Economic Train Wreck: Wind Power Obsession Triples Power Prices in South Australia

runaway train lone ranger

For the best part of 15 years, South Australia’s hapless Labor government has been pushing wind power like there was no tomorrow. Within a short space of time, South Australia earned the tag ‘Australia’s wind power capital’.

The wind industry, its parasites and spruikers have been crowing about South Australia’s wind power credentials for a decade.  Now that – thanks to routine load shedding and statewide blackouts – SA has become an international laughing stock, it’s a little difficult for the wind cult to unscramble the egg: either South Australia is an ‘example’ of how an economy can run on sunshine and breezes, or not?

Putting aside the routine blackouts and load shedding that follow total and totally unpredictable collapses in wind power output, there’s the small issue of the cost of wind power and the chaos that it brings to a system designed around dispatchable power generation systems – ie those that can be dialled up on demand, rather than part-time power that operates at the whims of mother nature.

Already an economic basket case, South Australians now face even more punishment, as the cost of power generation rockets.

Where neighbouring Victoria – liberally blessed with abundant base-load conventional generation capacity – can expect to pay a spot price of around $54 per MWh this year, SA faces generation costs triple that, at $153 per MWh. We’ll explain why in a moment, but first here’s a roundup from The Australian.

Renewable energy push to hit Labor’s heartland
The Australian
Michael Owen
29 December 2016

Labor’s traditional working-class supporters will bear the brunt of spiking electricity prices and power failures in the fallout from the South Australian, Victorian and Queensland governments’ push towards ambitious renewable energy targets.

Energy experts have warned the shutting down of more coal-fired power plants and the rise of renewables risks leading to a future where wealthier households can pay for better reliability of supply while others are left in the dark.

Most of the impact of the nation’s rapidly changing electricity market would be on vulnerable consumers who do not have the resources to invest in technologies to reduce their demand on the grid or generate their own electricity.

Australia’s Chief Scientist, Alan Finkel, has warned that a class of consumers could be prevented from adopting new technologies — such as rooftop solar PV or battery storage — by a limited ability to pay large up-front costs or to obtain finance.

Dr Finkel, who is conducting a review of the electricity market for the federal government following the statewide blackout in South Australia in September, said people who rented properties or lived in apartments were limited in their ability to install new technologies.

Migrants with limited English, people with poor financial literacy and those struggling to make ends meet were at risk of paying increased costs to subsidise households or businesses able to invest in new technologies. Passive or loyal consumers who were not engaged in managing their electricity demand and costs were vulnerable too, Dr Finkel added.

The danger was that, as more consumers took greater steps with the aid of technological advancements to rely less on the grid, the cost of building and maintaining the network would be spread over a smaller number of “vulnerable” users.

The Australian Energy Market Commission has warned that electricity prices are set to surge during the next two years, largely driven by the close of coal-fired power stations in South Australia and Victoria and ongoing investment in wind generation.

Australian Stock Exchange data showed yesterday that base future contract prices for March were highest in South Australia, which yesterday had its third major blackout in four months. For companies to buy a megawatt of electricity in March, it would cost South Australian buyers almost $152.91, compared with $100 in Queensland, $63.75 in NSW and $54.50 in Victoria.

spot-price-sa-2017

South Australia, under Labor Premier Jay Weatherill, has a renewable energy generation mix of more than 40 per cent, the highest of any state. The state’s last coal-fired power station closed in May.

Several peak industry groups canvassed by The Australian agreed that, without the correct policy settings in place, there was a danger of large numbers of consumers relying less on the grid.

Minerals Council of Australia chief executive Brendan Pearson said renewable energy targets hit low-income households harder, while the wealthy were able to access solar and other incentive schemes, the cost of which was then loaded on to other users.

“This is a double whammy for the poor,” Mr Pearson said.

Victoria’s Labor government has set a 40 per cent renewables energy target for 2025 and Queensland Premier Annastacia Palaszczuk has a 50 per cent target by 2030. The federal Labor opposition has a renewables target of at least 50 per cent by 2030 compared with the Coalition’s target of 23.5 per cent by 2020.

Grattan Institute energy director Tony Wood said that, while consumers would not realistically be able to pay directly for more reliable supply from the grid, those with the means could install some form of back-up behind the meter, most commonly a generator. “Of course, some consumers can pay more to have their own supply via solar PV and batteries or via gas as did the Coopers Brewery that saved them during the (South Australian) blackout,” he said.

“The critical issue is how the grid is priced as consumers change the way they use it. Volume-based charging just isn’t fair and yet moving to demand-based charging is highly controversial.

“The extreme version is that homes and businesses are charged for the grid being there even if they never use it at all. These are questions that governments and regulators are grappling with and the answers are messy.”

Climate Institute head of policy Olivia Kember said there was a real risk of large numbers of households leaving the grid, which likely would be the result of ongoing policy failure by federal and state governments. “It’s not just a problem for lower-income households, but also apartment dwellers and large industry that needs grid-based power,” she said. “Currently we are seeing coal stations close with only six months’ notice, and no signals to tell the market what is needed to replace them.”

Australian Energy Council chief executive Matthew Warren said all consumers ultimately would want to be connected to the grid, even as a form of back-up, although there was a risk more would be less reliant on it. “The reality is if we are going to have a decarbonised system that is going to be reliable, it will cost more and we’ve seen that in South Australia — it is living proof,” he said. “There are a lot of inequities in the system and they are difficult to answer. The inequities can get worse.”

Mr Warren agreed there was a risk that those with the means to invest in new technologies would become less reliant on the grid and leave behind other more vulnerable groups.

“There is evidence that the largest household energy consumers are by far the poorest,” he said.

Warnings by Dr Finkel and the Australian Energy Market Commission that power prices are expected to begin rising is being blamed for generator closures, gas supply constraints and international parity gas prices.

