Clueless and desperate, Australia’s political leaders are fiddling while Rome continues to burn.
The calamity that is South Australia’s self-inflicted power pricing and supply chaos, threatens to spread across state borders like a malignant tumour.
While State Labor governments in Queensland and Victoria continue to talk the talk about their desire to carpet their states with tens of thousands of these things, it’s apparent that they’re not so keen to walk the walk.
Rocketing power prices, routine load shedding and statewide blackouts have not only rendered South Australia an international laughing stock, but make it a prescient warning about what happens when ideology trumps common sense, market economics and sound engineering.
The politicised nonsense keeps spewing forth, however. Twaddle about batteries providing some kind of solution; and pie in the sky waffle about building interconnectors that cost $billions and that will take around 7 years to complete are more like the faithful holding hands and humming Kumbaya – altogether pointless, but somehow soothing for the deluded participants.
In the mix though, one kernel of commonsense managed to pop to the surface: South Australia must now guarantee that both of its baseload power plants are constantly online.
AGL’s Torrens Island gas-steam plant (1,280MW) and Engie’s (aka GDF Suez) Pelican Point Combined Cycle Gas Turbine plant (485MW) will soon face a directive requiring them to be online and running around the clock, in order to accommodate the utterly chaotic delivery of power from SA’s 18 wind farms (with 1,576MW of notional capacity):
No one has yet to indicate just how much South Australian power consumers need to stump up to have those gas-fired plant dispatching only when wind power output drops, but constantly burning gas in order to run 24 x 365: so-called ‘capacity payments‘ to conventional generators are what some might call extortion, but are part and parcel of trying to run on sunshine and breezes.
However, those behind the edict have probably reckoned that the political cost of allowing more ‘black system’ events resulting from sudden, total and totally unpredictable wind power output collapses – like the mass blackout that occurred in November last year, this year’s ‘Black Wednesday’ on 28 September and the mass blackout that hit in the early hours of 1 December – outweighs the political damage caused by a further escalation in already rocketing power bills.
Here’s a couple from the AFR’s Ben Potter that detail just how ridiculous Australia’s energy ‘policy’ has become.
States split on electricity market reform
Australian Financial Review
15 December 2016
Energy ministers have endorsed new rules to make the east coast gas market work better but split over reforms that would make it easier for states like South Australia and Tasmania to get new interstate high voltage transmission lines approved to stabilise their fragile electricity grids.
Larger states didn’t accept a bid by South Australia and Tasmania for broader strategic benefits to be taken into account in the regulatory test for new high transmission interconnectors, which has a tight focus on proving “market benefits” for consumers.
These two states are at the periphery of the National Electricity Market and have both suffered power outages and shortages this year. They want the security of their electricity systems to be part of the regulatory test for new interconnectors which can cost $500 million to $1 billion and which they say are urgently needed to shore up their electricity grids.
Tasmanian Energy Minister Matthew Groom argued for wider economic benefits – as opposed to the narrow market test administered by the AER today – to be taken into account. Tasmania was cut off from the NEM for six months earlier this year when its Basslink interconnector to Victoria was cut during a drought, and had to rely on costly and highly polluting diesel generators.
But federal Energy Minister Josh Frydenberg said ministers had agreed that the market benefits test remained appropriate, although they accepted that matters such as system security and carbon emissions reduction goals should be taken into account, as well as “black swan” or “low probability but high impact” events such as South Australia’s statewide blackout on September 28.
Despite this split and another split over appeal rights for distribution monopolies against regulatory decisions on tariffs, Mr Frydenberg said ministers had made progress in getting the electricity reform process back on the rails after last week’s spectacular falling out with the states over the abandoned proposal for an emissions intensity scheme to drive carbon emissions reductions harder.
Ministers have agreed to meet again in February by video or phone hook-up, a rare move that underlines the urgency of agreeing on fixes for the National Electricity Market after the series of power outages and shortages in South Australia and Tasmania.
They agreed that information about transmission networks should be made more widely available so that proponents of non-network solutions such as battery storage in the grid can be considered on an equal footing. South Australian Energy Minister Tom Koutsantonis is preparing a paper on wider economic benefits for February.
Victorian Energy Minister Lily d’Ambrosio and Queensland Energy Minister Mark Bailey refused to endorse the inclusion of wider strategic benefits in the regulatory test, saying they didn’t want consumers lumbered with the high cost of expensive transmission lines that could become white elephants as technology such as batteries becomes more commercially viable.
