For $6 extra, AEMO keeps lights on and defies renewable skeptics

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AEMO says reserve mechanism that ensured lights stayed on last summer cost just $6 per customer, and praises role of newly deployed technologies such as batteries and demand response.

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Remember the predictions of inevitable blackouts made before last summer? Conservative commentators were hoping, even praying, for a major outage – just to show that renewable energy didn’t work, and that we should all go back to coal.

In the end, it didn’t happen. Despite the fact that this was the second hottest summer on record, and the first without both the Hazelwood and Northern brown coal generators, the lights stayed on.

The Australian Energy Market Operator, under the direction of new CEO Audrey Zibelman, embraced the new technologies on offer, including batteries and demand response, to make sure that they did.

And, according to AEMO’s Summer 2017/18 Operations Review, released on Wednesday, it cost just an extra $6 per customer to obtain the 2GW of capacity in a special reserve that ensured there were no more blackouts or load-shedding.

“When it came right down to it, the cost of getting the reserves …. was $6 for the year, for consumers,” Zibelman told RenewEconomy.

“Basically two cups of coffee is what allowed us to make sure no matter what the weather condition was, we were in good shape and going to get through OK.”

RenewEconomy interviewed Zibelman about the summer report, and readers can listen to that interview via the link below.

The last summer was expected to be the trickiest one for AEMO, given that it followed the closure of Hazelwood, and came before the completion of new wind and solar farms, and additional storage. And given the problems of the previous summer.

Was AEMO surprised and relieved by its success over the summer?

“Pleased, yes. Surprised, no, because we put a lot of effort into our preparations,” says AEMO’s head of operations Damien Sanford.

“We are pleased with the level of cooperation that we got from industry, and the feedback from my control room was that it was the best we have seen for some time.”

Indeed, according to some in the sector, AEMO went around and “read the riot act” to many in the industry, to ensure that their machinery was in good repair and ready to deal with the summer heat.

As a result, coal availability over the summer was the highest it was for almost a decade, despite the well documented sudden trips in some generators that, thankfully for AEMO and consumers, did not occur at times of critical demand.

As for new technologies, Sanford pointed to the performance of demand response, particularly those gathered under the trial scheme sponsored by AEMO and the Australian Renewable Energy Agency, which helped boost the operator’s available reserves.

And he had a special mention for the performance of the Tesla big battery, officially known as the Hornsdale Power Reserve, which was switched on in December, and has delighted those watching its performance.

“We were quite keen to look at that type of technology, and to watch it perform … and the fact that it did perform as well as it did over the summer period was very pleasing for us,” he told RenewEconomy.

Sanford pointed to the battery’s performance in the heat – no signs, despite its location in the mid-north of South Australia, of any loss due to heat stress, unlike most other technologies – and he pointed to its ability to flex, and be available at periods of high demand.

AEMO, and others, have already pointed to the ability of large-scale battery storage to reduce prices in the ancillary services market, but Sanford also pointed to its role in helping meet demand peaks.

“It’s good to know that the reserve is there, and we can inject it very quickly (into the grid). Solar, and thermal generation can de-rate with high temperatures, but we didn’t see that with Tesla and we kept a close eye on it.”

Next summer, there are likely to be three additional batteries on the grid – one at the Wattle Point wind farm in South Australia, one with the Ganawarra solar farm in Victoria (Tesla), and another at a network juncture near Bendigo (Fluence).

“We are hoping to see the same level of performance with new batteries,” Sanford said. “We are quite excited about those technologies and the other renewables coming into the grid over the next 12 months.”

Indeed, more than 2GW of wind and solar will connect to the grid by the end of the year, and likely another 2-3GW in 2019, depending on final completion date.

To try to ensure that the lights stay on in the future, AEMO intends to introduce several new initiatives. One is the retention of the strategic reserve.

It used to be that AEMO could rely on previous data on likely temperatures to make preparations, but now there is a growing risk of even hotter days and more demand.

“We continue to see more and more hot days, more and more heat-waves over multiple days, and more and more hot weather over multiple regions,” Zibelman told a breakfast audience at the South Australian Chamber of Mines and Energy in Adelaide.

“We need a reserve to deal with fact that we may have another really hot day, and a generator out. The last thing we want to do is tell people there is no electricity supply when the temperature reaches 40°C,or 42°C, or 47°C as we had in New south Wales last summer.”

She noted that in the last summer, the added cost of the 2GW of reserve amounted to $6 per consumer.

“We’re happy we got through the summer without major incidents,” she said, pointing to the planning, training and extra reserve that had given AEMO “quiet confidence” that it would.

