From Dr. Judith Curry’s Climate Etc.
by Chris Morris & Planning Engineer (Russ Schussler)
What they are doing and what issues are occurring
Australia is transitioning from a coal fired generation system to one based on solar and wind. There is an accelerated program to do this driven by both major political parties. There has been a lot written about the developments, mainly as advocacy, and many relevant facts are not mentioned. The proponents see the transition as world-leading while the skeptics believe the country will become the crash test dummy proving it won’t work. Already there have been major issues. Those in themselves and the remedial actions needed are harbingers that increasing penetration is likely to lead to a very expensive and unreliable electrical energy system.
The country isn’t the image the travel posters promote. More than 80% of Australians live within thirty miles of the coast and an even bigger percentage in urban areas. The big cities are hundreds of miles apart around the continental edge. These factors have had a major influence on their grid. Until quite recently, the system was primarily supported by large multi-unit coal fired power stations, located next to the coalfields. The transmission lines ran from them to the cities they served. There was very little interconnection. This was influenced by the very parochial political system.
Australia is a federal system, with six States and several Territories. The States jealously guarded their rights and had regular disputes with both their neighbours and the Federal Government. Interstate rivalry can go beyond a joke. Each State originally ran their own electricity system. Gradually this expanded and interconnectors between States were put in. As well as the AC lines, there are three DC interconnectors including a near 200 mile undersea cable joining Tasmania to the mainland. The interconnectors are ties between the State grids allowing interstate flow, but they often act as chokepoints.
In the 90s, the National Electricity Market (NEM) started. The name is a misnomer. Western Australia, about a third of the country, isn’t a part of it as it is too far away to link. Neither are the numerous isolated towns not connected to anywhere. Part 1 deals with grid as it is now in the Eastern and South-eastern States.
The management and operation of the electrical system is complex and mainly market driven. At the top is the Energy Regulator, a federal agency enforces the rules, monitors the markets, sets the revenue for the monopolies and is the arbitrator for disputes. Together with them is AEMC (Australian Energy Market Commission) who make and amend the rules but they can’t propose them. The federal AEMO (Australian Energy Market Operator) is the System Operator, running their electricity (and gas) markets. The market is run on a merit order dispatch, subject to load requirements and constraints. Negative pricing is allowed to ensure must run generation. For every trading period, originally half an hour but now five minutes, the generators submit a power and price. This can be graduated. This is arranged in increasing price forming a total MW versus price stack. The price paid to all dispatched resources is where the load line crosses this merit order stack. Some plant may be constrained on or off, regardless of their place in the merit order. There are also a number of secondary markets for services like reserves and frequency control.
Most of the generators are owned by companies which seek to run at a profit. They can connect to the grid if they comply with the rules. There can be problems connecting if there are no local lines or the ones there are overloaded. They generate when dispatched. For those like wind and solar who are semi-scheduled (a euphemism for unreliable) there are special rules around their bids.
Each State has a transmission grid company that owns and operates their high voltage network. There are distribution companies for the low voltage networks that have territories for which they are responsible. For example, NSW (New South Wales) has three of these. Both Transmission and Distribution are natural monopolies so are run as regulated ones.
There are a myriad of electricity retailers. Some are generator based retailers (gentailers), providing a customer load for their generation. Most retailers have longer term contracts with generation companies for their load requirements. There are niche suppliers who run on spot market prices but have backup hedges for their load requirements. Some market gas or internet as a package. The NEM supplies around 9 million customers – they are the group that ultimately pay the cost of both operation and capital development.
To this market has to be added the uncontrolled domestic generation by solar panels. These make up a significant and increasing part of the generation base. In one state one day, they provided over 90% of the instantaneous generation. The installations are supported by subsidies and generous feed-in tariffs. Most households do not have batteries.
AEMO does the forecasting. They look at factors like government policy, load predictions, generation development plans, system security requirements and the like. They use these to put out a variety of regular reports; some general, some specific, detailing what changes need to be made. The transmission companies are responsible for execution and to get funding approval from the regulator. As well as these, if a major incident occurs, they will put out a report detailing what happened, why and what changes need to be made. These often feed back into the other reports.