The AEMC warned that, by 2018, the national electricity market would be divided into two price regions: cheaper in the north, Queensland and NSW; more expensive in the south, Victoria, South Australia and Tasmania.

Federal Energy Minister Josh Frydenberg said energy security remained “our number one” energy policy priority. “Australians expect access to reliable and affordable electricity and that is what the federal government is determined to provide through the COAG Energy Council,” he said.

“Yes, we have to meet our emissions reduction targets, but it can’t be at the expense of the lights going out or Australians not being able to afford their power bill.”

South Australian opposition cost of living spokesman Corey Wingard said: “The surging price of electricity in South Australia is creating two classes of consumers for this essential service: the haves and have-nots. Sadly many will struggle to keep their airconditioners on this summer … The more consumers that withdraw from the grid the greater the cost that will be borne by those still reliant upon it and the greater number of households will be cut off.”

Australian Power Project chief executive Nathan Vass, said national energy policy must focus on a low-emissions future that included clean coal technologies as well as renewable generation to keep energy prices in check and supply stable. “The closure of the Northern Power Station in SA and Hazelwood in Victoria are driving up power prices and destroying regional economies,” Mr Vass said.
The Australian

sa-blackout-adelaide

28.9.16: Adelaide goes ‘off-grid’…

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Before we detail why power generation costs in South Australia are triple those of neighbouring Victoria, we can’t help but notice the hand wringing and crocodile tears being shed about those ‘unfortunates’ who can’t afford a sea of (heavily subsidised) shiny solar panels on their roof.

After a string of blackouts across South Australia during 2016 (and, for some, the darkness continuing into 2017), those purportedly ‘fortunate’ enough to have solar panels on their rooves became victims of a slightly embarrassing fact: solar panels will not supply a household with power unless there is a stable power supply flowing to that household from the grid.

That is, despite solar systems costing multiple thousands of dollars, once the grid collapses the house or business with panels ends up relying on candles for illumination and ice to keep perishables from perishing, just like the house or business without. Hence the panicked rush amongst South Australian households and businesses to purchase petrol or diesel powered generation plant.

Likewise, industrial wind turbines cannot operate at all without a stable supply of electricity produced by synchronous generation systems, which in Australia means coal, gas or hydro.  South Australians learnt as much on 28 September last year during what became known as ‘Black Wednesday’.

Now, let’s take a look at why South Australia’s power generation costs are fully triple those in Victoria. The figures we run below are based on the situation as it was from 2016, which does not affect the substance or conclusion of our analysis: chaotic wind power costs.

What SA Pays when the Wind is Blowing

The villain behind the wind power disaster playing out in SA is the Federal Large-Scale Renewable Energy Target (LRET), which the Coalition government knows is doomed, but can’t bring themselves to say so out loud (see our post here).

As to how the LRET has wrecked SA’s power market, we’ll start with an observation by the Australian Financial Review’s Mark Lawson about how SA’s wind power outfits operate under the LRET:

When the wind is blowing strongly wind farm power will flood the market to pull prices down to minus $20 (generators pay retailers to take the power). This is obviously uneconomic for conventional generators, but wind and solar generators can still make some money under the renewable energy target.

In short, wind power outfits collect the same amount of revenue, irrespective of the spot price. However, conventional generators receive the prevailing price – and, unlike wind power outfits, do not receive any form of subsidy for what they dispatch: the market perversion driven by the LRET and subsidies for wind power is what has caused SA’s conventional generators to become unprofitable; and it’s that lack of profitability that led to Alinta’s decision to close its Northern Port Augusta plant in May last year.

The Power Purchase Agreements (PPAs) struck between wind power outfits and retailers (which you’ll never once see the likes of Infigen or Trustpower talk about publicly) are built around the massive stream of subsidies established by the Large-Scale Renewable Energy Target (LRET) – which is directed to wind power generators in the form of Renewable Energy Certificates (RECs aka LGCs).

Under PPAs, the prices set guarantee a return to the generator of between $90 to $120 per MWh for every MWh delivered to the grid.

In a 2014 company report, AGL (in its capacity as a wind power retailer) complained about the fact that it is bound to pay $112 per MWh under PPAs with wind power generators: these PPAs run for at least 15 years and many run for 25 years.

Wind power generators can and do (happily) dispatch power to the grid at prices approaching zero – when the wind is blowing and wind power output is high; at night-time, when demand is low, wind power generators will even pay the grid manager to take their power (ie the dispatch price becomes negative)(see our post here). As noted in the quote from the AFR, wind power outfits have been paying the grid operator up to $20 per MWh to take power with no commercial value.

However, the retailer still pays the wind power generator the same guaranteed price under their PPA – irrespective of the dispatch price: in AGL’s case, $112 per MWh.

PPA prices are 3-4 times the cost that retailers pay to conventional generators; retailers can purchase coal-fired power from Victoria’s Latrobe Valley for around $25-35 per MWh. Although with the pending closure of Hazelwood (and the loss of 1,600MW of base-load capacity), that cost is bound to rise: hence the Victorian future spot price of $54 per MWh.

Underlying the PPA is the value of the RECs (aka LGCs) that are issued to wind power generators and handed to retailers as part of the deal.

The issue and transfer of RECs under the LRET sets up the greatest government mandated wealth transfer seen in Australian history: the LRET is – without a shadow of a doubt – the largest industry subsidy scheme in the history of the Commonwealth. That transfer – which comes at the expense of the poorest and most vulnerable; struggling businesses; and cash-strapped families – is effected by the issue, sale and surrender of RECs. As Origin Energy chief executive Grant King correctly puts it:

“[T]he subsidy is the REC, and the REC certificate is acquitted at the retail level and is included in the retail price of electricity”.

It’s power consumers that get lumped with the “retail price of electricity” and, therefore, the cost of the REC Subsidy paid to wind power outfits. The REC Tax/Subsidy has already added over $10 billion to Australian power bills, so far.

