Wind Power in South Australia has been a howling success; it now provides more electricity in the state than coal and in just a decade the wind industry has developed into one of the world’s leaders – and all to the benefit of South Australians.
Back in 1998 when the National Electricity Market was formed, South Australian generators charged more for electricity than generators in any of the other states. Today South Australian electricity is at its lowest price since the creation of the NEM and that is largely because of its choice to significantly develop its wind resources.
Wind Power costs a lot less than the savings it makes – it’s like a preventative measure; an insurance that you buy against high electricity prices. In the case of South Australia, they did just that and it paid off. According to the Essential Service Commission of South Australia wind power adds just 0.366c per kWh to the average South Australian electricity bill or just on 1 per cent (based on AEMC 2013/2014 South Australian 32c retail rate) The oft claimed outrageously high cost of wind is just $18.00 a year per household.
However offsetting this small cost is South Australia’s transition from having the highest cost wholesale electricity to the lowest cost in the country (AEMC 2013/2014). This lower-cost electricity has been a result of the Merit Order Effect, and a number of reports have quantified this value to consumers.
The Australian Energy Market Operator (AEMO) recently stated that South Australian pool prices are now the lowest since the start of the NEM, and data in a published report shows the wholesale price is half the ‘normal’ price when it’s windy, and shows that wholesale prices are at least 0.5c per kWh lower thanks to wind power in that state. The analysis was current until 2010, savings on wholesale electricity in 2011 are expected to be even greater.
This means that South Australian householders are paying 0.366cents ($18 a year) for wind but saving 0.5cents ($25 a year) on wholesale electricity. In other words, they’re already better off to the tune of $7 and we’ve only just started shifting to renewables. We’ve only just started, because South Australia is on 26 per cent wind power (25 per cent coal, 49 per cent gas), while Denmark – the world’s leader – is on the same, but is already building to its target of 50 per cent wind power by 2020. South Australia can easily do the same by upgrading its electricity grid interconnection to Victoria and New South Wales in order to become a wind powerhouse, exporting renewable energy eastward.
Uninformed critics of South Australia’s rollout of wind claim that the state would not save significantly on its carbon emissions, that it would burn as much, or more, coal and gas and that it would continue to rely on electricity imports from Victoria to prop up its high penetration renewable power grid.
None of this has proven to be the case.
As AEMO’s report makes clear, while South Australian electricity demand has increased over the period that the majority of the state’s wind has been installed (2005-2011), carbon emissions have reduced by over 15 per cent.
During the same period, South Australia deployed just 200MW of new capacity (other than wind) – a tiny amount given the increase in demand, and especially peak demand, in the state over the period – and 1,000MW of wind farms. This clearly shows that wind power does not require new backup generation and can be deployed well beyond 25 per cent nationwide before any significant augmentation is required to the current electricity supply system.
In fact, a huge amount of gas peaker and hydro has always been available on the grid, sized to replace the shocking instantaneous loss of a 500MW coal-fired power generators. Liddell Unit 3 in NSW tripped five times in just 40 days last year, with no production for over 3 days at time. These challenges have been proven to be far greater than the challenge of integrating wind power.
The real data from AEMO now shows that South Australia is burning less coal, less gas and, most importantly, importing less electricity (mostly brown coal) from Victoria – and wind output can be accurately predicted to 97+ per cent for each period. (Just ask AEMO, the people who run the electricity market).
Wind Works. It’s giving South Australia climate security through decarbonising its economy, energy security through reduced imports of expensive volatile fossil fuels. And it works so well that South Australia can now go further and target 50 per cent of the state to run on wind power and put much more solar on rooftops while planning to integrate this with Baseload Solar Thermal plants installed in locations like Port Augusta.
As for the rest of Australia, we should be ratcheting up our efforts and not missing out on the benefits that have been afforded to those in Australia’s least-populated mainland state.
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