That is how it all fits together. Needless to say, the bureaucracy cost is high and there is a lot of employment for administrators and lawyers. The maps here show the location in each State of the transmission system and generators, both existing and proposed ones. The NEM supplies around 9 million customers – they are the group that ultimately pay the cost of both operation and capital development.
Cost to consumers
The renewables are subsidised to varying extents. Because it can be present at different levels and through different forms right down to the domestic level, it seems no one is exactly sure how much renewables are subsidized. However, the power price has risen over the 40 years at twice the rate of inflation with prices really taking off in 2007, coincident with increased renewable energy target. The authors are unaware of any detailed breakdown of exactly what has caused this rise other than the corelation with RET (Renewable Energy Target). The power price is still going up. We note the Ukraine war was blamed for part of the rises, even though Australia imports no electricity or thermal power station fuel. In contrast with reality, the AEMC just two years ago, and others more recently, predicted power would be getting cheaper by now. Even if it is not in the power bill, the price of these subsidies comes from somewhere and eventually are paid for by the taxpayer.
Where the Renewables are currently at
Wind and solar, the unreliables, are now a significant part of the current NEM generation but the backbone is still coal – over 60% of the energy. Wind is less than 15% and grid solar 5%. The snapshot below when the sun wasn’t shinning shows the contribution coal still makes. There is also the significant presence of domestic PV. Because it is mainly behind the meter, there is no accurate data on its precise magnitude. But scaling up the contribution of grid solar and allowing for less efficient installations, it would be in the order of another 10%. However, even at those levels, the intermittency and unpredictability has had major detrimental impacts on power stability. Note the instantaneous power contribution can be a lot higher that the numbers quoted above. This article mainly looks at just the broader problems of its unpredictability. Later postings may cover a more detailed analysis of some specific problems that have occurred so far.
Management of the grid on a day-to-day basis depends on reliable generation and dispatchability. The renewables offer neither. For wind, there is often the mantra that the wind is blowing somewhere. The actual data does not back that up. A skeptic has for a number of years compiled the daily wind generation on the NEM. The results are revealing. The graph shown below is for just one month, June 2022. There is a synchronicity in the output of all the windfarms. To cope with the drop in those declines from wind, that is a lot of power that needs to be quickly ramped up. If the wind isn’t blowing and it is night-time, where will the energy to make up the dip come from? The mainstay 400MW+ coal units that form the background of the energy supply can take three days to get to full load if cold.
Solar can be just as bad. On 1st and 4th July, 2022, the power from solar those days in Queensland was only a small fraction of what it had been the previous week or so. On the 4th, there was a cloud bank over all of eastern half of state all day and little wind production as well. The interconnectors from NSW were at rating with imports and the market price was at the maximum $15,000/MWh.
Proponents of the renewables boast about how places like South Australia (SA) achieved near 100% renewable energy generation, often around the middle of the day, implying they could do it all the time. What they don’t say, because it spoils the narrative, is a lot more instructive. Look at the generation profile below of one such day. They had to keep the gas turbines on to provide inertia. These had to generate most of the load before dawn and at dusk because the wind wasn’t there. Battery provided very little. The balancing interconnectors to Victoria that allowed near 20% export or coal fired power to come in were important if not essential. Without the gas power and the Heywood line, SA would have been in real trouble.
Even on a “normal” day, the merit order in SA is akin to a switch. When the sun is out and the wind is blowing, the merit order is in negative pricing. When it’s not, prices go up, often around $400/MWh. That raises costs for the distribution companies which pass it on their customers.
Heywood’s interconnector play a lot bigger everyday role in buffering SA’s erratic generation than renewables proponents will admit. In the right conditions, up to 40% of the State’s load come in through its lines. That stabilises its voltage as the frequency is locked onto that of the NEM. There is a smaller interconnector from north-western Victoria, but this is DC so it has a lot less of a role. Heywood’s benefit was demonstrated during an islanding outage in November. During the outage it cost the grid operators in just two days $22M just to provide Frequency Control services. These are what used to be called governor control on grids with a lot of inertia and big steam turbines. On modern grids, many thermal plants, especially gas turbines can run in this mode. Things often happen a lot faster with less conventional generation, so the corrections of frequency control have to be sped up. Grid operators promote batteries are capable of this function, but that is making a virtue out of a necessity. All those islanding costs will need to be paid by either the power consumer or the taxpayer. That is why SA has the most expensive power of any of the mainland States in the NEM.