Between 2016 and 2031, the mandatory LRET requires power consumers to pay the cost of issuing 470 million RECs to wind power generators. With the REC price currently $87 – and tipped to exceed $90 as retailers get hit with the shortfall penalty set by the LRET – the wealth transfer from power consumers to the Federal Government (as retailer penalties) and/or to the wind industry (as REC Subsidy) will be somewhere between $40 billion and $50 billion, over the next 16 years:

Australia’s Energy Debacle: South Australia Just the First Victim of the LRET’s $45bn in Wind Power Subsidies & Fines

With more wind power capacity per head than any other State, South Australians are going to be lumbered with a disproportionate share of the ludicrous cost of the REC Tax/Subsidy, set by the LRET.

A cost that is already forcing major employers like Nyrstar to consider shutting up shop – with the immediate loss of 750 jobs in economically depressed Port Pirie. And more than 50,000 SA homes to do without any power at all, now (see our post here). And, which is one half of the reason why South Australians are being belted with power price increases that are 4-5 times the rate of inflation. Here’s the other half.

What SA Pays when the Wind Stops Blowing

SA Jul 16

SA is lumbered with 18 wind farms, with a ‘notional’ installed capacity of 1,576MW – it has the greatest number of turbines per capita of all States – and the highest proportion of its generating capacity in wind power by a country mile.

The chaos that wind power brings with it, has created the perfect opportunity for peaking power operators (running highly inefficient Open Cycle Gas Turbines and diesel generators) to make out like bandits at power consumers’ expense – simply because it can be predictably ‘relied’ on to disappear without warning (see above).

Wind power driven, market chaos clearly has the Australian Energy Market Operator worried; and, if SA’s journalists were on the ball, should have policy makers anxious and voters/power consumers furious.

To detail what we mean we’ll pick up on an AEMO analysis of SA’s spot market. The following comes from AEMO’s ‘Pricing Event Report’ for SA for July 2015. To which we’ve added daily output data, care of Aneroid Energy.

In 2015, SA’s average spot price for power was running around $72 per MWh (compared to Victoria’s $35 – for the future spot price margin for next year and beyond, see above). The reason for the price difference has a lot to do with the fact that the Victorians have a relatively tiny proportion of their generating capacity in wind power; and the largest coal-fired generators in the country.

Now, with SA’s 2015 average of $72 per MWh in mind, consider the number of occasions in July when – as wind power output collapses – the spot price approaches or hits the Market Price Cap.  That cap – currently $14,000 per MWh and $13,800 per MWh in 2015 – sets the upper limit of what peaking power generators can extort from the system: for a rundown on how the National Energy Market is designed to work, see this paper: AEMO Fact Sheet National Electricity Market

That’s the ‘design’; here’s the shocking reality.

Pricing Event Reports – July 2015

28 July SA

Electricity Pricing Event Report – Tuesday 28 July 2015 (TI ending 1830 hrs)

Market Outcomes: South Australian spot price reached $1,967.51/MWh for trading interval (TI) ending 1830 hrs.

South Australian FCAS prices (Volume Weighted FCAS Prices) and energy and FCAS prices for the other NEM regions were not affected by this event.

South Australia had an actual Lack of Reserve 1 (LOR1) from 1800 hrs to 2030 hrs (Market Notices 49437 and 49438).

Detailed Analysis: 5-Minute dispatch price reached $10,759.20/MWh for dispatch interval (DI) ending 1820 hrs. The high price can be attributed to rebidding of generation capacity and limited interconnector flows during the evening peak demand period. Wind generation was low during this period in South Australia.

The South Australian demand was 2,233 MW for TI ending 1830 hrs. During the same TI, wind generation in South Australia was at 18 MW.

For DI ending 1820 hrs, a total of 38 MW of generation capacity was rebid from Hallett PS and Northern PS unit 2 from bands priced at or below $590.07/MWh to bands priced above $13,333/MWh. South Australian generation capacity was offered at less than $591/MWh or above $10,759/MWh resulting in a steep supply curve.

Cheaper priced generation were restricted by their ramp rates (Mintaro GT) and FCAS profiles (Torrens Island A units 3 and 4). Generation offers at $10,759.20/MWh had to be cleared from Dry Creek GT unit 3 to meet the demand for the DI.

During the affected DI, the target flow towards South Australia on the Heywood interconnector was constrained to 403 MW by an outage constraint equation V::S_XKHTB1+2_MAXG. This transient stability constraint equation manages the Victoria to South Australia flow for the loss of the largest generation block in South Australia during the outage of both parallel Keith – Tailem Bend 132 kV lines.

The target flow on the Murraylink interconnector was limited to 68 MW towards South Australia by the outage constraint equation, V>X_NWCB6022+6023_T1. This constraint equation limits flow from Victoria to South Australia on Murraylink during the planned outage of the Monash – North West Bend No. 2 132 kV line from 22 July 2015.

The 5-minute price reduced to $104.27/MWh in the subsequent DI to the high priced interval when 673 MW of generation capacity was rebid from higher priced bands to the market floor price of -$1,000/MWh.

The high 30-minute spot price for South Australia was forecast in pre-dispatch schedules prior to TI ending 1130 hrs. The pre-dispatch schedule for TI ending 1830 hrs forecast a spot price of $590.07/MWh. The difference in prices between Pre-dispatch and Dispatch was a result of rebidding of generation capacity within the affected trading interval. The wind generation forecast for pre-dispatch was also marginally higher, which also contributed to the difference in prices.

Electricity Pricing Event Report – Tuesday 28 July 2015

Market Outcomes: South Australian spot price reached $2,390.06/MWh for trading interval (TI) ending 0800 hrs.

South Australian FCAS prices and energy and FCAS prices for the other NEM regions were not affected by this event.

