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Rooftop solar saved the day, but households got paid a pittance

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Solar power clearly played a major role in reducing stress on the grids in Queensland and New South Wales during the massive heatwave late last week, and keeping a cap on prices. But the owners off rooftop solar could ask the question: were they fairly rewarded for their contribution?

As we reported last week, coal and gas dependent Queensland (it has just one large scale solar plant and no big wind farms) has recorded more than 40 more high priced events in 2017 than renewables-rich South Australia so far this year.

According to Dylan McConnell at Melbourne’s Climate and Energy College, these spikes added more than $1 billion to the market. This compares with the $84 million coal and gas generators received from spikes in the wholesale market for the same period of time last year.

qld pricesLet’s put that in a little perspective. Consumers spent more in one month for higher priced coal and gas generation than they have for the past 6 years on the state’s generous premium feed in tariff, which Energex estimates at a total of $957 million.

What is also certain is that this rooftop solar, now totalling 1.5GW in the state and nearly matching the biggest coal fired generator in capacity, if not output, is putting a dampener on prices. We know that because the CEO of Stanwell said so, suggesting a few years ago that it was killing the company’s profits.

It is only now, because of the need to burn more coal to liquify more gas for the export market, that the coal and gas fired generators are able to exercise their market power again – or may be they are getting in before nearly a dozen large scale solar plants are built, such as the 116MW plant by zinc refiner Sun Metals near Townsville because it is sick of the high wholesale prices.

McConnell says it is difficult to assess how much higher the wholesale costs would have been without rooftop solar, but here’s a graph that shows how solar is making its presence felt.

qld solar price

 

Note how the prices do not go up until after rooftop solar begins its decline, and the competition from 400,000 rooftop solar units is steadily removed, allowing the mostly government owned coal and gas generators to set their own price.

It is reasonable to assume that the difference in prices if there were little or no rooftop solar would have been substantial. And what do solar households in Queensland get for it? For most of them, little or nothing.

According to Energex, there was 543MW of rooftop solar getting the premium tariff of 44c/kWh in the heavily populated south east corner as at the end of January. The amount getting the voluntary tariff, ranging between zero and 8c/kWh is 534MW. In February, that number would have overtaken the premium tariff capacity.

The households on this “voluntary” tariff, as in other states, are supposed to be getting something that at least resembles the wholesale price of electricity, or the cost of coal. (All pricing regulators ignore the network, environmental and climate benefits of rooftop solar, although Victoria is making some move to address that).

And what have the wholesale prices been in Queensland this year? According to McConnell, based on Australian Energy Market Operator data, it has been $260/MWh, and the average weighted for the  solar is production- and when most demand occurs – has been $320/MWh.

In February so far, those prices have averaged $409/MWh and last Saturday those wholesale prices averaged more than $858/MWh, or 86c/kWh, or more than 10 times the maximum received by households relieving pressure on the network by exporting solar to the grid.

Even the futures price, which McConnell and his team have argued would be a fair way to pay the rooftop solar homes – has been averaging more than $200/MWh, or 20c/kWh.

Of course, there is some debate about how to maximise the production of solar. Some suggest battery storage, and the best way to incentivise that just might be to reduce the feed in tariff, or “pay out” the remaining obligation to the premium FiT beneficiaries and use it to invest in battery storage.

Encouraging more solar panels to face west could also be useful, ensuring that more solar is consumer and/or exported to the grid later in the afternoon and early evening peak.

Theses graphs illustrate how west facing panels could push rooftop solar production further into the evening. The first graph is the estimated output of rooftop solar arrays in Sydney, Brisbane and Canberra if they faced west – that pushes it further int the evening. Canberra is further west so provides more output at 7pm.

sydney brisbane canberra solar profile

And this graph below illustrates the change the profile in Sydney, providing less at the midday peak and more at the network peak in the evening.

sydney north west

Addendum: It was surprising to see Andrew Probyn, the new political editor at ABC’s 7.30 Report, at work on energy policy again on Monday, choosing to focus on the dangers and high costs of “intermittent renewables” in South Australia, without ever mentioning the higher prices this year in coal-dependent Queensland and NSW.