Mr Frydenberg said Chief Scientist Alan Finkel had briefed the meeting on the potential for batteries to be used to provide so-called frequency control ancillary services which are vital for stabilising electricity networks as well as energy storage. The briefing was part of an update by the chief scientist on his system security review with more intermittent wind and solar power and less “synchronous” coal and gas power in the electricity grid.
Mr Frydenberg said ministers had agreed to fast track this work with final recommendations due early in the new year ahead of Dr Finkel’s final report on system security, expected in May.
But Queensland and NSW opposed a move to abolish rights of appeal by monopoly power distributions companies against tariff decisions by the Australian Energy Regulator, agreeing to only procedural changes to speed up appeals, narrow the grounds of appeal and limit costs.
Mr Frydenberg accused the Queensland and NSW governments of acting to protect the value of their power distribution assets. “You only appeal against a decision of the AER if you want to slug consumers more,” he told reporters after the meeting. “We don’t want to see the system gamed by the power distribution companies any more.”
NSW is part way through privatising its electricity distributors Ausgrid, Endeavour Energy and Essential Energy, which are all appealing AER tariff decisions in the Federal Court. Queensland still owns its electricity distributors, but Mr Bailey said the government had instructed the distributors not to appeal the AER’s regulatory decisions and to cop it sweet.
The blackout in late September and another outage in South Australia three weeks ago have sparked a national debate about energy security at a time when mandated increases in wind and power generation are pushing coal and gas power out of the electricity market.
Australian Financial Review
AEMO bolsters SA energy market security
Australian Financial Review
15 December 2016
While federal and state governments have bickered over how South Australia’s electricity system got to be so fragile, the Australian Energy Market Operator has taken a series of quiet steps to reinforce the state’s energy security.
The Council of Australian Governments energy council heard yesterday that AEMO now insists there must be two “synchronous” generators running in South Australia at any one time to ensure the system can be stabilised if it suffers shocks from transmission lines falling down or any other cause.
Synchronous generators are thermal generators – in South Australia’s case only gas generators are available – which can provide grid stabilising “frequency control ancillary services”. So-called FCAS are required to keep frequency and voltage within an acceptable range and prevent system collapses such as the one that occurred on September 28 in South Australia during a severe storm.
As well, chief scientist Alan Finkel told the ministers that AEMO now takes a more conservative approach to managing the grid by treating clusters of wind farms (or other generators) as a single group and assuming they could all drop out in managing system security in certain circumstances.
Huge and sudden voltage fluctuations during the severe storm in September caused a large number of wind turbines to spontaneously shut down to protect themselves, helping to trigger the system collapse.
The third step AEMO has taken is to manage the Heywood interconnector – South Australia’s energy lifeline to Victoria’s sturdy but highly polluting brown coal power stations – in a more controlled manner.
The Heywood interconnector was running at full capacity when the September storm hit and cut out as a self-protective measure, which made the voltage fluctuations that caused the wind farms to shut down more severe.
A shutdown by the Heywood interconnector on December 1 – caused by a transmission failure in western Victoria that took out Alcoa’s Portland smelter – also caused a five-hour power outage at BHP Billiton’s Olympic Dam mine.
Federal Energy Minister Josh Frydenberg said spare capacity was now being maintained on the Heywood interconnector to leave it with room to adjust in future events of this type.
In October, wind turbine maker Siemens agreed to increase the number of voltage losses that would cause its turbines to shut down from six to 20.
Still, Mr Frydenberg hit back at South Australian Premier Jay Weatherill, saying that taking advice on energy from him would be “a bit like taking speech lessons from Marcel Marceau”.
Australian Financial Review
One of the great lies that continues to be run in the aftermath of SA’s Black Wednesday, is that the reason wind power output collapsed was that ‘voltage losses’ (meaning a loss of stable power supply from the grid delivered by conventional generators) to wind turbines caused their automatic shutdown.
The critical fact is that wind turbines are designed to automatically shut down when wind speeds exceed 25m/s (or 90km/h). On the day in question, SA was buffeted with wind speeds of between 100km/h and, as the Bureau of Meteorology reported, in the areas where wind farms were meant to be operating, wind speeds in excess of 190km/h, with tornadoes that topped 260km/h. However, for some strange reason the AEMO avoids that fact like the plague.