The examples above show the unpredictability NEM grid operators have had to regularly cope with. It is relatively easy to match load and generation when conditions are just right. However, that it generally takes a very fine balance backed up by a lot of very expensive plant infrastructure. Much of it is not needed for day-to-day operations. However, when things go wrong, they can turn catastrophic in a very short time. The grid power supply to major infrastructure within a city may be 99.99% reliable, but can it cope with the power unpredictably being out for an hour a year which that number is? Reliable electricity isn’t just a nice to have for modern life, it is essential.
Forty years ago, Australia had an electricity system delivering cheap, reliable power. That is no longer the case. Development and change have been driven by politics and dogma, not engineering and economics. Things that work are being replaced by that which looks good to virtue signallers, especially to those that don’t understand the issue. Prices have risen a lot faster than inflation. Even then, the number on the power bill is probably not the full cost as there are hidden ones. The authors are unaware of any recent study of the price that takes into account or even identifies all the subsidies. However, for the money expended, they should have had a capable, robust, gold-plated system. It isn’t. The system staggers from crisis to crisis, the solution usually being more rules, market interventions and invariably, a subsidy. The price of electricity fluctuates between glut and scarcity, even on a daily basis. Large industrial users like smelters are downsizing, offshoring, or getting another subsidy. Australia used to be referred to as the lucky country. That may no longer be the case.
Next up: “Australia Part 2; A Grid revolution around the Corner? Or Just the Madness of a Crowds?” Will look at efforts within Australia to reduce the need for synchronous generators and allow for high penetration of renewables. Additional posts may follow covering other issues within Australia.
Bio: Chris Morris is a long-time but irregular commenter on Climate Etc. He is a semi-retired power station engineer in New Zealand.
My attitude is that wind and solar are virtue signalling and subsidy mining operations not really intended to produce power.
I like it best when dumb Progressive experiments happen a long way away from me.
Not necessarily with interest in Progressive experiments but I get the drift-
EU delays vote on combustion engine phaseout after German pushback (msn.com)
I get your point, BUT, you shouldn’t like it at all, ever.
I don’t like it. At all. But accepting that people want unicorns and refuse to accept history, it’s unfortunately inevitable that these insane experiments will continue. If that is the case, I prefer they happen as far away as possible.
A lot of information! Some questions:
How far ahead is dispatch scheduled? Day ahead? Real time?
How are the intermittent renewables scheduled? Or are they treated as ‘must run’ resources?
If scheduled, what consequences are there for renewable energy suppliers who over or under produce?
If you’re interested in the finer details some homework here-
WattClarity | Commentary and analysis of Australia’s NEM
Bid stacks are required by 12:30pm the day before. Each generator can bid up to 10 blocks of energy at different prices. That includes semi-scheduled but obviously not rooftops, which produced 16% of electricity in Q4/2022 and has got up to 90% in South Australia at lunchtime..
However the question is next to meraningless now and is becoming even more meaningless. There are two States, WA and SA, with already enough rooftop capacity to exceed the total lunchtime demand. The other States are not too far behind. High power costs are forcing baseload consumers out of the market – they are a dying breed.
The latest challenge for the grid controllers is selectively reducing the input from rooftops out of the generation stack. Clouds over Perth in WA can swing solar hundreds of MWs in less than an hour. So schedules are next to useless.
AEMO has devised forecasting tools for wind and solar so they can manage the system with more confidence. They are mostly identifying the instability risks. They produce a constant stream of notices identifying risks and potential shortfall in synchronous generation and will ultimately provide “direction order” for a synchous generator to connect and they later agree a price. The consumer carries most of the cost of orders, Wind and solar generators also carry some of the cost of orders. Grid W&S also carry some of the cost of FCAS charges. Batteries now earn the biggest slice of the FCAS market and this component usually provides more than their price arbitrage.
All the generators operate sophisticated scheduling systems with a view to maximising profit. The idea of merit order does not exist. Coal plants will bear high negative prices to stay scheduled at minimum stable output to avoid the wear and tear of going off line.
There is a huge amount of daily data generated and a lot of it is publicly available:
The one bit of good news for Australia is the the capacity factors for W&S is declining as more is connected. Not due to natural factors but, rather, economic curtailment. Subsidies will need to go up for them to get a return. That just means ever rising prices. Few people appreciate it is a giant Ponzi scheme.