We’ve already taken issue with Probyn for casually repeating Coalition talking points in his editorials. Just because the Coalition has ignored Queensland, doesn’t mean he has to as well. Surely this is a red flag to the program’s editors/producers? Kudos, though, for the program’s Matt Peacock for doing so – reporting on Queensland price surge – in a separate report.

   

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  • MikeH

    If they keep the FiT low, batteries will have the last laugh.

    It is not a coincidence that the world’s battery manufacturers are all setting up shop here.

  • john

    Just about every night i hear the not exactly truthful report from the ABC and am not a happy camper.
    I did make a comment on Fact Check on the Conversation about this very subject.
    It is pathetic that the ill informed personal employed by the ABC have such a tenuous grasp on facts that they just repeat the “post truth” or “Alternate Facts” put out by the disingenuous political persons who have no idea about the information at all.

    To me this is not healthy.
    The national broadcaster should present facts not false rubbish as they are presently.

    As to trying to point out that Queensland has had much higher prices for peak power than South Australia is a waste of time because no one is listening.

    I honestly think we are living in the age of stupid as emphasized by this episode.

  • Rob G

    Probyn was almost silent on the renewable debate on last Sunday’s Insiders. He knew he was out of his element and would have been slapped down if he brought his usual arguments to the conversation. Lenore Taylor knows her stuff as Probyn’s silence confirmed. Most amusing.

    • Rod

      Yep, saw that. Very amusing. I don’t think he could get a word in.
      He did start up but I think Barry shut him down.
      Both women know much more about the situation than he does.
      But we all know Insiders is full of “lefties”

      • Tom

        “Lefties” give me the shits.

        I’m not a leftie (I hope) – I think people should have the right to be rich if they earn it, and people should have the right to be poor if they earn that too. (All of this is dependant on a decent universal education system, so that people actually have a choice in their destiny.)

        Renewable energy (even though it is awesome from an engineering perspective) should not be a left-right issue. The “left” have taken it under their wing because it fits into their whole “self-sufficiency” dogma, and the “right” have opposed it because they hate the “left”. And also because the “right” receives many dollars from the incumbent industries, and – honourable folk that they are – feel obliged to return the favour.

        Renewable energy really should be a basic economic issue. This is the way the world is going – do you want to be a part of it or do you want to be importing it?.

        I’m really disappointed with the federal LNP on this one – the so-called “responsible economists” and “adults in charge” have been hopeless – betroven to their sponsors and useless to their voters.

      • Tom

        “Lefties” give me the shits.

        I’m not a leftie (I hope) – I think people should have the right to be rich if they earn it, and people should have the right to be poor if they earn that too. (All of this is dependant on a decent universal education system, so that people actually have a choice in their destiny.)

        Renewable energy (even though it is awesome from an engineering perspective) should not be a left-right issue. The “left” have taken it under their wing because it fits into their whole “self-sufficiency” dogma, and the “right” have opposed it because they hate the “left”. And also because the “right” receives many dollars from the incumbent industries, and – honourable folk that they are – feel obliged to return the favour.

        Renewable energy really should be a basic economic issue. This is the way the world is going – do you want to be a part of it or do you want to be importing it?.

        I’m really disappointed with the federal LNP on this one – the so-called “responsible economists” and “adults in charge” have been hopeless – betroven to their sponsors and useless to their voters.

        • Sean Sweetser

          OMG Tom. You just succinctly put exactly what I have been feeling. I am an engineer who works in Solar. And I am sick of being called a screaming leftie for my views on energy and climate change.

        • Rod

          I’d be proud to be called a lefty. Remember that universal education opportunity came from one of our biggest Lefties.
          The LNP have been attacking Aunty ABC for a long time accusing them of left leaning bias.
          Maybe in the early days the assumption RE was leftist was about subsidies (like FF never get them!)
          Now days RE is smashing that last bastion of doubt: Affordability.