Detailed Analysis: 5-Minute dispatch price reached the Market Price Cap (MPC) of $13,800/MWh in South Australia for dispatch interval (DI) ending 0750 hrs. The high price can be attributed to rebidding of generation capacity resulting in a steep supply curve during the morning peak demand period. Wind generation was low during this period in South Australia.

The South Australian demand was 1,915 MW for TI ending 0800 hrs. During the high priced TI, wind generation in South Australia was at 19 MW.

For DI ending 0750 hrs, AGL shifted a generation capacity of 160 MW from Torrens Island B PS from bands priced at or below $124.99/MWh to bands priced at MPC of $13,800/MWh. South Australian generation capacity was offered at less than $591/MWh or above $12,195/MWh resulting in a steep supply curve.

Cheaper priced generation were restricted by their ramp rates (Hallett PS, Mintaro GT, Quarantine PS unit 4) and fast-start profiles (Dry Creek GT unit 3) which required time to synchronise.

Generation offers at Market Price Cap (MPC) of $13,800/MWh had to be cleared from Torrens Island B PS to meet the demand for the DI.

During the affected DI, the target flow towards South Australia on the Heywood interconnector was constrained to 460 MW by the Victoria to South Australia Heywood upper transfer limit thermal constraint equation, V>S_460. The target flow on the Murraylink interconnector was limited to 61 MW towards South Australia by the outage constraint equation, V>X_NWCB6022+6023_T1. This constraint equation limits flow from Victoria to South Australia on Murraylink during the planned outage of the Monash – North West Bend No. 2 132 kV line from 22 July 2015.

The 5-minute price reduced to $109.32/MWh in the subsequent DI to the high priced interval when South Australia demand reduced by 77 MW. Approximately 101 MW of non-scheduled generation came online. Generation capacity was also rebid from higher price bands to the market floor price of -$1000/MWh which also contributed to reducing the dispatch price.

The high 30-minute spot price for South Australia was not forecast in the pre-dispatch schedules, as it was a result of rebidding of generation capacity within the affected trading interval. The wind generation forecast for pre-dispatch was also marginally higher, which also contributed to the difference in prices between pre-dispatch and Dispatch.

27 July SA

Electricity Pricing Event Report – Monday 27 July 2015

Market Outcomes: South Australian spot price reached $4,449.17/MWh for trading interval (TI) ending 0800 hrs.

South Australian FCAS prices and energy and FCAS prices for the other NEM regions were not affected by this event.

Detailed Analysis: 5-Minute dispatch price reached the Market Price Cap (MPC) of $13,800/MWh and $12,195.07/MWh in South Australia for dispatch intervals (DIs) ending 0755 hrs and 0800 hrs respectively.

The high prices can be attributed to rebidding of generation capacity resulting in a steep supply curve during the morning peak demand period. Wind generation was moderately low during this period in South Australia.

The South Australian demand was 1,896 MW and the temperature in Adelaide was 4.9 °C for TI ending 0800 hrs. During the high priced TI, wind generation in South Australia was at 141 MW.

For DI ending 0755 hrs, AGL shifted a generation capacity of 200 MW from Torrens Island B PS from bands priced at or below $174.99/MWh to bands priced at MPC setting the high price. South Australian generation capacity was offered at less than $591/MWh or above $10,759/MWh resulting in a steep supply curve.

Cheaper priced generation were restricted by their ramp rates (Hallett PS), FCAS profiles (Northern PS unit 2) and fast-start profiles (Dry Creek GT units 2 and 3) which required time to synchronise.

For DI ending 0800 hrs, cheaper priced generation were restricted by fast-start profiles (Dry Creek GT units 2 and 3) which required time to synchronise. Generation offers at $12,195.07/MWh had to be cleared from Hallett PS to meet the demand for the DI.

During the high priced DIs, the target flow on the Heywood interconnector was limited up to 418 MW towards South Australia by the binding transient stability constraint equations, V::S_NIL_MAXG_SECP and V::S_NIL_MAXG_AUTO. The V::S_NIL_MAXG_SECP constraint equation prevents transient instability by limiting flow on the Heywood interconnector from Victoria to South Australia for the loss of the largest generator in South Australia for periods when the South East capacitor is unavailable for switching. The V::S_NIL_MAXG_AUTO constraint equation prevents transient instability by limiting flow on the Heywood interconnector from Victoria to South Australia for the loss of the largest generation block in South Australia.

The target flow on the Murraylink interconnector was limited to 58 MW towards South Australia by the outage constraint equation, V>X_NWCB6022+6023_T1. This constraint equation limits flow from Victoria to South Australia on Murraylink during the planned outage of the Monash – North West Bend No. 2 132 kV line from 22 July 2015.

The 5-minute price reduced to $174.99/MWh in the subsequent DI to the high priced interval when generation capacity from several South Australian generators were shifted to lower priced bands.

The high 30-minute spot price for South Australia was not forecast in the pre-dispatch schedules, as it was a result of rebidding of generation capacity within the affected trading interval. The wind generation forecast for pre-dispatch was also marginally higher, which also contributed to the difference in prices between pre-dispatch and Dispatch.

22 July SA

Electricity Pricing Event Report – Wednesday 22 July 2015

Market Outcomes: South Australian spot price reached $2,296.07/MWh for trading interval (TI) ending 1830 hrs.

South Australian FCAS prices and energy and FCAS prices for the other NEM regions were not affected by this event.

Detailed Analysis: 5-Minute dispatch price reached $13,481.81/MWh in South Australia for dispatch interval (DI) ending 1810 hrs. The high price can be attributed to a steep supply curve of generation capacity offered during evening peak demand period when wind generation was low in South Australia.

The South Australian demand was 2,100 MW for TI ending 1830 hrs. During the high priced TI, wind generation in South Australia was low at 39 MW.