Another fact that Ben Potter might like to recognise is that Siemens turbines account for a minute fraction of those running at SA’s 18 wind farms: the bulk in the mid-north are Suzlon S88s (which are steadily falling apart, less than seven years into their operation), with the next biggest proportion of turbines being those produced by Denmark’s Vestas, the outfit that saw the value of its shares plummet when Donald Trump was elected.
However, no matter who makes them, no wind turbine will operate in wind speeds in excess of 25m/s – a fact which a few clicks on the Siemen’s website quickly reveals:
Nature presents us with different kinds of challenges. High wind can create extremely high loads, and as a result wind turbines are normally programmed to shut down if the 10-minute mean wind speed exceeds 25 m/s. This may pose a significant challenge for the grid system – for example, if turbines in large wind farms shut down simultaneously.
‘Significant challenge for the grid system’, indeed …
Then there is the audacity of Josh Frydenberg likening SA Premier Jay Weatherill to Marcel Marceau. As Frydenberg well knows, it was the Federal government’s Large-Scale Renewable Energy Target that led to South Australia’s wind rush and that it is the Federal LRET that continues to destroy the viability of meaningful power generators, like Victoria’s Hazelwood plant.
The determination to have South Australia’s last base-load plants constantly online is an indication of how desperate the situation is in SA. However, it’s a little like treating a guillotine victim with a Band-Aid.
The only real solution is to reclassify wind power generators as “scheduled generators” and thereby force them to deliver nominated volumes of electricity at nominated times, over nominated periods, predetermined in advance.
Under the AEMO’s current rules wind farms constitute “semi-scheduled generators”:
A generating system with intermittent output (such as a wind or solar farm), and an aggregate nameplate capacity of 30 MW or more is usually classified as a semi-scheduled unless AEMO approves its classification as a scheduled or non-scheduled generating unit. AEMO can limit a semi-scheduled generator’s output in response to network constraints, but at other times the generator can supply up to its maximum registered capacity.
During the chaos that reigned after Black Wednesday, the AEMO prevented a number of SA wind farms from dispatching power to the grid for a week or so. However, apart from that occasion, wind power outfits are free to deliver everything they generate when the wind is blowing and free to deliver nothing at all when it stops.
Scheduled generators, on the other hand, face serious financial penalties should they ever fail to deliver the volumes promised at the scheduled time and for the scheduled period.
The definition of ‘semi-scheduled’ was cooked up by the wind industry to avoid being penalised for failing to deliver.
Able to flood the market when the wind blows (while still collecting guaranteed prices under their Power Purchase Agreements at rates in the order of $110 per MWh), wind power outfits have, so far, avoided the costs to power consumers caused by their inability to deliver at all.
STT hears from its Canberra sources that one way of providing a level playing field for conventional generators under serious consideration is to reclassify wind power generators as “scheduled generators”. That way, wind power outfits would, like meaningful conventional generators, be required to nominate, in advance, a volume of power to be delivered at set times and for a set duration.
In the event that the wind power outfit did not deliver the volume promised at the designated time or for the designated duration, the wind power outfit would become liable for the cost incurred by the grid manager in obtaining an alternative supply of power. And, with South Australian spot prices often hitting the regulated market cap of $14,000 per MW/h when the wind stops blowing, the cost that would ultimately be borne by wind power outfits for failing to deliver as scheduled would be colossal.
The flipside of the equation is that wind power outfits would not be entitled to dispatch any power to the grid if they had not been scheduled to do so in advance. On that basis, wind power outfits would only be able to deliver power on those occasions when demand exceeded scheduled supply and to only deliver volumes of power based on the difference between actual demand and scheduled supply.
By re-designating wind power generators as “scheduled generators”, conventional generators would know, in advance, when to fire up their plant, based on the preordained schedule set by wind power generators themselves. On that basis, conventional generators would only ever be burning fuel when they were in a position to dispatch power to the grid and earn revenue from doing so.
On its face, what’s been proposed by the AEMO in the AFR story above, merely suggests that SA’s remaining base-load plant will be burning gas around the clock and dispatching power only on those occasions when wind power output disappears, albeit on a daily basis.
For conventional generators to have any hope of surviving in that circumstance they will, no doubt, demand substantial compensation for the fuel being burnt and wasted. That cost is one that South Australia’s already battered power consumers will simply have to bear.
Welcome to your wind powered future!