        • neroden

          Oh, what’s happened is that the “right wing” has reverted to what they were when the term “right wing” was invented in the French Revolution.

          Supporters of inherited aristocracy.

          Universal education? That’s a left-wing idea! Keep the serfs slaving on the aristocrats’ farms! (I’m not kidding, that’s how right-wing leadership thinks.)

          • Tom

            It’s hard to exactly define left and right wing.

            I would say that there is a difference between socialism and egalitarianism.

            Socialism is a deliberate “leveller” – levelling incomes (via high taxes on high income and high payments to low income) and (in extreme cases) confiscating assets to level wealth.

            In socialism you’re not allowed to succeed and you’re not allowed to fail.

            Egalitarianism is only a leveller in opportunity. If you have the ability and industriousness to succeed, you are able to, and if you do not, then you will not.

            Egalitarianism allows you to become rich or remain rich but there is some onus on you to earn it rather than just inherit it, and it also allows to you become or remain poor, reflecting your ability and efforts rather than your birthright (or lack thereof).

            Essential to egalitarianism is quality public education – otherwise only those that inherit educational opportunity will have future opportunity to “succeed”, whereas those who do not will, as you correctly stated, continue to work the farms of the aristocrats – even if they are an impoverished Einstein.

      • Rob G

        Well if the government is any example – being a virtual hostage to the extreme right and thus right wing – then I’d say about 90% of us are “lefties”. It’s quite odd to have only one party in the centre. Unfortunately the polarising in Oz has made Renewables associated with the left alone – when everything about independence, business etc fit comfortably into a conservative approach – but then again we have Big Coal altering that logic…

  • trackdaze

    It will help if people shift their consumption to the solar hours. Dishwashers, pool pumps, washing machines anything with delayed starts or timers really.

    In doing so you can take comfort in knowing your giving the psuedo govt generators the archers salute.

  • Tom

    AEMO needs to let every household battery compete with the generators on a level playing field.

    Houses with batteries should have the option of having “smart inverters” which are remotely controlled so that their power can be sold to the grid via an automatic switch.

    The household could then enter their price-point for which they are willing to sell power to the grid via an internet portal – similar to internet banking. For example – if they enter 30cents/kWh, then as soon as the wholesale price hits $300/MWh then their battery will begin to be drained. If the wholesale price happens to be $500/MWh, then this household will be paid 50cents/kWh for their power even though they only bid 30cents/kWh – just the same as the generators are. If another house bid 60cents/kWh, then their power would not be bought in the above scenario, and they would only continue to receive their 6cents/kWh solar feed-in tariff (or whatever measly price they are getting).

    Imagine if, for the 2-hour period in NSW the other day when prices were $14,000/MWh, a house with 40kWh of battery storage was selling power at 10kW for those 2 hours. They would have made $280 for their 20kWh, and still had enough for themselves for the rest of the day.

    Now, THAT would be an incentive to purchase batteries, and more than just one.

    • Geoff James

      This can already happen, Tom, through an aggregator. The households need to team up so their combined batteries can charge or discharge a total of at least 1 MW of power. That means 100-200 houses at typical capacities.

      Provided the team is (i) in the same state, (ii) with the same retailer or other type of market participant, and (iii) has the right control interface provided by an aggregator, they can trade on the National Electricity Market. Well, sure, it’s not easy, but it can be done and at least one business has managed to deal with the complexity and offer a customer-focussed product.

      You won’t make a killing on the market with a battery because its capacity is fairly small and worth say $3-5 per charge at the prices you give. But you get other benefits, and potentially other earnings, that make it worthwhile overall.

      • Tom

        I didn’t know about the aggregator thing, but it needs to be done on an individual household basis.

        If ANZ E*Trade can do it with shareholders, I’m sure a similar platform can be set up for energy traders.

        $3-$5 per charge is not much, but at many times of the year, this is all that your preserved energy is actually worth on the wholesale market. I think that if people are being given a fair market price they will accept it better than if they are being paid 6cents/kWh when the market price is $14/kWh – even if for large parts of the year the market price is only 3cents/kWh and they were still getting 6cents/kWh.

