Guest essay by Eric Worrall
h/t JoNova – Australia’s increasingly precarious green energy grid is forcing curbs on economic activity, with plans to pay energy intensive businesses to shut down during periods of high demand, to minimise the political risk of voters noticing what a mess their electricity supply is.
Electricity users will get paid to cut energy use under historic new market reform
By Stephen Long Posted Yesterday, updated Yesterday
Electricity consumers will be paid for reducing their power demands under a radical change to the market that will be introduced next year.
Key points:
- ‘Wholesale demand response’ will come into effect in October 2021, allowing large electricity users to be paid for reducing demand
- Big energy generators and retailers had wanted to delay the change, citing the COVID-19 crisis
- Some advocacy groups want to extend the scheme to households and small businesses
The historic rule change announced on Thursday will allow what’s known as “wholesale demand response” — where the wholesale market can pay users for cutting electricity consumption, rather than paying electricity generators to increase supply, when the system is under strain.
The shift, which will begin in October 2021, has been adopted by the Australian Energy Market Commission (AEMC) despite opposition from big energy generators and retailers, who were using the COVID-19 crisis to pressure for delaying the rule changes.
The commission has described the change as “an important reform to the NEM (National Electricity Market)”.
It argues it will reduce electricity prices for consumers and improve reliability on the network, by allowing demand response to compete with “peaking” electricity generators that typically receive very high prices for supplying additional electricity during times of heavy demand.
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The rule changes are a major victory for a coalition of community and environment groups that fought for the shift to demand response — the Public Interest Advocacy Centre, the Australia Institute and the Total Environment Centre.
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“Big energy users like factories and farms will be able to earn money by saving energy during heatwaves and at other times when electricity prices are high,” the Australia Institute’s energy lead Dan Cass said.
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Earning money for shutting down factories and farms and not producing anything – what could possibly go wrong?
The goal of going full renewable is impractical, maybe impossible. A study in 2019 identified the cost of going renewable is an expansion of mining and industry, with increases in industrial activity around 35 – 105% (and in the case of lithium an eyewatering 2700%) just to satisfy existing energy needs.
When you add in the need to increase energy to supply all that additional mining and industry, the upper end of that estimate is likely a runaway equation, in which renewable infrastructure can never catch up with the energy demands of new industry and mining required to build and maintain renewable infrastructure – especially if everything has to shut down and stop producing whenever weather conditions are unfavourable.
Can’t figure out what all the fuss is about here. As A just retired engineer that did pricing for a major electric utility company, we’ve done demand side management in all sorts of manner to various customer classes, including interruptible service to larger companies that find it in their economic interest to have a modest amount of curtailments throughout the year when demand and or price is high. We’ve been doing this for decades in the United States.
Yes, 20 years ago in the UK when I worked in the steel industry (we still had one then) they had “Load Management Periods” during which electricity usage was minimised – mainly cut production at mills, but including turning out the lights despite the mantra “Safety is our number 1 priority”. Apparently this regular reduction in demand during the evening peak allowed a large reduction in the price paid for electricity at other times. The scheme above seems to be aimed at reducing the ability of conventional generators to make a good profit at times when intermittents are not contributing, so will end up with further loss of generating capacity, and subsequently higher prices as the grid further destabilises.
Hey! lets go nuclear which is the only clean energy that gives required baseload power. Professor Barry Brooks in Tasmania recommends portal nuclear power plants!
“Octopus Energy is set to pay its UK customers to use electricity during the day as a result of an increase in solar and wind energy production…”
https://www.power-technology.com/news/octopus-pays-uk-customers-to-consume-green-energy/
NICK we live in the country and there is an 87mw solar farm a few kilometers from our home which feeds one of the rail systems in Sydney. We connected our electricity to our new home the middle of last year, about the time the solar farm went live, and we were given the option for paid periodic shutdowns of our power. We declined, we need reliable power.
We had no blackouts during the drought, clear skies kept the solar farm working, at least in the daytime. The rain returned in January and we’ve had four blackouts since then, each time we had heavy cloud cover. Turns out the power in our area is in the same area as the mines and I assume that they have generators so it’s the local farms who are sacrificing their power to ensure the supply to Sydney.
Nick the reason we declined their offer is that our water supply is tank water. Our water needs to be pumped to our house. Our pumps run on electricity. When the power goes out we cannot flush the toilet, wash our hands, shower or bathe, fill up the kettle, wash the clothes or do the dishes. On top of that if the fire goes out and it’s minus 3C then we can’t turn on the air conditioning either or cook or obviously use any electric devices.
Tell me on what planet are renewables a good idea!
Several years ago in a city nearby to where I lived owns the local electric company.
They asked the users to reduce their consumption to prevent higher bills.
Raised the rates to compensate for the lost income due to lessened demand.