For DI ending 1805 hrs, Energy Australia shifted a generation capacity of 34 MW from Hallett PS from bands priced at $360.81/MWh to bands priced at $13,481.81/MWh. For DI ending 1810 hrs, AGL rebid a generation capacity of 100 MW from Torrens Island B PS from bands priced at or less $64.99/MWh to bands priced at $13,500/MWh. South Australian generation capacity was offered at less than $591/MWh or above $10,750/MWh resulting in a steep supply curve. Cheaper priced generation was restricted by FCAS profiles (Northern PS unit 2 and Torrens Island PS unit A4) and fast-start units (Mintaro PS and Quarantine PS) which required time to synchronise.

Generation offers at $13,481.81/MWh had to be cleared from Hallett PS to meet the demand for the DI.

The target flow on the Heywood interconnector was limited to 447 MW towards South Australia by the binding transient stability constraint equation, V::S_NIL_MAXG_AUTO. This constraint equation prevents transient instability by limiting flow on the Heywood interconnector from Victoria to South Australia for the loss of the largest generation block in South Australia. The target flow on the Murraylink interconnector was limited to 64 MW towards South Australia by the outage constraint equation, V>X_NWCB6022+6023_T1.

This constraint equation limits flow from Victoria to South Australia on Murraylink during the planned outage of the Monash – North West Bend No. 2 132 kV line from 22 July 2015.

The 5-minute price reduced to $53.42/MWh in the subsequent DI to the high priced interval. South Australia demand reduced by 103 MW when 101 MW of non-scheduled generation came online. Generation capacity was also rebid from higher price bands to the market floor price of -$1000/MWh which also contributed to reducing the dispatch price.

The high 30-minute spot price for South Australia was not forecast in the pre-dispatch schedules, as it was a result of rebidding of generation capacity within the affected trading interval. The wind generation forecast for pre-dispatch was also marginally higher, which also contributed to the difference in prices between pre-dispatch and Dispatch.

19 July SA

Electricity Pricing Event Report – Sunday 19 July 2015

Market Outcomes: South Australian spot price reached $2,372.11/MWh for trading interval (TI) ending 1830 hrs.

South Australian FCAS prices and energy and FCAS prices for the other NEM regions were not affected by this event.

Detailed Analysis: 5-Minute dispatch price in South Australia reached $13,333.95/MWh for dispatch interval (DI) ending 1830 hrs. The high price can be attributed to a steep supply curve in generation capacity during the evening peak demand period when wind generation was low in South Australia.

The South Australian demand was 2,066 MW for TI ending 1830 hrs. The high evening peak demand was due to the cool weather in Adelaide, with a low temperature of 7.3°C at 1830 hrs. During the high priced TI, wind generation in South Australia was low at 3 MW for TI ending 1830 hrs.

For DI ending 1825 hrs, Alinta Energy rebid 95 MW of Northern PS generation capacity from bands priced at or less than $286.95/MWh to $13,333.95/MWh. South Australian generation capacity was offered at less than $591/MWh or above $10,750/MWh resulting in a steep supply curve for the high priced DI. Cheaper priced generation were restricted by ramp rates (Torrens Island Unit A4), FCAS profiles (Northern PS Unit 2) or required time to synchronise (Hallett PS).

Generation offers at $13,333.95/MWh had to be cleared from Northern PS units to meet the demand for the DI.

The target flow on the Heywood interconnector was limited to 448 MW towards South Australia by the thermal constraint equation, V>S_NIL_HYTX_HYTX. This system normal thermal constraint equation manages post contingent flow on the Heywood 500/275 kV transformers by reducing Heywood interconnector flow when the actual flow exceeds the pre-defined transformer rating. The target flow on the Murraylink interconnector was limited to 64 MW towards South Australia by the outage constraint equation, V>X_NWCB6225+6021_T1. This constraint equation limits flow from Victoria to South Australia on Murraylink during the planned outage of the North West Bend 132 kV circuit breakers from 13 July 2015.

The 5-minute price reduced to $115.77/MWh in the DI subsequent to the high priced interval when demand reduced by 111 MW and 101 MW of non-scheduled generation came online.

The high 30-minute spot price for South Australia was not forecast in the pre-dispatch schedules, as the forecast demand in pre-dispatch was lower.

17 July 2015 SA

Electricity Pricing Event Report – Friday 17 July 2015 (TI ending 0000 hrs on 18 July 2015): South Australia

Market Outcomes: South Australian spot price reached $2,256.25/MWh for trading interval (TI) ending 0000 hrs (on Saturday, 18 July 2015).

FCAS prices and energy prices for the other NEM regions were not affected by this event.

Detailed Analysis: 5-Minute dispatch price reached $13,333.95/MWh in South Australia for dispatch interval (DI) ending 2340 hrs on 17 July 2015 during high demand period due to hot water load management (ripple control). Between DIs ending 2325 hrs and 2340 hrs, the South Australian demand increased by 311 MW. This additional load represented an 18% increase in the South Australian demand.

Wind generation in South Australia was approximately 120 MW for TI ending 0000 hrs on 18 July 2015.

At DI ending 2335 hrs, a total of 150 MW of generation capacity from Northern PS was shifted from bands priced at or less than $286.95/MWh to $13,333.95/MWh. The high price for DI ending 2340 hrs was set by Northern PS at $13,333.95/MWh. Cheaper priced generation was available from fast-start units (Hallet and Dry Creek unit 3) which required time to synchronise.

The target flow on the Heywood interconnector was limited to 449 MW towards South Australia by a thermal constraint equation, V>S_NIL_HYTX_HYTX for DI ending 2340 hrs. This system normal constraint equation manages post contingent flow on the Heywood 275/500 kV transformers by reducing the Heywood interconnector flow when the actual flow exceeds the pre-defined transformer rating. The target flow on the Murraylink interconnector was limited to 66 MW towards South Australia by an outage constraint equation, V>X_NWCB6225+6021_T1. This constraint equation manages limits flow from Victoria to South Australia on Murraylink during the planned outage of the North West Bend 132 kV circuit breakers from 13 July 2015.