Zibelman is also focused on exploiting the enormous growth in behind-the-meter solar and (soon) battery storage, as well as calling on demand management rather than building new generation that might only be used for a few hours a year.

She also spoke of AEMO’s use of “machine learning” to help predict demand and supply, retaining the reserve mechanism and also implementing changes to the definition of lack of reserves notices (LORs).

This is the result not just of the ageing fleet of coal and gas generators, but also because of the likely continued increase in temperatures, and the increase in wind and solar. So AEMO wants to change the way that potential shortfalls are measured, just to be sure.

The idea has been flagged in various reviews by AEMO, including its response to the National Energy Guarantee.

The result of this means that instead of say, warning of a potential shortfall when the margin falls to 300MW in a given situation, it may trigger an LOR when the margin falls to 400MW. That will give it more room to move.

In the last summer, AEMO says there were only two close run events when it had to enact the emergency reserves known as the RERT mechanism.

These occurred on November 30 in Victoria and January 19 in Victoria and South Australia, when a strong heat-wave event hit both states the same time.

It used these and two other events – one on a public holiday on the final weekend of the Australian Open tennis tournament – to illustrate how these tighter reserve assessments will change the way it operates, and why it would more quickly summon emergency reserves.

In the November 30 event, rather than triggering a LOR2 (one level below actual load shedding) when there was only 594MW in reserve. Under the new rules, it would have lifted this margin to 1,094MW.

On January 19, the level would have been increased from 560MW to 1,099 MW in Victoria, and from 350MW to 501MW in South Australia.

On February 14, in coal dependent Queensland, the peak demand day for the summer, the LOR 2 level would have been increased from 750MW to 859MW.

To underline its reasons, AEMO pointed to increased temperatures and high humidity, and the increased threat that more than one big generator could be lost.

It points to January 28, when a heat wave caused electricity demand to reach record levels for a weekend of 9,144MW, as residents sat down to watch the tennis, switch on the air con and other appliances.

It modelled that scenario for a weekday, concluding that there would have been demand of 10,202MW, and reserves of just 71MW – inadequate to cover any unexpected failure.

Under the previous rules, some 500MW might have been activated, but under the new rules, it would require 860MW to maintain secure supply in the event of unexpected outages.

This is just part of a suite of mechanisms being pushed by AEMO to ensure adequate supplies as the nature of the grid is changed, and as more renewables enter the market.

So, given the success of the past summer, is the hard part over for AEMO? It says forecasts for the coming summer won’t be released until later this year, under its annual Electricity Statement of Opportunities, and its much touted Integrated System Plan.

In any case, Sanford says he is not fazed about the increase in wind and solar.

“We were never uncomfortable with higher level of renewables, we just needed to have a coordinated plan,” he says.

“The last thing that AEMO wants to do is to hold up renewables, but our primary responsibility is the safe and reliable operation of grid.”

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40 Comments
  1. Rod 6 months ago

    Just a little bit of luck involved too. If the SA and Vic heatwave was on successive weekdays it would have been very interesting.
    But SA had our emergency generators ready for a maiden run so never in doubt.

    And the local Mudrake newsrag (Liberal Newsletter) coverage of this:
    “The expensive day of SA’s summer.
    Power REMEMBER January 19? It was hot. And now that 42C degree day is going to cause more discomfort — this time in the hip pocket. ”

    Behind the paywall but I doubt any props for the Tesla Battery

    • Rick 6 months ago

      Was not so lucky for the 48,000 Melbourne homes without power during the final of the AusOpen. Blamed on a fuse but just at the right time to ensure air-conditioned comfort for the A-listers at the final. Imagine the bad press if the open ended up in the dark!

      • Rod 6 months ago

        I guess it depends on whether they feel the compensation is adequate.
        I vividly recall sweating through a 43C day in Adelaide due to a pole mount transformer failure.
        The $160 compensation I got didn’t make it any more palatable especially seeing I lost a summer day’s worth of Premium FiT credit.
        Distribution faults are the most prevalent reason for outages but I’m sure the MSM would have blamed RE.

        • Joe 6 months ago

          Hit ’em up for your lost FiT!

    • Ren Stimpy 6 months ago

      Ever higher concentration of CO2 in the atmosphere. The temps are only going up, for longer, encroaching further into the off seasons. Lucky for us in the city that we don’t have to rely on rain to grow crops.

