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Ramp rate: Australia’s slow moving gas plants

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The Australian Energy Markets Commission, the country’s principal rule maker, is due to deliver a paper later on Tuesday (after RenewEconomy’s newsletter bed-time) on the request for a change in the 30 minute settlement period to a 5 minute settlement.

The change has been requested by big energy users to help reduce “distortions” in the market and lower prices, and – more importantly – to deliver a signal for battery storage to enter the market with its ability for instantaneous response.

The move is being fiercely resisted by the fossil fuel generators, who fear the loss of competition, the loss of their ability to manipulate the market, and therefore the loss of revenue.

It’s hard to imagine the AEMC deciding against the 5 minute rule, although some would say it’s been hard to imagine many of its rulings. But the key will be in the extent and structure of the transition period. Unlike Australia’s switch to a floating currency, it won’t be overnight. Hopefully, the battery storage developers say, it won’t be phased in over too many years.

Here’s a few graphs to understand why the fossil fuel generators are so against the idea of encouraging fast-response: their generators are shockingly slow. They simply don’t react quickly enough from a standing start to compete within a 5-minute period, let alone with battery storage.

COLONGRA

BRAEMAR

OCGT_FSIP

Dylan McConnell, from Melbourne’s Climate and Energy College, provided these graphs and notes that if he did the same for battery storage, it would simply be a vertical line – the time of synchronisation is one hundred milliseconds, and the time to full load is less than one second, and time to close down is less than a second.

Still, the fossil fuel lobby appears to have been working hard, convincing Coalition Senators that the 5 minute rule should be resisted, because ….

“Coalition Senators comment that the market price is currently averaged over 30 minutes. If generators were expected to jump on and off the grid every 5 minutes, the stability of the grid will be compromised. “

No it won’t. But anyway, they also said this:

“Many generators need more than half an hour to synchronise to the grid and have set forward contracts.”

Yes. But that’s not a reason to stand in the way of new technology, which, as the new head of the Australian Energy Markets Operator Audrey Zibelman has pointed out, will result in a grid that will be faster, cleaner, cheaper, and more reliable.  

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  • Mick

    “… fear the loss of competition” ?

    I think they fear the *introduction* of competition. Or perhaps more accurately – from the those graphs – the loss of revenue from a something they really shouldn’t have been revenue from in the first place.

    • Jonathan Prendergast

      Or ‘increased competition’.

      • jamcl3

        Or they mean losing their own competitiveness

  • George Darroch

    Typical Coalition, talking about free markets but distorting them grossly to favour powerful incumbents.

    (I’d usually say, Labor, but on energy at least they now get it.)

  • Ray Miller

    I’d say they are intermittent from the evidence above, no way they can respond quickly and efficiently. I think once the new battery systems are on line and proven we should see significant efficiency gains in the system as the need for spinning reserve is dramatically diminished. So if the existing players have been lazy and failed to invest to make their own business more up to date and relevant no tears will be shed.

  • MaxG

    While I understand this place to be about renewables… all this lamenting and bickering seems pointless to me, because it is obvious… once it is understood what the liberals stand for, what is referred to as neoliberalism, it becomes a 100% clear that they cannot jump out of their skin… it is all about privatise profits and publicise cost. This is what they stand for: replace renewables with any other noun; e.g. education, health, it is all the same. It explains whatever politics they are ‘playing’.

  • Craig Allen

    Surely the owner of any fossil plant has the option to also install a battery enabling them to have the same flexibility and to be able to participate with the same agility in the energy market…

    • Nick Thiwerspoon

      Just so.

  • Just_Chris

    Thank god we have carefully thought about the way our energy generators work, deeply studied our market and then applied international best practice to ensure a fair and open market that is immune from being gamed by a small group of generators…….. oh hang on, I miss understood, it appears the gas industry p****d us off so we kicked it in the balls. What is there to stop the battery or wind industry from jumping in and out of the market every 5 min to manipulate the spot price? As the article points out the gas turbines can’t change fast enough to stop this behaviour so the five min rule simply hands control to a different technology family.

    • Chris

      I think you might have missed the point of how the 5/30 minute system is open to exploitation, how the market prices are set and how batteries may be utilised? Does seem to be a good idea for us all to be well informed, though.

      • Just_Chris

        My personal opinion is that we should change the rules so that it is illegal to manipulate that electricity price not that we should change the system so it favours a different player. When a group of bankers fixed the libor exchange rate they were charged under criminal law, that is what should have happened when a group of power companies fixed the power price. I personally want to see more renewables and batteries in the grid but not like this.

        • Just_Chris

          BTW it is just as easy to game the new system as the old with a inverter based technology – you Zero bid for 25 min until all the generators are turned down then push the price as high as you like, same thing can be done with a solar farm or a wind farm.

  • Jonathan Prendergast

    Let’s be honest, we need the existing gas generators to stick around for a while, and they will need revenue to stay in the market.

    More renewables are being built, which will result in gas generators generating less, but we need them there to provide capacity when needed. To reduce emissions, we need to reduce gas fired generation in volume, but not capacity just yet.

    This rule will open up an opportunity for batteries, and hopefully see more investment in them. But it will also cut off a revenue stream for gas generators. Maybe the introduction of this rule should be coupled with new revenues for availability, particularly as AEMO have stated that SA will need at least 2 gas generators running all the time for the medium term.

    • Nick Thiwerspoon

      As Craig Allen says, installing batteries within your generating plant (whether gas, coal, wind or solar) is open to everybody. So if it takes 20 minutes to dial up your gas plant, put in batteries to provide 30 minutes of storage. While your plant is gathering speed, the batteries will have already responded to the price signals. It’s a win/win for everybody.

      • Jonathan Prendergast

        Its a good idea. It will take extra investment by gas generation owners, and also there will be diminishing returns as more batteries are installed around the grid.

        So my point still stands. It will reduce revenues for gas generation. Gas generation we need to exist for a while longer. We don’t need new gas IMO and we need gas generation to generate less, but we need it to be around.

  • Mike

    This is an interesting thought but batteries are different animals to a power station. The comparison is between a gas power station and a battery and an assumption made that a fully charged battery will respond much more quickly than a gas power station starting up. But how did the battery get fully charged? It must be prepared for the response. Given that the gas power station can respond just as quickly if it is prepared by being already running there is no difference. Large amounts of renewable energy must be devoted to keeping the battery charged. This means not only you will need the batteries but also given the variability of wind a significant increase in renewable energy will be required.

    You mention the performance of Colongra Power Station and how it compares with a battery. Such a station can deliver 80% of it’s plate capacity that is 13,900 MWh in a day. This power station was bought by Snowy Hydro in 2014 for $234 million. A similar price to the mooted 100 MW battery installation in South Australia. It is expected to be able to deliver 100 MW for four hours. In terms of energy storage that means 400 MW hours. That means it is 35 times smaller in capacity even though it will be one of the biggest in the world. The justification can only be environmental there certainly is no economic sense. As to price what is not included is the additional renewable energy capacity that must be installed to support any battery.

    As to the viability of the particular power station Colongra on examining of the data I hold from the AEMO it ought to be gone fairly soon. Being a peaking power station in 2016 only 23,970 MWh was produced by it. That is less than 1% utilisation. Does it only survive because the government owns it? It cannot possibly be paying its way.