The 5-minute price reduced to $47.13/MWh for the next interval (DI ending 2345 hrs) when the demand reduced by approximately 122 MW and 102 MW of non-scheduled generation came online. A total of 349 MW of generation capacity was also rebid from higher priced bands to the market floor price of -$1,000/MWh.

The high 30-minute spot price for South Australia was not forecast in the pre-dispatch schedules, as it was a result of a 5-minute load increase that caused a price spike in the 5-minute dispatch prices.

7 July SA

Electricity Pricing Event Summary – Tuesday 7 July 2015*

Market Outcomes: South Australia spot price reached $1,221.54/MWh for trading interval (TI) ending 1900 hrs. South Australia FCAS prices and energy and FCAS prices in other regions were not affected.

Summary:

South Australia 5-Minute dispatch price reached $6,794.04/MWh for dispatch interval (DI) ending 1855 hrs due to a steep supply curve in generation capacity during a period of low wind generation. Planned outages affecting the interconnector flow into South Australia also contributed to the high price.

  • Low levels of wind generation in South Australia at approximately 60 MW at TI ending 1900 hrs
  • Rebidding of 20 MW of Hallett PS generation capacity from bands priced at or less than $360.81/MWh to bands priced at $13,481.81/MWh for DI ending 1840 hrs
  • For DI ending 1855 hrs, South Australian generation capacity was offered at less than $590/MWh or above $10,750/MWh resulting in a steep supply curve
  • Cheaper priced generation were restricted by a fast-start unit (Dry Creek GT unit 3) which required time to synchronise
  • The target flow on the Heywood interconnector was limited to 430 MW towards South Australia by a planned outage thermal constraint equation, V>S_APHY2_NIL_HYTX2. This constraint equation manages flow of the Heywood M2 transformer during the outage of APD-HYTS No. 2 500 kV line
  • The target flow on the Murraylink interconnector was limited to 181 MW towards South Australia by a planned outage constraint equation, S>>RBTX1_RBTX2_WEWT. This constraint equation manages post contingent flow of Waterloo East – Waterloo 132 kV line for the trip of Robertstown No. 2 132/275 kV transformer during the outage of Robertstown No. 1 132/275 kV transformer.

South Australia energy price reduced to $46.14/MWh for DI ending 1900 hrs when:

  • Demand reduced by 144 MW and 104 MW of non-scheduled generation came online
  • Generation capacity was rebid from higher price bands to the market floor price of -$1000/MWh which also contributed to reducing the dispatch price.

The high 30-minute spot price for South Australia was not forecast in the pre-dispatch schedules, as the forecast demand in pre-dispatch was lower.

* A summary was prepared as the maximum daily spot price was between $500/MWh and $2,000/MWh

3 July SA

Electricity Pricing Event Report – Friday 03 July 2015

Market Outcomes: South Australian spot price reached $2,296.32/MWh for trading interval (TI) ending 0830 hrs.

South Australian FCAS prices and energy and FCAS prices for the other NEM regions were not affected by this event.

Detailed Analysis: 5-Minute dispatch price reached $13,333.95/MWh in South Australia for dispatch interval (DI) ending 0810 hrs. The high price can be attributed to a steep supply curve of generation capacity offered during morning peak demand period when wind generation was low in South Australia.

The South Australian demand was 1,990 MW for TI ending 0830 hrs. The high morning peak demand was due to the cool weather in Adelaide, with a low temperature of 3.5 °C at 0800 hrs gradually rising to 6.5°C at 0900 hrs at Adelaide Airport. During the high priced TI, wind generation in South Australia was low at 45 MW for TI ending 0830 hrs.

For DI ending 0810 hrs, South Australian generation capacity was offered at less than $590/MWh or above $10,750/MWh resulting in a steep supply curve. Cheaper priced generation were restricted by a fast-start unit (Hallett PS) which required time to synchronise.

Generation offers at $13,333.95/MWh had to be cleared from Northern PS units to meet the demand for the DI.

The target flow on the Heywood interconnector was limited to 444 MW towards South Australia by the binding thermal constraint equation, V>S_NIL_HYTX_HYTX. This system normal thermal constraint equation manages post contingent flow on the Heywood 275/500 kV transformers by reducing Heywood interconnector flow when the actual flow exceeds the pre-defined transformer rating. The target flow on the Murraylink interconnector was limited to 179 MW towards South Australia by a voltage stability constraint equation, V^SML_NSWRB_2. This constraint equation avoids voltage collapse in Victoria for loss of the Darlington Point to Buronga (X5) 220 kV line.

The 5-minute price reduced to $103.93/MWh in the subsequent DI to the high priced interval. South Australia demand reduced by 96 MW when 105 MW of non-scheduled generation came online. Generation capacity was also rebid from higher price bands to the market floor price of -$1000/MWh which also contributed to reducing the dispatch price.

The high 30-minute spot price for South Australia was not forecast in the pre-dispatch schedules, as the forecast demand in pre-dispatch was lower. The wind generation forecast for pre-dispatch was also marginally higher, which also contributed to the difference in prices between pre-dispatch and Dispatch.
AEMO July 2015

So, in a nutshell: South Australians are paying a minimum of around $110 per MWh for wind power when the wind is blowing (compared with the future Victorian average spot price of around $54); and, when the wind stops blowing, are paying a spot price that quickly hits $2,000 per MWh and often hits the regulated market cap – currently $14,000 per MWh.

It’s an economic and social nightmare that any sane politician would be bursting to escape from. But, not in SA. Its Labor government, headed by the vapid Jay Weatherill only wants more of the same: pushing for a 50% RET.

If anyone is unsure how a wind powered ‘future’ might look, then look no further than South Australia.