    • Voldemort 6 months ago

      We should be ashamed paying $200 million of tax payer money for dirty diesel powered backup turbines when we could have paid a few million dollar a year to Northern Power station cover their costs to stay generating over the peak summer periods as they battled to stay profitable competing against wind farms which are subsidised to a tune of $80/MWh again by the tax payer. A very expensive exercise keeping the misinformed voter voting the “correct” way after the blackout. Journalists, please do the right thing and keep on seeking and publishing the whole truth.

      • Phil NSW 6 months ago

        You and I know the failure of the South Australian network had nothing to do with the wind farms. Please tell the truth. Business will only support profit making units. Wind and solar are cheaper than coal and you know this is fact so stop hiding behind this lame excuse of subsidises. By the way what is the diesel rebate?

        • Rod 6 months ago

          In the Lieberal dictionary, the Standing Diesel Rebate available for miners does not count as a subsidy.

          • Joe 6 months ago

            Its almost hilarious with Volde and the other FF clowns / Trollies that pop up in the pages of Renew Economy. Just because the Rupert says it is so ( that RE receives subsidies but FF doesn’t receive any subsidies at all ) does not make it so.

          • Rod 6 months ago

            I was reading a Guardian article last night and the paid trolls were out in force.

            A good indication an election is imminent. Bring it on.

        • Voldemort 6 months ago

          I must be in wrong echo chamber, please explain your reasoning. Why can’t we stop the subsidies then? Why does AEMO keep on directing the gas units on for system strength after the blackout? Bad political and ideological policy leads to bad outcomes.

          • Mike Westerman 6 months ago

            Yeah we’re convinced your in an echo chamber, probably somewhere underground…if you had a modicum of insight you would realise that the subsidies were necessary to move us down the cost curve as quickly as possible: transitions are expensive, and prolonged ones more so. The transition is patently inevitable – the only reason Australia has not hit unsubsidised solar prices as low as Saudi (ie LCOE<$20) is the cost of labour, but I spoke today to a senior engineer from one of the largest solar EPC and they are looking at a range of mechanisation processes that they are confident will get us close.

            AEMO is gradually backing off gas reserves as it gains confidence in use of inverters for FFR and support of system strength, but in any case, by 2022-23 SA will have significant pumped hydros to supply all the necessary inertia and reactive current they need.

          • Phil NSW 6 months ago

            Ask yourself why there has been no new coal fired power stations on the east coast in the last decade. The AEMO know they are too expensive. Nearly all the solar and wind farms being built are not government built and owned. The subsidies are the governments way of getting private enterprise to cough up the balance to ensure we have sufficient generation capacity as the ageing fleet of coal fired power stations are retired. Look around and you will see this is exactly what is happening. As much as idiots like Tony Abbott and Co rabbit on about coal it is being phased out. Get up with it and vote those idiots out as soon as you can. Gas is an expensive backup mechanism and is also being minimised and likely replaced with more intelligent technology. I agree bad politics got us in a mess and surprise surprise industry is fixing their mess up.

          • Barri Mundee 6 months ago

            The biggest subsidy of all is the deplorable failure to properly price the real cost of FF’s. All of us are paying for that. If a price on carbon is put in place, no exemptions, then the subsidy to support the inevitable and necessary transition to renewables can be phased out.

      • Rod 6 months ago

        Do try to keep up. I CBF debunking your entire PoS post but the lower cost Hazlewood was the main reason Northern couldn’t compete.

        • Voldemort 6 months ago

          Please do, I happy to review your facts.

          • Mike Westerman 6 months ago

            Like your namesake you have zero credibility so chances of your comprehending a fact is likewise zero

          • Voldemort 6 months ago

            It seems for some reason you are not willing to engage in an good and enlightening discussion, so you attack the person instead. Sorry, ineffective.

          • Mike Westerman 6 months ago

            I’m happy to mock those who hid behind pseudonyms out of weakness to stand behind their arguments.

          • Rod 6 months ago

            So you agree, Northern was a victim of low cost brown coal from hazelwood?

            Good, that’s one alternative fact you never need to quote again.
            What next? “Dirty Diesel”? That should be fun.

      • Tom 6 months ago

        $150m refurb and $50m punt on a new low quality coal seam was needed.
        Good luck with that! Alinta was smart and got out of Northern.

      • Rod 6 months ago

        Volde, I can tell by your post you read Murdoch. What are they saying in this article? You can cut and paste here for giggles.