        I think this is the way of the future:
        – First people start earning $260/day many days (will only take 150 of these days to pay off a $40,000 battery array).
        – Then more people take it up, reducing the cost of batteries as they do so due to mass production efficiencies.
        – Then there are less price spikes (as the batteries smooth them out), and electricity becomes cheaper overall. However, the $260/day scenario becomes rare then extinct.
        – Then large-scale intermittent renewable energy becomes more usable – especially if these batteries can also auction to buy at market price (plus a transmission cost margin).
        – Then large-scale renewable energy becomes cheaper (again, due to mass production efficiencies)

        Everyone’s a winner – except for the coal miners and generators – who unfortunately happen to sponsor the current government.

        • Les Johnston

          The aggregator system is a means of reducing competition in the energy market. Eliminate competition helps the large fossil fuel generators to maximise profits. Quite simple market economy activities but change would impact those profits!

    • solarguy

      I agree as long as you have some storage left over for self consumption later on. You could have your cake and eat it too. Yummy!

      • Tom

        +1 – You’d have to be able to nominate the energy you are willing to sell and also at what power and price.

        • solarguy

          Well of course.

  • Malcolm M

    What time of year are these graphs for, and does it include daylight saving time ? The solar output profile would change through the year. I doubt the 7 pm peak for Canberra is because of it being further west, because the solar peak is only 2 degrees west of Sydney, which would mean a solar peak 8 minutes later ((2/360)*24 hr/d*60 minutes/hr = 8 minutes).

    One of the best locations for a west-facing solar farm in NSW would be close to the 220 kV line near Wentworth. Being 9.1 degrees to the west of Sydney, its late afternoon drop-off in power output would be 36 minutes later than for west-facing panels in Sydney.

    • Mike Shackleton

      The production curve and wholesale price chart is an average for 2017 to date, for Queensland that doesn’t have daylight savings.

  • MaxG

    Only one conclusion: get batteries and disconnect…
    they will not change, and keep telling lies…. it won’t get cheaper… and the public will always be screwed! It is how the system is set-up to work…

    • Barri Mundee

      Too expensive for me Max. The retailers have been increasing the daily supply charge by a greater percentage than per Kw charges though (I’m in Victoria) thus gradually whittling away at the benefits of solar.
      This should not be permitted!

      • MaxG

        Hmm, I said elsewhere: I took my annual electricity bill, multiplied it by 15 and used that money to build PV and battery… no more pay 🙂
        In fact, my consumption has since increased by 50%, cost has gone up: still no more to pay.

  • Chris Drongers

    How many GWhrs of power above the ‘baseload’ is represented by the evening spike? It would not take many 240 MW Genex-type pumped hydro stations to remove the need to ramp thermal power stations to match.
    Without the evening spike it seems (from this article) that many existing power stations, and certainly any proposed yet-to-be-built coal or gas fired station would be unprofitable without a substantial increase in the price of baseload power.

    With solar already at US$50/MWhr in the latest Indian auction this certainly confirms that new coal and gas would be unlikely to be competitive against matched solar/pumped hydro.

    Time to run the comparison.

  • wmh

    Giles, what is the panel angle used in the calculation of the power vs hour of day graphs? The latitude angle? Seeing that most people get home in the late afternoon, would there be an even greater late afternoon output for panels more nearly vertical and what might an optimum angle be?

    • john

      The best place to work that out is PVWatts, from NREL I will give you the link.
      This works for anywhere on earth it takes the nearest information from BOM you input the angle the aspect the size of array etc. The output is in CVS form.
      Home page. http://pvwatts.nrel.gov/
      Estimates the energy production and cost of energy of grid-connected photovoltaic (PV) energy systems throughout the world. It allows homeowners, small building owners, installers and manufacturers to easily develop estimates of the performance of potential PV installations.

    • solarguy

      Near vertical angle would be great in late afternoon, however in winter that optimum doesn’t last long and by that time yield is fast dropping off as the atmosphere is thicker at that low angle. Better to install west facing panels at roof angle 22.5 that way you get higher yields from just before noon all the way to sun down. Trackers are the only practical way to take advantage of all sun angles, but expensive.

