian
Michael Owen
16 July 2016

An energy crisis in South Australia created by an over-reliance on untrustworthy and expensive wind and solar will force the state Labor government to seek greater access to cheaper coal-fired electricity from the eastern states.

This comes amid rising concern that federal renewable energy targets will force other states down the path taken by South Australia, which has the highest and most variable energy prices in the national electricity grid.

South Australian Treasurer Tom Koutsantonis, who is also the Energy Minister, yesterday put the eastern states on notice, vowing to “smash the national electricity market into a thousand pieces and start again”.

He warned other states that the energy crisis was “coming to get them”.

“This is coming to Victoria, this is coming to NSW … every jurisdiction is facing what we’re facing now,” the Treasurer said.

South Australian Labor’s admission that it needed urgent reform of the national energy market rules, so that in addition to upgrading connection with Victoria it also could tap into NSW baseload power, reveals the vulnerability of its reliance on renewables. The last coal-fired power stations in South Australia closed in May.

Wind and solar make up more than 40 per cent of the state’s energy mix under a green policy agenda driven by Labor, in power in South Australia since 2002.

Several major companies, including BHP Billiton and Arrium, this week warned Mr Koutsantonis of possible shutdowns because of high energy prices, forcing him to plead for a temporary power spike from a private owner of a mothballed gas-fired power plant. Private energy supplier ENGIE fired up its Pelican Point plant near Port Adelaide for a short time yesterday, bringing an extra 239 megawatts of power into the grid.

Mr Koutsantonis said the federal government had encouraged South Australia, which has the best conditions for wind farms, to chase the energy source as part of Australia’s renewable energy target of about 24 per cent by 2020.

“Wind is paid by the commonwealth to produce power … if you are going to pay wind farms to produce electricity regardless of demand, you better make sure that is distributed equally across the country because you can’t have a national policy implicating just one state,” he said.

He called on Malcolm Turnbull to immediately appoint an energy minister and schedule an urgent meeting of federal and state ministers to undertake energy market reform.

“If you want a true national electricity market, you really need to have all of the states interconnected.

“What we have is a series of state-based markets with very poor interconnection between them,” Mr Koutsantonis said.

The market was supposed to integrate the east coast states with South Australia and Tasmania to allow the free flow of electricity across borders via a series of interconnecters, he said. It excludes West Australia and the Northern Territory.

An upgraded interconnecter with Victoria is scheduled for completion next month, and South Australia also wants a larger interconnecter with NSW, at a cost of between $300 million and $700m.

“Victoria has multiple markets it can draw from; we have one, NSW has two and Queensland has one. That’s not a national electricity market,” he said.
The Australian

Tom Koutsantonis’s vow to “smash the national electricity market into a thousand pieces and start again” sounds a lot like angry words from a desperate man.  However, Tom has a point.

While it is true that the cause of South Australia’s energy disaster is founded on Federal government legislation – the Large-Scale Renewable Energy Target – it was SA’s Labor government under then Premier Mike Rann which blundered headlong into wind power.

Rann and his family profited handsomely from SA’s wind rush.  Lured by hollow promises of a wind turbine blade manufacturing plant that would potentially employ hundreds, back in 2002, Rann and his co-conspirators jumped into bed with a band of criminals (we mean that literally), shysters and chancers associated with Babcock & Brown (aka Infigen): How a Band of Criminals, Shysters & Chancers Conjured Up the Wind Industry in Australia

Now, the consequences are hitting home.  And there is no way that Koutsantonis & Co can extricate themselves from the unfolding disaster.

Tom Koutsantonis talks about interconnectors as being some kind of saving grace for his beleaguered State.  However, Tom has more than just a little to learn about electricity generation and distribution.

Tom’s confused pitch seems to be that interconnectors actually “generate” power. They, of course, do no such thing. They are part of a transmission system; and don’t “generate” anything at all.

Funnily enough, it’s generators that “generate” power: transmission lines “transmit” power; and interconnectors work like plugs and sockets that connect high-voltage lines travelling over vast distances in one part of a grid to another, conveying large volumes of power produced by generators located hundreds, and sometimes thousands of kilometres away from the “load” aka “customers”.

When people like Tom Koutsantonis talk about throwing serious money at the construction of an interconnector with a capacity of 500MW, say, they seem to be out to convince themselves and others that they are locking in an additional 500MW of power, which will be available to South Australians 24 x 365. Nothing could be further from the truth.

Interconnectors are nothing more than pipes, directing power from a generation source to a load.  With the major generators based in Victoria’s Latrobe Valley or New South Wales Hunter Valley, much of what they generate is consumed in Victoria or in NSW long before it reaches South Australia.  It is only excess Victorian or NSW generation that might benefit SA; and then only to the extent that the thermal load limit of the interconnector permits that capacity to be transported to South Australia. While an interconnector might be rated at 500MW, it usually delivers only a fraction of that figure; and then, due to thermal constraints and/or shifts in demand (an increase in load on one side of the interconnector against a fall on the other), only for limited periods.

Overloading the interconnector beyond its thermal limit results in an automatic shutdown; and whatever is being transmitted at that point in time is lost altogether.

South Australians got a taste of precisely that result back in November last year when 110,000 homes and businesses were plunged into darkness.  The cause of that calamity was an almost complete collapse in wind power output, resulting in an abnormal load being drawn across the interconnector and its self-protecting shutdown: Wind Industry’s Armageddon: Wind Farm Output Collapse Leaves 110,000 South Australian Homes & Businesses Powerless

Thanks to its ludicrous attempt to rely on wind power, South Australians can expect to spend a whole lot more time in the dark from here on.