        The expensive day of SA’s summer.
        Power REMEMBER January 19? It was
        hot. And now that 42C degree day is going to cause more discomfort —
        this time in the hip pocket. “

      • RobertO 6 months ago

        Hi Voldermort, Just a comment on your “Dirty Diesel Powered Backup Turbines, not that they have been run (other that normal testing and normal checking that they are OK to run which every diesel engine need anyway) they are actually cleaner that either Northern or Haselwood Power stations were.

        https://reneweconomy.com.au/frydenberg-factcheck-s-really-burning-80000l-diesel-hour-keep-lights-84966/

        As for the lie that all wind farms are subsidies to the tune of $80/MWh, lots of Wind Farms are off loading the LGC are part of the PPA made

        https://reneweconomy.com.au/origin-stuns-industry-with-record-low-price-for-530mw-wind-farm-70946/

        One of the best post by the CRAP MURDOCK posts is the story of Moree Solar and how a Saudi Prince was making $300 million out of the LGC in Australia

        https://reneweconomy.com.au/the-amazingly-positive-renewable-story-the-murdoch-media-wont-write-71224/

        As for the Truth never let a Jurno know that they install their own spin on every thing the write!

      • Coley 6 months ago

        The truth, the whole truth, and nothing but the truth? Coal is as dead as a Dodo
        Yours, Coley, 25 years as a real, underground, coal miner.
        From handfilling in low seams, on me knees (and often on me sides) to operating JOY 12 CMs in 20′ seams…done it all.
        And I take pride in producing what was needed at the time, but that time has gone.
        Now, concentrate on the future, while respecting the past.
        I, and millions like me, gave up our labour and our health for our future generations.
        Don’t let the bastards in the boardrooms of the FF industries keep on making fools of you, their only interest is in their share related salaries.
        While I have no real interest in seeing these people hanging from local lampposts ( appealing it may be, but the costs to local councils-;)..
        You can make a difference! as far as possible, elecrictivise your existence.

        • Rod 6 months ago

          Hi Coley, I’m “wrestling a pig” over the remaining coal at Leigh Creek. A link he provided shows ten year’s worth but I had heard from another source, they had only about 3 years of relatively high quality and easy to extract coal remaining.

          Any idea where I could get to the truth of the matter?

  2. Joe 6 months ago

    No doubt The MOANash groupies, the Kelly and his posse, the radio dickheads Jones, Bolt, Smith etc and Rupe and his newsrags will be blowing gaskets that $6.00 is another ‘Green Subsidy’ making unreliable RE….. unaffordable. Those Coaler Fanboys, they give it plenty and no doubt will be championing the Red Headed Bomb thrower from QLD with her call for a new Coaler to built in Nth Qld….Matteo COALavan with his NAIF $billions to the rescue????

    • Glynn Palmer 6 months ago

      But the experts in the industry should be able to demonstrate that new build renewables have a lower LCOE than new build coal HELE A-USCPC. Even without a price on the 700kg/MWh of CO2 they emit.

  3. Rick 6 months ago

    AEMO need a better proof reader. This is a footnote on page 6 of Summer Operations Report:

    AEMO applied a warming trend to historical data to adjust the data to 2017 levels. AEMO’s warming trend is based on CSIRO’s simulated future states of the Earth’s climate using Representative Concentration Pathways (the RCP4.5 model). This model predicts that the earth warms at a rate of 0.50 degrees per year.

    If the statement is as the CSIRO model predicts then CSIRO need a better model – the figure is fanciful.

  4. Carl Raymond S 6 months ago

    Giles. A special request please…

    Barnaby Joyce is hollering about AGLs disinclination to sell Liddell. The line is that greedy AGL wants to create an energy shortage and profit gouge. He cannot get his head around the notion that energy from the sun and wind is now cheaper than energy we have to dig for. Or perhaps he does get it and is simply doing what he can to protect the coal industry from RE competition.

    My fear is that the public will swallow the propaganda. Change of any type is generally feared, until it is proven to save a dollar. Anything you can do to set the public straight is appreciated.

    • Coley 6 months ago

      But why does he want AGL to sell it to a Chinese company in particular?
      Couldn’t have anything to do with Australian lobbyists and politicians having ‘financial arrangements’ with ‘Chinese corporations’ ….read Goverment.
      I understand their has been a lot of concern regarding the ‘reach’ of PROC into Australian government and business?

  5. Angus McFarlane 6 months ago

    Interesting that no blackouts were achieved with the highest output from coal since 2008.

  6. Kate 6 months ago

    What I’ve been wondering about is whether having multiple batteries in the system, all being capable of reacting in microseconds compared to older technologies, if they all respond to a sudden loss of frequency together (e.g. a trip in one or two of the big coal units – like the noted reaction by the HPR this past summer), is there any likelihood that their combined efforts to correct the frequency drop might overcorrect the loss and end up frying the network instead of keeping it steady?

