The Australian Energy Market Operator has declared it is ready for summer after doing all it can to prevent blackouts this summer after finding nearly 2GW of new capacity and improving its systems.
AEMO has launched a comprehensive campaign, which in tandem with initiatives from the state and federal governments has resulted in more than 800MW of re-opened gas generators, nearly 900MW of demand response, and nearly 300MW of temporary diesel generators.
It has also welcomed the new Tesla big battery in South Australia, clarified and refined intervention powers for the South Australian and NSW government, provided added training to its own operators, and tried to make sure the fossil fuel fleet is in as best condition it can be.
But while it says it should be able to meet reliability standards, it’s underlined the fact that the biggest threat to supplies this summer will be the unexpected outage of major equipment, most likely the failure of a transmission line – in storm or bushfire – or the failure of a gas and coal plant.
That much has been underlined in recent weeks, particularly in Victoria, where the absence of three big coal units totalling 1,500MW (most of it unexpected) has forced AEMO to issue several low level warnings of potential supply issues in the last week.
AEMO is under intense scrutiny after the failures and outages in the past 13 months – from the state-wide blackout in South Australia in September, 2016,, to the load-shedding in two states in February this year and near misses elsewhere.
New CEO Audrey Zibelman, who took over after these events, is not guaranteeing that the lights can stay on 100 per cent of the time, or even the legislated reliability factor of 99.998 per cent of the time, but makes clear that any such promise would be fraught with danger.
“We now have a range of dispatchable resources that can be used to strategically support the market as required, including battery storage, diesel generation and demand resources,” Audrey said in a statement accompanying the 26-page Summer Readiness report.
“AEMO is confident that we have taken all the necessary actions – and then some – to make sure we are ready.”
Zibelman said that for AEMO, “regaining consumer confidence in the reliable operations of the system this summer is a crucial and fundamental first step in regaining confidence in the whole of the NEM.”
It’s also fundamental for the future direction of the grid. While the S.A. blackout was used by conservatives as an excuse to attack renewables, what has become clear that the biggest danger to supply was the ageing infrastructure and out-dated practices.
Fossil fuel advocates have made it clear they will seek to blame renewables whatever the reason for lights going out. That much was made clear by former deputy prime minister Barnaby Joyce, whose electorate is probably home to more renewable energy projects than any other.
He told the Clean Energy Summit earlier this year that the biggest threat to the industry (apart from the Coalition’s own policies), was the lights going out in Sydney.
Zibelman also used the AEMO report to make clear her vision of the future. As she has said previously, this future resolves around the inevitability of more renewables, the use of more demand response, and changes to the way the grid is managed and the rules are set.
Notably, the AEMO document made no mention, even on the chapter on future plans, of the National Energy Guarantee.
Zibelman is known to favour “day-ahead” markets, which would hold fossil fuel generators in particular accountable for availability, and impose penalties on any that suddenly decided to withdraw capacity at the last minute for spurious reasons, as the big generators have been accused of doing by politicians, network operators, consumers and regulators.
The document made some other interesting observations.
One was the role of rooftop solar in the future and its ability to meet and minimise peak demand – the events that happen for just a few hours of the year and yet are responsible for oversized costs of networks and generators.
“Overall, the peak is expected to fall in most NEM regions in the next five to 10 years. In this period, maximum demand is expected to keep occurring during sunlight hours while rooftop PV is generating, so forecast growth in rooftop PV will reduce demand from the grid,” it says.
The table above shows the amount of rooftop solar PV capacity and its comparison with expected maximum demand in each state. It ranges from 66 per cent of maximum demand in South Australia, where rooftop solar is expected to account for all on minimum demand within a decade.
It also noted that the number of LOR (lack of reserve) notices issued by AEMO has been falling significantly over the last decade (about the time that renewables started to enter the system in significant numbers).
“Before last summer, LOR3 notices (the most critical that most likely lead to load shedding) were last issued to the market in the “superpeak” summer of 2008-09,” it noted.
It also underlined how slow Australia has been in adopting demand response, listing a range of countries in Europe, north America and Asia where demand response was used significantly to address surges in peak demand, improve reliability and lower costs.
“By reducing load during a limited number of hours each year, its benefits can include deferring the need for new peaking generation capacity, reducing peak period energy costs, and lessening the need for transmission and distribution infrastructure,” it said.
Also of note were agreements obtained from the NSW Environmental Protection Authority to provide exemptions for generators on hot days, meaning that coal plants would not have to reduce capacity in order to observe temperature limits in nearby lakes that serve as cooling ponds.