In WA, it’s created a new profitable market for companies with their own power station. Alcoa, for one, has often made more money in a day selling power than making alumina.
For an aluminium smelter they cant let the pot line go ‘cold’ from diverting the power elsewhere.
Theres a bit of arbitrage going on and a quick check shows that while there is a gas fired power station next door to Alcoa , they dont ownit/operate it but probably have a long term supply contract
When it comes to Australia, this is what the people are NOT being told about renewable power.
Wind – 10.277MW
Solar – 8,809MW
Rooftop Solar – 20,000MW (if you can believe that)
Hydro – 7937MW
So, the total Nameplate for those four renewables is 47,053MW. (That’s huge in anybody’s language.)
The total Nameplate for ALL coal fired power is 23,000MW.
So, those four renewables have DOUBLE the Nameplate of coal fired power. (umm, isn’t that game over then?)
Okay actual power delivered to the grid for the whole of the year of 2023. (last year)
Those four renewables – 72,550GWH
Coal fired power – 131,000GWH
So, with double the Nameplate, ALL FOUR renewables delivered just 55% of the power from coal fired power.
There are 42 Hydro plants, 79 Wind Plants, 107 Solar plants, and untold millions of rooftops, so there are (just the Industrial power plants) 228 renewable power plants, and all they manage is 55% of the power generated by 16 coal fired plants with a total of just 49 Units.
What’s 5% of a hundred? Umm, I’d like to use my Pass here, Eddie.
Maths means nothing to people these days, and seriously, they don’t really want to even know.
Tell them these facts, and the response would be ….. Hey isn’t that squirrel over there?
More like hey look over there it’s a unicorn as SA’s State Labor Gummint fearing a hot summer with an election in the offing grasped Elon’s Big Battery offer for Hornesdale wind farm. Meanwhile crickets from MSM as they also rolled out 9 diesel generators that could consume 80,000 litres/hour of diesel. Dumb and dumber.
Yet the stories around the Tesla battery farm all shout success
‘Elon Musk’s Battery Farm Is an Undeniable Success’ says Popular Mechanics
There are some advantages once they made the move to wind on a large scale ( plus the interstate connectors to bigger grids)
The real money for a battery backup isnt made by actual supply but by being the large standby reserve, as well doesnt deplete batteries that much for their recharge cycles.
What is missed of course is the shutting down of the generation that responds to demand rather than the other way round needs a big expensive ‘reserve’ supply
For those who don’t know, Tony often makes very informative comments about the Australian electricity market at Jo Nova’s
“Rooftop Solar – 20,000MW (if you can believe that)”
Well, if you can measure that. So I bet its output isn’t included in the 72,550GWH recorded as generated by renewables.
So that means the renewables that generated the 72,550GWH are closer in MW to the coal rating.
Perhaps, but nowhere near as reliable as fossil fuels or do you think so-called renewables are reliable?
Nick can you not read?
In total 228 renewable power plants (42 hydro, 107 solar, 79 wind) produced 55% of the power generated by 16 coal plants with 49 units.
Rooftop solar was not included.
Yes, I can read, and do sums, What he said was
“So, with double the Nameplate, ALL FOUR renewables delivered just 55% of the power from coal fired power.“
Double? Well, he says:
“So, the total Nameplate for those four renewables is 47,053MW. (That’s huge in anybody’s language.)
The total Nameplate for ALL coal fired power is 23,000MW.”
Rooftop solar is included in that 47,053MW.
A reading test for you.
I wouldnt think having your own rooftop solar and maybe doing the hot water and a few appliance or lights isnt a grid supply.
Whats the % of home solar that has battery storage and what % is grid connected
Total solar is reported, including behind the meter use. Methodology and data here
As usual you are wrong. Data on solar are assembled by APVI and reported along with the rest of NEM as you can verify here
We can all appreciate how well renewables, especially rooftop solar, are doing in the middle of a sunny day but must also appreciate that their uncontrolled installation has created grid stability problems. The following is an extract from the Australian Energy Market Operator (AEMO) 2020 Renewable Integration Study: Stage 1 report:
But all of this discussion of how well variable renewables are doing in the middle of the day pales into insignificance when their performance at the evening peak usage period is examined. At this time, the sun has generally retired for the day, resulting in wind taking up the batten. It provided an average 3.1 GW into a system needing 20-28 GW with notable daily seasonal variability. The result for calendar year 2022 is shown below:
Wind and solar can never replace fossil fuel and nuclear stop being stupid!