      • wmh

        Now that FITs are more or less history, we have the opportunity to tune elevation and azimuth to suit some particular purpose. In winter, I agree, one would rotate the panels back to a more conventional angle and direction.

        • solarguy

          Yes most cost effective. Sometime in the hopefully near future better building standards will enable more roof area for solar (n,e and west) technologies to be installed on housing, as well as solar passive design, because at present their building shit boxes that cost a motza to heat and cool.

  • Robert Engle

    Why the hell is the ‘Contribution to market turnover’ chart laid out like that?
    For that matter only the 2 outside bars are measuring the same thing.

  • Greg Hudson

    If I knew how to do it, I would start an Australia wide community power organization targeting solar homes. Start by offering them a FIT based on the actual wholesale price as per the AEMO web site:
    https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard

    For example, when the price hits $13800/MW (just under the maximum allowed of $14000/MW) which it has done frequently in Qld, a user with a battery could be paid a massive $13.80/kWh. Which looks fine on paper (at first). You would think that with a FIT like that, you would have your battery paid off in no time – right ? Well not so fast…
    The sneaky gas peakers (who are the ones creating these huge spikes by gaming the system) would suddenly have to compete with millions of batteries all across Qld (or wherever a peak was happening), so, in effect, the peak would simply not be there. In other words, the batteries dumping power would kill off the peakers. This would be a huge kick up the arse for the whole industry.

    The other problem is ‘how’ the peakers (and others) can force up the price, and rely on the AEMO 30 minute transactions to endure for what may be only a transient spike in prices. The sooner 5 minute payments are introduced, the sooner the ripoff should stop.

    Urth Trader would be ideal (if it was still in business). See:
    https://www.urthenergy.com.au/spot-market-price
    This is the only retailer I have found that was doing anything decent for solar producers. Such a pity 🙁

    Comments / corrections anyone ?

    • Barri Mundee

      Definitely good ideas but the problem is one of power, political power, to make some of these great ideas happen. We are not completely powerless but the big players currently have the whip hand that perhaps only a change of federal government MAY change.

      • Tom

        I’ve written to my local Greens senator hoping that he might throw it into the debate.

        Maybe I’m biased, but to me it’s just so bloody obvious – how could anybody logically argue against it? It kills many many birds with one stone.

    • Tom

      At the moment there might be 5000 batteries in a state (at most) which could each supply 10kW. That’s only 50MW. And as most houses don’t have much more than 10kWh, they could only do this for an hour.

      If there were 50,000 batteries each supplying 10kW, this would be 500MW, which is a significant amount of power and may well clip off some of the big peaks.

      My point is – the early adopters would be able to cash in for some years yet, encouraging many others to adopt, so that we get from 5000 to 50,000 batteries and beyond, and bigger ones at that.

      • Mike Shackleton

        My understanding is that the shortfall in generation for those 2 hour periods where load shedding was required was in the order of 250 MW . That could easily be met by the 50k batteries you are talking about. Also, why not put more single axis tracking (or at the minimum, west facing panels) in the west of NSW? Just past Silverton there is a ridge line that faces west over a dead flat plain. West facing panels there could generate at near capacity right until the moment the sun touches the horizon.

        • Tom

          I know where you’re talking about – the opening scene from Mad Max 2.

  • I keep talking about the same thing in reply to every article because it really does solve so many problems with energy. Households can get paid much more fairly with local electricity trading. Local electricity trading with blockchain microgrids makes solar and storage more economically viable, which will help to accelerate their deployment, and thus make the grid more reliable (as well as demand management and energy efficiency). It is also important to reduce the need for air conditioning by designing with climate, using external roller blinds, cool roof paint, etc. I recommend looking at this campaign: http://www.foe.org.au/rase_campaign, and this petition: https://secure.avaaz.org/en/petition/The_AEMC_Reconsider_the_change_request_for_local_electricity_trading/?cKTpNib.