The Australian Energy Market Operator has taken effective control over the operation of the three big batteries in South Australia as part of a suite of measures introduced to help manage the state grid while it is effectively isolated from the rest of the National Electricity Market.
Storms or tornadoes tore down six major transmission towers last Friday afternoon, cutting off the Heywood interconnector – the main electricity superway between Victoria and South Australia. Unlike the dramatic events of September 2016, when 23 towers and three major transmission lines were blown down, there was no system black, or any widespread outage.
But managing the system for the estimated two weeks it will take to build even a temporary replacement will present challenges, and will be a focus of some scrutiny from Australian and international observers because of South Australia’s high share of renewable energy, which has been running at an average of around 55 per cent for much of the past year.
South Australia retains a link with Victoria through the MurrayLink connector, but this allows only a small amount of electricity to be exchanged between the two states, and does not provide “system strength” or inertia, meaning all of that must be provided within South Australia.
That’s the main reason why AEMO announced in a briefing to industry players on Monday afternoon that it will take effective operational control of the three big batteries in the state, the 100MW/129MWh Hornsdale Power Reserve, the 25MW/52MWh Lake Bonney battery, and the 30MW/8MWh Dalrymple battery.
It said it would be “directing South Australia’s grid-scale batteries to operate in a mode that will stabilise the “islanded” power system.” The batteries are particularly valuable to the grid operator because of their speed and versality, not to mention accuracy, and the main fear for AEMO is a sudden trip of one of the bigger gas generation units.
Two big wind farms in South Australia have already been curtailed because of the changed operating nature of the grid – the 275MW Lake Bonney wind complex and the nearby 48MW Canunda wind farm, both near the Victoria border. Two others in Victoria – Macarthur and Portland – have also been curtailed.
AEMO warned that other wind and solar farms in South Australia and in south-west Victoria could have their output limited on occasions. This is mostly likely to occur when there is relatively low demand and strong output from the state’s considerable resources of rooftop solar PV, which can provide around half of the state’s demand in the middle of the day (see graph below). But it could also occur when there is excess wind output.
Since the main link to Victoria was lost on Friday afternoon, South Australia has continued to run on around 50 per cent renewables. But, without the “system strength” from the main interconnector, AEMO is making sure more gas generators are on line at any one time.
That requirement will limit the amount of wind and solar operating at any one time, although with some exports still allowed through MurrayLink, the share of wind and solar has continued to reach around 70 per cent of local demand. AEMO, however, is unlikely to allow it to reach 100 per cent or more, as happens on other occasions, in the current arrangements.
All this is having an interesting impact on the electricity markets, of which there are many including bulk electricity, and various frequency and ancillary control markets, and the generators that operate in them.
The bulk electricity price has remained low, mainly because there has mostly been more wind and solar than needed under the new operating conditions. Prices were negative for most of Sunday and Monday, and have averaged minus $13.62 since midnight Friday, according to AEMO data.
That will cause pain for most gas generators, and wind and solar farms. Some, like the 95MW Tailem Bend solar farm, are required by their off take agreements to switch off when prices go negative. Other wind and solar farms are protected by their fixed contract prices. Some have to take whatever the “merchant” price delivers.
Some gas generators, however, are making up for those losses in the FCAS market (frequency control and ancillary services), which has been stuck at the market cap ($300 a megawatt) for pretty much the whole time since the separation.
The FCAS market was traditionally controlled by a handful of gas generators, who didn’t miss an opportunity to push the price to the maximum level when the state was isolated, or when there were repairs to the network, adding tens of millions to consumer and generator costs.
That cartel-like activity was punctured by the arrival of the Tesla big battery in late 2017, but the battery – operated by Neoen – and the other battery installations have less opportunity to play that market under the new AEMO directions.
However it pans out over coming weeks, it is clear that the state’s position will be improved by the addition of the new 800MW interconnector to NSW, planned by 2024, and the addition of yet more storage – both batteries and pumped hydro. For some, it underlines the wisdom in installing the emergency diesel generators, which are soon to be converted to gas and allowed to operate in the broader market.
In a statement, AEMO said the unique configuration changes to the South Australia grid would minimise security and reliability risk to the state’s power system and will remain in place until repairs are completed to the transmission lines.
“For the week ahead, AEMO’s forecasts indicate sufficient electricity reserves to meet demand in Victoria and South Australia with mild weather expected. However, AEMO will continue to monitor conditions across the NEM.”
AEMO said AusNet Services, owners of the Victorian electricity transmission system, has indicated that it will take approximately two weeks to complete a temporary link around the damaged 500 kilovolt (kV) transmission towers between Moorabool and the Mortlake Power Station damaged on Friday 31 January.
“As a result of the extended transmission outage between South Australia and Victoria, AEMO has reconfigured the available transmission network to enable electricity supply to the Portland Aluminium Smelter from Origin Energy’s Mortlake Power Station.”