The vast majority of the costs are borne by net consumers.
The costs from general revenue are minor.
The Federal Government arrange the trade in LGCs and STCs. These are mandated theft from consumers to those with wind or solar energy extractors.
The States have run various schemes but they are small change. Victoria has an additional State subsidy for rooftop solar. They have also offered three off $250 hardship payments if you log into a price comparator site.
South Australia purchased the emergency back up diesels from general revenue. South Australia also has a household battery program with a budget of AUD100M. .
All the new power lines and things like synchronous condensers add to the transmission cost paid by consumers.
The Federal Government ARENA has fronted up with AUD1.96bn to support pet projects like green hydrogen, hot rocks and wave power, which were mostly dismal failures.
The only way to avoid the direct impact of high costs is to make your own and there are a lot of Australians now contributing to lunch time power. Saturday March 4 and three States have negative wholesale prices – very common for this time of year.
Most of the costs are now locked in. Consumers will be stuck with the ever growing cost of transmission and stabilising components for decades. The only way to reduce exposure is to get off the grid. That is an economic proposition for most Australian households. Smart businesses will be doing the same. Leave the grid to the Greenies to stuff it entirely.
South Australia also has a household battery program with a budget of AUD100M.
To get the means tested max $6000 (largely for a Tesla Powerwall at the time) you virtually had to show you couldn’t afford one and the irony was Labor junked a Liberal feelgood policy-
South Australian government axes Home Battery Scheme, saving money in state budget – ABC News
As for households getting off the grid with solar and batteries that’s only economic for remote areas off the grid and running on diesel-
Solar, storage provides energy solution for remote Australian town – pv magazine International (pv-magazine.com)
Never never never for townies and even if you’re a dedicated tree hugger with plenty of readies for solar and batteries you’d have a modest genny for the last 5% as going 100% goes exponential.
I disagree about the costs. I’m off grid and since the last upgrade I have not needed to use the generator, (charging at 3kW when in use).
My system is based on 48kWHr of lead acid battery, (24 x 2v, no maintenance gel cells), 7kW of solar panels and a 7kW inverter.
No exponential costs involved, total cost $50,000 (Oz$). Where I am located, the cost of a single wire mains feed, power poles, transformer and design fees were in excess of $100k to connect. So a no brainer in reality.
12 years and counting. New batteries, in several years, are going for about $18k, minus about $2k when I cash in the old batteries. Spare inverter, $5k.
I’d call that a cheap win for the homeowner.
Well I’m all electric with 400L element storage HWS induction hob LED lights and RC aircon with the usual fridge appliances and electronics. Last Dec I installed a 30deg north facing solar system with 6.64kW of panels and a 6kW inverter so now in peak summer that can be outputting 5.5kW around midday. Now with long sunny days I’m seeing regularly 38-44kWhrs a day.
Private cost of system after RECs was $5300. So I’m happy to put that solar to good use heating the HWS and cooling the home although it’s been a mild summer and not much call on the aircon.
However I note one of those days was overcast and only produced 9.5kWhrs and how many of them will I get in a row come winter albeit with our mild Medterranean climate? When I want the aircon on to heat or anything else I want to be able to flick that switch and the bill come what may.
Now with your $50k investment at 5% opportunity cost you’re already up for $2500/year cost. That’s before depreciation on those lead acid cells of yours that you need to be damn careful you don’t drain their voltage too much unlike lithium battery capability. I’m surprised all the grid firming big batteries are running lithium and not lead acid like you. What is it you know they don’t?
For clarification what was your total spend in those 18 years?
What is your projected spend in the next 5 years?
We’re loans required, if so what was the term and interest?
The total spend is noted above. That’s everything. No loans taken out but that doesn’t mean that you should ignore the invested value of the capital involved.
As I stated above, the cost to connect to the grid was extremely high and I’m only about 5km from that last connection point.
