rss
18

Rooftop solar reshapes energy market in South Australia

Print Friendly

Rooftop solar continues to have a dramatic impact on the energy market in South Australia – the Australian state with the highest penetration of rooftop solar.

As these graphs provided by Melbourne Energy Institute’s Mike Sandiford illustrate, the proliferation of solar PV is not just having an impact on overall demand in the state, it is also shaving and reshaping the peak demand curves.

The impact of solar PV in South Australia was recognised by a special study by the Australian Energy Market Operator last August. As we reported then, South Australia had some 267MW of rooftop solar as at June 30, representing one in five households. AEMO said rooftop solar was accounting for 2.4 per cent of overall demand, and more than one-third of the PV systems were operating at the time of peak demand at any one time.

These graphs deliver a further illustration of their impact, as they illustrate what happened in the latest months of December and January, traditionally the period of hottest temperatures and highest demand. (If the graphs are not easy to read we suggest you click on them to see them better).

The ones immediately below show the average demand curves in South Australia over the last five years. The pink line shows 2012/13. As Sandiford points out, midday demand in SA this summer is down 15 per cent on where it was five years ago, even though night-time demand is up, confirming the impact of solar PV.

“Overall, total demand is down about 3 per cent over the same interval,” Sandiford says. “I am betting all the pundits would have been expecting it to rise more than 10 per cent over that interval.” This accords with the AEMO estimates.

SA_2008_TD_time_of_day_average

The following graphs, below, show the peak demand for the summer months. As AEMO noted last year, the peak demand times in the state are usually around 3pm and 4pm. The pink line shows that solar PV has been able to reduce those peaks, to the extent that the peak has now shifted to a smaller peak around 5pm, reducing the need for costly infrastructure and expensive gas peakers.

This is despite the increasing use of air conditioning, which is reflected on the graph on the right, showing that overall demand has increased around 5pm to 6pm compared to previous years.

As Sandiford notes from these latest graphs: The profile is  becoming both more skewed to peak in the very late afternoon, but topping out at lower levels than one might have expected from non daylight hour demand.” He estimates that solar PV has shaved between 5 and 10 per cent off the peaks in South Australia.

There are now smaller peaks in the morning and the evening, which might suit gas-fired generators, but not coal generators. In any case, the shift has probably removed the need for around 150MW of peaking power plant. As UBS noted last week, the impending surge in battery storage will reduce the morning and evening peaks too.

rooftop solar - time of day peak

As Sandiford has noted previously, and as UBS concluded in the case of Europe, the proliferation of solar PV is having a dramatic impact on the economics of existing generators. In fact, it is causing a revolution in the energy market – and this is without the impact of wind, which in South Australia has already exceed 20 per cent of supply.

In South Australia, the state’s only two coal-fired generators have been put in mothballs, with the Playford plant closed indefinitely, and the Northern plant opening only during the months of highest demand. These latest graphs may question whether that was worthwhile.

But what would happen in the future? Sandiford has extrapolated the deployment of solar PV in the last five years and assumed that would continue over the next five. The results are amazing – the blue line is the key, it basically turns the midday peak into an off-peak period, taking a massive chunk in revenue from the generators who rely on spikes in demand, and the accompanying pricing spikes, to break even.

Given this impact, one would wonder what that does to the plan by utilities to introduce time-of-use pricing to encourage a shift in demand from the peaks to other times of the day. It would seem that the peak has already been shifted.

 rooftop solar - South australia 2018

RenewEconomy Free Daily Newsletter

Share this:

  • Roy Ramage

    Hey Giles. Recognition at last. If you have time please see http://www.solarprogram.com.au It shows our Council PVP retrofit program which we kicked of in 2009 and which was adopted by the LGA soon after, much to our delight. Keep up the solid reporting.

  • Max

    Fantastic graphs. Would love to see if they change much for the few days in this period that normally have the maximum peak, rather than averages as shown.
    This combined with recent articles about the increased reliability of PV output when considered over a large area surely can’t be ignored for too much longer.
    More studies like this please!

  • David

    The old paradigms of peak and baseload just go out the window with a high renables grid. Flexibility will be the key. Smart meters can still help reshape demand using controlled loads. People may find their hot water system running sometimes at midday and sometimes at midnight.

  • http://www.mutilatethemortgage.com Mortgage Mutilator @ Mutilate The Mortgage

    I wonder if those predictions even take into account the massive leaps in cost reductions that are happening like with V3Solar and so on…

    Can’t wait to go fully off grid solar :-)

  • Beat Odermatt

    I still remember the situation during the late 1990th. Power outages were common and elderly people died because the power went out usually during the hottest parts of the day. I do also remember getting nice bonuses from my employer (a power company) because the peak price was extremely high, resulting in windfall profits for power generators. In South Australia, greed overtook foresight and millions were invested in overhauling the old Playford Power Station.
    Changing towards a more democratic and cleaner power generation may have caused harm to a few companies, but it has delivered overall massive benefits to customers and the environment. There should be a rooftop solar system on every home, school, business and Government building.
    We will see the anti-environmental lobby working hard to oppose more wind farms and more solar installation. In history, the abolition of slavery caused harm to plantation owners and slave traders. The energy revolution will have also losers and winners. Both initiatives are good for humanity, but bad for a few individuals.

  • matt

    Hi Giles, thought provoking information! What would the graphs look like if there was enough solar to remove the 2018 morning and evening peaks (well, as much as possible during daylight hours anyway)? Would the mid-day demand approach zero gigawatts? 0.5 gigawatts? would peaking plants only be needed at night during the summer months?