Load shedding and blackouts are the norm for all South Australians, but with power generation costs triple Victoria’s, tens of thousands are going to experience energy poverty of a kind that makes life a grinding misery: no electric light; no air-conditioning; no refrigeration – or, instead, going hungry in an attempt to afford a little of what were once reasonable expectations – reasonable even for low income earners and pensioners – which have quickly become tantalising luxuries for all too many.

Welcome to your wind powered future!

bread and water for dinner

Tuck in son, it’s either that or candles.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. You need to mention how priority access to the market works in conjunction with the PPAs and RECs to produce this economic fiasco. The renewables need both in order to make money but few understand how priority access to the market is just as damaging and distorting as the subsidized payments.

  2. Michael Crawford says:

    I see Frydenberg is still subscribing to the theory that one can have one’s cake and eat it too (i.e. cheap, reliable electricity and meet ridiculous, useless CO2 targets).

    No doubt that is because, as a politician, he expects he can indulge in destructive fantasies in office and still walk away with a magnificent pollies pension and benefits.

  3. Jackie Rovensky says:

    For those who are interested in the ‘performance’ of our installed wind energy projects below are some performance records I took recently of wind power sent to the Grid. Starting from 7 January 2017 on that day Adelaide reached 39.5C, Whyalla 39.3C, Ceduna 43.9C with the heat moving west into Victoria and into NSW.

    Times refer to SA time
    7.1.17 9.16am 12.02pm Installed Grid

    Capacity
    SA 647MW 706MW 1576MW
    VIC 506 466 1485
    NSW 48 6 651
    TAS 18 41 168
    8.1.17 7.22am 12.03pm
    SA 92 44
    VIC 364 310
    NSW 131 198
    TAS 6 105
    9.1.17 7.33am
    SA 117
    VIC 55
    NSW 131
    TAS 6

    Can this form of energy production be relied on to support our needs when and where we want electricity? Over the years we have been told to cut back on our usage, to use more energy efficient electrical goods and ‘intelligent’ new types of meters have been installed – to what avail when we are now being pushed into considering buying electric cars and our public transport (here in SA anyway) is being electrified.
    With increased energy use even when using energy efficient items more is going to have to be produced, can we rely on Wind or even battery storage for our needs – of course not.
    We are going no where with reducing our reliance on electricity and electricity that is there when and where it is needed.
    What will happen when motor vehicles are being re-charged and the power goes off, here in SA we already know that trains, and trams stop when the power goes off, we are also now very aware of the cost to industry and commercial interests when the energy goes off, we are also acutely aware of the danger to important facilities such as Hospitals and food storage when the power goes off.
    We are using more energy as more and more people move over to mobile phones and other things like the NBN especially when it is going to be sourced by many from fixed wireless towers. Both mobile phone towers and no doubt the NBN towers will have battery backup, but what happens when the batteries run out – again we have seen the nightmare of power outages which results in the depletion of battery storage backup.
    It’s time the Governments accepted they have directed us down a path of endless and increasing energy usage without first understanding how it is going to be produced with sufficient reliability to ensure supply when and where it is needed at a cost that is affordable to all.