I have sufficient power to have all standard electrical appliances in the house, including a couple of mid sized a/c units. Cooking is gas, (LPG), due to the very high demands that could otherwise deplete the storage.
My projected spend over the next five years could be the batteries, although my measurements over the years suggest that the units will go out to and exceed the 18 years as forecast by the manufacturer based on my storage temperature and minimum discharge values. The battery achieves float charge every day, even in bad weather, and often gets there by 9:00am in the morning, (when sunny). This is possible because the sun carries all the daytime load and the nighttime usage is only a couple of refrigerators, an A/C unit in summer and the TV.
Our typical summer power usage is in the order of 25kWHr on a hot day. Winter is down to 4kWhr, sometimes less, demand really depends on the season.
As I stated above, the cost to connect to the grid was extremely high and I’m only about 5km from that last connection point.
Point taken as I’m aware new grid connections have been fully user pays for many years compared to the old days of socialising the cost to the existing user base. First home buyers cop all such utility and infrastructure costs in new subdivisions nowadays and that doesn’t come cheap.
I was just pointing out what the deal is for the vast majority if your home is already on grid power and toying with getting offgrid with solar and batteries. You won’t be doing it to save on power bills-
The Top 8 Mistakes People Make When Buying Batteries (solarquotes.com.au)
In Oz rooftop solar cost (albeit with phoney RECs subsidy) makes a lot of economic sense for commercial/factory use during daylight hours. Also for the all electric homeowner like mine where the golden rule is use it or lose it as your like neighbour doesn’t need your solar duck curve output anymore than you need theirs.
What you are missing is that the grid power costs are going up exponentially. It will always be lower cost to make your own solar power in Australia than using W or S from the grid. The grid has no advantage of scale but the disadvantage of distance. Sun is free whether on my roof or on a farm in central Victoria.
I agree that a small fossil fuel generator can lower the average cost but adds a bit of inconvenience.
Distributors in Australia are aiming to stay current with the neighbourhood batteries – so-called solar sponges. That might save the grid but it will be interconnected microgrids rather than a grid with large power generators.
The one thing that should never amaze anyone is the incompetence of governments. They have set in train an extraordinarily high cost electricity grid and there will always be a promise of lower power bills. And there is no longer a viable choice. Malcolm Roberts may be influential because he makes sense but he will never be in a position to control the agenda. Nothing will change. Costs go up, promise of costs going down – next election promise of costs going down, costs go up. It is quite clear this cycle of stupidity iOS never ending.
I have not paid any household energy bills in 5 years since I installed a wood burner for heating. Export electricity at 60c/kWh covers the cost of the small amount of gas used for cooking and water heating. I have maximised my electricity export by taking about half the load off grid. That system has now run for 12 years and is still doing the job. One of the first LiFePO4 household battery installations in Australia.
You are talking about the supply at the few households level. I have seen in some rural areas in WA they are removing the lines completely as the individual farms are better off with solar plus batteries rather than having very long supply lines . Its a fire risk as well
But once you get to even a small town the grid at the local level is still essential
Wind and solar are not a substitute for fossil fuel and nuclear. If wind and solar were eliminated tomorrow the world would be better off. The future for wind and solar is not bright, without government support they are dead. At some point even the least of us will understand this. It is just stupid.
If we are not going to go nuclear, then the best place for wind and solar is simply for recharcharging massive hydro storage systems that can then be used for dispatchable power. Of course large hydro is another thing greens are not that keen on.
Australia is transitioning from a coal fired generation system to one based on solar and wind. There is an accelerated program to do this driven by both major political parties.
Why? Why aren’t there more Oz politicians with a working brain? And here I always thought Australia was a down to Earth common sense people.
The people in general are indeed down to earth but there is diversity with the less capable attracted into bureaucracy and the worst of the worst into politics.
To see this effect in action look world wide. When you see a foreign leader for the first time the first question is always how that strange creature got to the top of the greasy pole of politics.
You can’t blame the politicians as the left have been very successful at infiltrating the total Education sector for a generation or so and it shows now. After the fall of the Wall and their ethos in tatters they turned their red coats inside out to present a green lining. They’re saving the planet now with the Road to Serfdom but what are we offering? The liberal/conservative paradigm has lost its mojo and any serious alternative paradigm. That’s the really big picture here.