    • Giles Parkinson

      Well now, that is interesting. Here’s a thought. Let’s say amount of rooftop solar more than doubles, battery storage costs as predicted come down and takes out much of the morning and late arvo peaks, energy efficiency further caps demand, commercial rooftop gets a look in (it networks agree to connect it). Not a lot of demand left for base load. So who going to do peak? By then, how much will solar thermal with storage and dispatchable energy cost against new build gas leakers (which are pricey anyway). We may be closer to 100% renewables than we think.

      • Warwick

        Giles,

        I’d suggest that if that happens that the gas peakers and others will make sure spot prices spike to recover their costs over less frequent times in a given year. 2013 spot activity in Queensland is a good guide i.e. periods of low spot prices but some pretty high spot at other times making spot more volatile and energy contracting more risky.

        100% renewables would be great for the planet but still some way off here.

  • colin

    what I would like to see is the solar combined with sa wind. http://www.windfarmperformance.info has daily graphs, and it makes an interesting overlay for a notional renewables combined output. I’m not sure if they have compatible data for the solar data presented here to get an accurate graph

  • OC

    Would be interesting to show these charts for the impact on winter average and peaking demand. There are a significant amount of markets in Australia that are winter peaking and a great many more that are only a couple % off the summer peak. Given solar produces 0% output during the winter evening peak of 7-8pm the benefits of reduced summer peak demand from solar could easily be significantly overstated. Further one has to factor in that network costs are recovered over average demand. Given average demand is being reduced by a greater % than peak demand solar PV is likely to increase network costs per kw/h further.

    • Beat Odermatt

      The reduction of peak demand overall is deferring the need for massive expenditures to improve the distribution network. It can be argued that it provides for savings to distributors. The distribution companies on the other hand will still try to increase prices. The fact remains that power distribution companies remain some of the last legal monopolies and they use the monopoly power to charge what they can.

      • OC

        You don’t seem to understand the regulatory framework and the building blocks model that drives network pricing.
        Firstly while it is true that in SOME markets the need to add capacity will be reduced it is not in all markets as some will be winter peaking (or become winter peaking as the summer peak rises slower) and therefore will not benefit at all from reduced expenditure on network assets.
        Even in those markets where network spend is deferred the fact is as volumes carried by the distribution networks fall faster than the regulated asset base falls due to depreciation the price per kwh consumer will have to rise to recover the almost entirely fixed costs of the network.

        • Beat Odermatt

          In Australia, we still have ugly, 19th century type overhead power lines. I have seen very few positive changes in this regard during the last 25 years. More charity from Governments and consumer is not going to make them to improve the networks, only stricter legislation .

          • OC

            Sorry what on earth does that have to do with the fact that the proliferation of rooftop solar installations will lead to rising per Kwh network costs?

            Don’t get me wrong. I’m in favour of increased renewable generation but people should be aware that the ‘grid parity’ of rooftop solar only exists because of a flawed pricing methodology for network costs (and several other fixed costs) that sees solar PV owners cross-subsidised by other users.

          • Beat Odermatt

            The conspiracy type theory that rooftop solar installations cause higher distribution costs and may be “subsidised “ by other users is about the biggest bull I heard for a long time. You know very well that without rooftop solar installations, the peak price for power during extremely hot weather would be possible 10 times as high as is currently the case. You also know very well that most of the rooftop power regenerated is actually used within 500 meters of the rooftop installation, lowering the load on long distance high voltage distribution networks. I suggest that we may follow the lead made by Germany and Britain and support micro power stations across Australia. The widespread installation for example of Ceramic Fuel Cells (Bluegen) would overcome the need for more new power stations, new high voltage distribution networks and would lower the winter peak demand.

          • Roy Ramage

            Correct! The proof of concept is in. The science proven. Solar and wind change things. Now how can we get every hous shed farm and factory to install them cost effectively so we can effect CHANGE.

      • OC

        Mate it really isn’t very hard to understand if you take the time to listen. There is no conspiracy just simple math.

        Solar PV causes the PER KWH network cost (not the overall network cost) to rise because it reduces the VOLUME of electricity carried over the network.

        The costs on the other hand of a network are almost 100% determined by the capacity of the network, not the volume carried (costs being opex + depreciation + regulated return on invested capital).

        As you reduce the volume through more PV used on premise (without reducing the network capacity) you have to raise the PER KWH PRICE to recover the same amount of revenue.

        There is a cross-subsidy because PV users do not contribute their full share to the recovery of the network costs (as a significant proportion of their consumption is consumed on premise). For them to fully contribute their fair share you would need to charge them based on their capacity usage at the network peak NOT based on their overall volume of consumption (as is currently the case).

        • Beat Odermatt

          You can try all different pseudo economical formulas and you won’t be able to change facts. Solar installations have NOT increased costs to distribution networks. If these solar installations would not have occurred, the summer peak could be enormous. In such a case the distributors would have to improve the network and could justify increases of charges. Widespread installations of solar PV enabled energy distributors to avoid such expenditure and helped them keep the cash and make nice profits. These companies are a monopolies and have no competitors. They entered the market in the hope to make bigger and bigger profits every year. The reality is that not a single private business is guaranteed a set profit. Can you explain why Millions of hard working Australians should guarantee higher profits to a few? In a real world, profits go up and profits go down. This is called free enterprise. The biggest dream of any investor is a company which has no risks, has an guaranteed profit and can increase profit every year.