  4. Bill Harding says:

    The Alternative use of the Wind for Energy Purposes

    Our Modern world is entrapped to supply ever increasing amounts of electrical energy.
    With populations increasing and a wider range of Appliances and devices available this need is of paramount importance to be satisfied.
    This incentive has been created by the concerns about how best we can achieve this goal without creating havoc within the worlds Environment.
    For the last past 30 years, the Climate Change emphasis has been a driving force to look at alternative forms of energy which is more sustainable than using fossil type fuels, and its Derivative Theory of Carbon Depletion that has become the accepted norm to be reduced.
    The Wind Farm concept and Theoretical gains that was actively highlighted became a goal that every country felt they should aspire to implement and solve the World’s energy problems.
    The United Nations has produced guidelines and levels for every Country to aspire to, by encouraging a greater percentage and level of reliance and proportion to be supplied by the Wind farm revolution.
    The future levels mooted by 2020, is around 50% of Generation for the Wind Farms to be installed in every country.
    For the Writers view this is a completely unacceptable goal to achieve, and is tantamount to a disaster waiting to happen.
    The disaster is centred around the reduction in the Quality of the Energy to the Consumers along with the Instability and Reliability of maintaining the Grid Operational Programmes under all Conditions.
    The development of the Electrical Power Grid Systems and the Refinements of Protection, Distribution and Control, have all been based around the production of a Sinusoidal Wave made Sine Wave operating at 50 or 60 Hz (cycles per second) which are the Standard Formats around the World.
    This energy Format over the years has been strengthened and streamlined, to form a cohesive comprehensive and reliable SYNCHRONOUS energy source that can cater for further future Development and Controlled Extensions mainly because the laws and theory of this form of electricity is predictable and understood.
    The entrance of the large Wind Farm concept in recent years, will Completely fragment and destroy any gains of the tried and proven reliable Grid system of yesteryear.
    The introduction of the Wind Farm concept is based for the Engineering Profession to Assimilate and Accept the introduction of ASYNCHRONOUS forms of electrical power.
    Asynchronous Grid Power is defined as “not existing or occurring at the same time”.
    This definition within the Power Industry, is that it is in a “state of Asynchrony, which is not being in Synchronization with the Basic and Prime 50 or 60 cycles per second Sinewave”.
    Any Asynchrony form of energy in the Power Grid Field is Classified as Harmonics.
    Every Power Authority or Corporation from an Engineering perspective involved with the Production of electricity, claim that Harmonics is a “dirty form of emasculated weaker power form”, which is not to be encouraged in any form, as it only develops into creating more problems to solve downstream.
    Every Country has appropriate Laws to Limit them.
    Yet, in the wisdom of the powerful uninformed, they, are willing to compromise all those past achievements by installing increasing amounts of these unwanted Harmonics by building more Wind Farms.
    The sole Production Commodity aim of any Wind Farm Output is to Produce Harmonics.
    The Technical Engineering Description of Wind Farms is that they are “a Group Collection of Wind Assisted Variable Capacitive Frequency Asynchronous Power Grid System Moderating Modulating Three Phase Induction Motors”.
    As they are effectively basic “Induction Motors”, they do not have any ability or “Rights” to be Classified as Normal “Generators or Alternators” which has been Designed to produce the Limitation and Control of any Frequency or Voltage Excursions that need instant accurate correction action, or to cater for the shifting Dynamics of the System Frequency and Stability under Variable load conditions.
    Because the Output of any Wind Farm, cannot supply the Primary Function to alleviate and improve the Worlds Power Crisis, the Writer recommends that those who have the power to make those Decisions that they all should be Shut-down, Retired and Removed.
    By the Issuances of this Order, will have an instant Positive effect on many facets associated with the Negative Electrical Characteristics that Wind Farms have been created and Spawned since their inception.
    The World has had to endure not only the Physical impacts of destroying the lives of many people, there has also been the unseen unwanted destruction and termination of lives within the animal kingdom above and below ground.
    A very unpublicized negative product of Wind farms, has been the ramifications associated via the Zero and Negative Phased Unbalanced Currents that enter the Earth which have systematically destroyed all life forms such as Worms and Crustaceans that reside between the Wind Farm Star Point Earthing-Mats across the Sea and the breadth of the Country.
    The good news is that the World has become very adaptive to making large scale changes, and it is essential that the World utilises the Power of the Free Wind for their future Energy needs.
    The Writer does not propose something new to utilise the free wind, but is proposing that the emphasis be made to make a change to a more sustainable proven system that will satisfy the energy needs in the future.
    Many countries have hills and adjacent water ways within their controllable boundaries.
    They should use these attributes by using the Wind in the Lower lands to Gang pump water up to a storage reservoir or Lake to then supply a Hydro Station that has ONLY Synchronous Alternators installed, which will produce the required 50 or 60 Cycles per Second Sine Wave Frequency Power.
    Which is a very Clean Stored Energy system, using the Head and Weight of Water.
    Of-course this will entail a higher initial Capital Cost to Construct, but the long-term downstream benefits will support a more Longstanding, Stable and Enduring option than by building more Wind Farms.
    It is more Logical to be carrying on the Strengthening of your present Grid designed power system to cater for the future within this option, than to standby and allow the System to Deteriorate such as an Unreliable and Uncontrollable Power Source, which happened recently in South Australia. Where the State had a Blackout that lasted 2 days during one small lightning storm. The operating downfall here was they had 18% of “so called Wind Generation” on line supplying the Grid Load.
    The Technical make-up of the Wind Farm proportion, consisted of forcing the power Transfer into a Capacitive Leading Power Factor Mode of operation thus any sign of a disruptive Grid intrusion will quickly cause Instability and a Domino collapse regime till complete isolation occurs.
    Every Power System in the World, currently at the present time which have Wind Farms attached, are supplying Two Components of electricity.
    One is the original designed 50 or 60 Hz energy which is essential for all Appliances to operate efficiently on, the other is the Modified energy that is Multiples of the 50/60hz up to 3,000 Hz that is illegal and cannot be utilised but is being paid for and as such is completly useless.
    Likewise, every Country should only allow separate Mega-watt Graphs, depicting Normal 50/60 Generated Power, and the other being depicting and Labelled as Distorted Harmonic Power.
    This then clearly allows Discriminating between “Apples with Apples”.
    After analysing the evidence and practical implication of continuing down the Negative aspects of Wind Farm expansion programmes, should Awaken the Readers desire to promote and encourage the Establishments by using the Wind Water Pump Storage system that has only Positive Attributes concerning the Wellbeing of Humans and Animals, along with cheaper power options whereby you are not paying for large Subsidies and Offset Costs from Fossil Fuel Stations which is required on Standby when any present Wind farm are placed On-Line.
    To allow more Wind Farm Expansion indirectly or on any Platform is supporting the Widest and Largest Scam and Conspiracy Operating known at the present time.

    The writer is well qualified and versed operationally with the Downside of all forms of Asynchronous Generation, and his passion and goal is to only Enlighten every Consumer in the World by expanding and Awakening their knowledge about the Energy they use daily at their fingertips.

    Bill Harding System Diag
    nostic Electrical Engineer (Independent and Retired)
    27 Shera Street
    Acacia Bay
    Taupo
    New Zealand
    0274271066 8/1/3017

  5. Access to cheap electricity is a basic human right.

    Brilliant article. A warning to other States.

    NSW is heading in a similar direction with numerous wind farms proposed and those built such as the dreadful Gullen Range Wind Farm surrounding our beautiful farm and destroying the landscape.

    So often turbines are not working in need of repair which involves the use of massive cranes. One can only imagine the costs all passed onto the consumers of electricity no doubt.

    • Ross King says:

      Bingo! Rosemary.
      I keep saying it, and will say it again…..
      Maslow’s Hierarchy of Needs states that the BASE needs of humankind include food, warmth & shelter. In any advanced society, Govt’s top priority is facilitating the provision of same at the LOWEST POSSIBLE COST (whether it be by state nationalization or by regulating the free-market to ensure competition and obviate monopolistic behaviour).

      Failing which, Govt’s quite rightly run the risk of overthrow at the ballot-box, or by riot & mass public unrest (on the French model, of which we shd see more to catch the attention of the legislators and administrators), or by revolution.

      There is nothing better to seize the attention of our respective leaderships than by the threat of public-disorder.

      The egregious power-management and power-pricing shenanigans should be enough to get the restless out, prising up the cobble-stones to throw at the elites.

      Grannies, frozen to death thro’ their inability to pay power-bills, shd have their bodies piled on the steps of the Legislatures, until cheap, reliable energy is restored. Bring back lowest-cost electricity now.

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