    I’m only a layman in respect to electricity, so apologies if the question is particularly stupid.

    • hydrophilia 6 months ago

      Speaking as a general programmer, yes and no. Yes, because with stupid errors, power networks have been overloaded, even when a lot of this stuff was done by hand, so I’m sure we could write naive programs that would make similar errors. On the other hand, a computer program SHOULD be far more competent at micromanaging a grid and avoiding issues. My biggest concern, with or without batteries, is a malicious cyber attack on the grid.

    • Rod 6 months ago

      An interesting article here on that subject.
      https://reneweconomy.com.au/gas-plants-not-wind-may-have-been-at-fault-in-south-australia-blackout-37074/

      Coal or gas units over- react to frequency changes too but at a much slower rate than batteries. This hasn’t been helped by the relaxation of governor controls. For what purpose I don’t know. Maybe fuel saving. But by all accounts AEMO have started looking at the governor controls.

      I can’t put my finger on it, but a recent article here has a graph comparing the reaction of HPR to physical inertia and the difference in speed is stark.

    • PLDD 6 months ago

      As Rod said traditional generators like coal and gas used to over compensate. They usually needed to spin their turbines up or down to increase or decrease frequency etc. And like accelerating and decelerating any motor their are lags.

      But a battery switches off or on in nano seconds and is can be used far more precisely. As far as I know the battery operators bid battery power into the markete but AEMO is the one that controls how much is actually drawn down into the grid.

    • Cooma Doug 6 months ago

      Tough question with complex answer. I will be simple in response.

      1….if we measure frequency changes within 5 milli seconds, ( before the peak of the first half cycle) then respond within 20 milli seconds (one cycle) we effectively empower the load side to respond in a way that will eliminate power swings on the grid. The grid is effectively split into load zones but still retaining the backup of the grid.
      The removal of power swings
      and rapid proportional locational responses will reduce the need for system inertia.
      Every battery installed, big or small, will reduce the need for large synchronous gas peaking plant.
      Load shifting and rapid storage response will replace large peaking plant in the FCAS market. Eventually large base load will not fit into the mix.
      Building a large coal gen now would be crazy.
      One thing rarely discussed is when frequency goes very high when large loads are lost in storms and transmission faults. The same response as described above is even better as the local rapid responses switch from export to calculated import. The battery in this case going from discharge to charge effectively has double the capacity in disturbance responses.

  7. RobertO 6 months ago

    Hi All here is a different spin on the same story. The last two paragraphs (the first one often quoted the Babbott and Co (coal ash group or RWNJ’s in the COALition such as cow poo joice) are there as being worth the read. The second paragraph corrects the first and our lying pollies leave it out.

    https://www.smh.com.au/business/the-economy/costly-backup-power-saved-east-coast-from-blackouts-aemo-reports-say-20180522-p4zgu2.html

  8. LN 6 months ago

    It might have only cost consumers a coffee or two, but with AEMO’s new probabilistic approach to reserve levels and $20m to pre-activate the Portland smelter ~20 hours out, if some proper heatwaves had turned up this could well have costed consumers the cost of a nice coffee machine.

  9. TW 6 months ago

    Kate and others
    Stop worrying and fretting about hyper reaction and over compensation. Some of it has been created by journalists trying to get a dramatic headline.
    AEMO has very large and complex models of the system. They are used continually to check the dynamic response of the system and each machine. Talk of hand calculation is over 30 years out of date.
    To be connected to the system, each machine, be it rotating or static, has a dynamic response to system transients programmed into the excitation and governor controllers. The battery is not different, it is just that the voltage and power controllers are electronic. Before a new machine is connected, extensive stability studies are done using the AEMO model to test the response of the machine and the system during transients. The exact response of new machines is known well before commissioning starts and is confirmed during commissioning.
    Each machine response characteristic is defined in the connection agreement and is tested regularly – either by static tests or by analysis of the machine behaviour during transients such as a large machine tripping or a flashover on a transmission line.
    Controlling response of machines is complex. Don’t be paranoid about “overshoot” it is often deliberatly used to speed up response. The large batteries will overshoot if their response is programmed to do so, in fact, being too fast and too responsive can be dangerous.
    If there has been a dip in frequency, then things such as electric clocks will be running slow, so frequency is increased (read good overshoot) deliberately to bring them back into line.
    Stop fretting. There is good engineering going on behind the frontline crap.

  10. Ben 6 months ago

    I took away from the reports that there was enough gas, there was enough dispatchable generation and there were enough flexible loads, combined with lower demand. And plenty of grid strength issues in SA.

    http://www.aemo.com.au/Media-Centre

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