AEMO ready for summer heat after finding 2GW of new capacity

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AEMO says it “ready for summer”. While it expects no major outages, the biggest risk remains catastrophic failure of network or fossil fuel assets, and highlights importance of demand response, storage, solar PV, and new market rules.

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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.

aemo resources

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.

aemo solar PV forecastsOne 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.

aemo LOR history

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.

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21 Comments
  1. nakedChimp 2 years ago

    12th paragraph:
    “Fossil fuel advocates have made it clear they will seek to blame renewables whatever the reason for lights going on.”
    ‘on’ should be ‘out’

  2. Jo 2 years ago

    Do we really want this to happen?
    “… 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.”
    The temperature limits are there for a reason.

    • Tony Yen 2 years ago

      Of course not. In the article it sounds like it is the EPA’s fault that the plants cannot run at full capacity. But rising temperature reduce the efficiency in the cooling system, so this kind of action is rising the risk for operating the plants.

  3. trackdaze 2 years ago

    Lets hope this is enough to cover intermittent coal power.

    • Martin Stawo 2 years ago

      Loved it, just like a white rabbit out of magicians hat, here comes 2GW of generation.
      800MW of demand response, commonly known as load shedding.
      240MW of reopened gas generation in SA aka Pelican Point, which in fact been operating full noise last 6mths.
      170MW of diesel gensets in SA, clean, cheap and efficient, probably from Tassie after Basslink blow up.
      In the meantime there is no improvement to transmission networks so it will be very little change to the reliability of supply.

      • Giles 2 years ago

        May be you should read the report.

        • Martin Stawo 2 years ago

          Are u able to post the link?

          • Martin Stawo 2 years ago

            Wow, read the report. Masterpiece of propaganda and fiction.

            Solution to summer is to load shedding of 833MW of customers to offset lack of energy generation and transmission capacity development. Justification for that: this is ok elsewhere, so its ok in Australia.

            Extra capacity from Pelican Point which returned to service post Sep 2016 blackout and has operated since. So PP was there during the load shedding event in feb 2017 anyway, how this is the extra capacity?

            Tamar in Tas, lets pray that the overtemp trip at Basslink has been lifted up to 45c for the summer. Anyway that capacity is limited by basslink transfer, when its operational.

            Swanbank PS in brisbane, how we are going to push this extra load through 3 interconnectors to SA on a 45deg day? Another AEMO miracle perhaps.

            AEMO direction to cancel maintenance outages, so that the existing assets can be less relaiable, and we can brag on how good are the renewable sources (when the wind blows and sun is shining).

            170MW of extra diesel generation to help meeting our ermission targets, and to prop the renewable sources when unavailable.

            I cannot beleive that we accept and praise this heresy!

          • Giles 2 years ago

            PP 2nd unit was not there in load shedding event in february. that was the whole point.
            And explain to me why it smarter to build extra poles and wires and extra generation, rather than pay people to not use energy they don’t actually need at a point of time (demand management). Oh wait, it means more profits for networks and generators, and bigger bills for consumers.

          • Mike Westerman 2 years ago

            Giles some people haven’t realised that congestion pricing is a legit way of improving efficiency. I find that as confusing as people that hide behind pseudonyms to avoid being accountable for their comments: both shout “I wanna do what I want when I want” with no accountability to anyone.

  4. Adam Smith 2 years ago

    Load curtailment, paying gas generators, burning diesel, all to keep the lights on over summer, sorry but it is easy to blame the renewables, why else are we in this predicament?

    • Mike Westerman 2 years ago

      Becoz the plant we relied on has passed its economic life and the regulators/policy makers have been asleep – pretty obvious really!

  5. Joe 2 years ago

    I’m not hearing any insults or criticisms from Two Tonguer Turnbull or his hand puppet Joshie about those 3 ‘intermittent and unreliable’ baseload Coalers packing it in. Now, if it was RE with a problem you’d see Turnbull’s face in front of every TV camera giving RE a gobful with Joshie chiming in with afters for good measure.

  6. John Saint-Smith 2 years ago

    Maybe I’m just imagining it, but I don’t seem to recall that 99.998% reliability standard was ever achieved in the good old days of 100% coal-fired power. Even attempting to approach those standards required massive excess grid capacity, stand-by diesel generators, spinning reserves and other fall-backs. And still we were ‘blind-sided’ by multiple coinciding drop-out incidents like those in last year’s South Australian black-outs.

    The grids that almost collapsed during the heatwaves earlier this year had only modest exposure to renewables which proved to be quite reliable – it was gas and coal that fell over.

    Are we setting the bar impossibly high for fossil generators in an attempt to trip up ‘intermittent renewable power’?

  7. JIm 2 years ago

    Too often we forget that the lack of urgency in addressing peak demand cost-effectively can be sheeted home to both major parties. Australian homes aren’t climate smart due to both major parties. Great that AEMO has compared performance with other nations.

  8. Ali 2 years ago

    AEMO needs to release the contingency analysis’ results as needed to detect network weaknesses !

    • Martin Stawo 2 years ago

      And as we are debating who to blame, there is another transformer failure this morning at Dry Creek substation in Adelaide.

  9. George Marsh 2 years ago

    When in future will AEMO reach the happy point where – should a generator withhold supply for spurious reasons – they can simply stop accepting further generation from such “gamers” and cut them loose?

    • Martin Stawo 2 years ago

      That would be mainly AGL and good old Snowy.

  10. MaxG 2 years ago

    I am certain a coal burner will fail this summer, just to demonstrate their importance in the market, and furthering their political scare campaign.

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