AEMO uses “blackout” threat to push for markets that encourage storage

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Market operator uses “blackout” threat to push for new markets to encourage battery storage and other technologies. But the risk of blackouts? An extra 10 minutes a year in worst case scenario.

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The Australian Energy Market Operator is pushing for new markets to be created to encourage new technologies such as battery storage to help ensure system stability as more coal and gas fired generators leave the market.

In its annual Electricity Statement of Opportunities (ESOO) report, AEMO has canvassed various scenarios including a response to the Paris climate conference, which calls for major action on climate change and which is likely to see the accelerated withdrawal of coal fired generators in particular.

It warns that the failure to develop new markets that would encourage “ancillary services” could result in more blackouts – a theme enthusiastically picked up by the trigger-happy Murdoch media and others as they seek to question the accelerated deployment of renewable energy.

But AEMO’s warnings should be put in context. The AEMO is predicting, in the very worst-case scenario modelled in this report, that the risk of blackouts will increase by an extra 11 minutes a year for consumers in South Australia.

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These are hardly catastrophic predictions, and hardly the economy-wrecking loss of power depicted in the media and the fossil fuel industry. At the moment, the standard it is required to meet in Australia is to to restrict blackouts to no more than 11 minutes per customer per year in any particular region.

No other country in the world has such high standards for reliability, and Australian consumers pay a hefty price for this in their consumer bills, particularly through the network costs.

In its worst case scenarios canvassed in this latest report – that with strong economic growth and the closure of an extra 1,380MW of coal power, over and above the 2,200MW to be closed at Liddell,  the risk of blackout in South Australia in the next five years is increased from 11 minutes to 22 minutes per year, while in NSW it jumps to 35 minutes per year within the next decade.

In the low economic growths scenario, it envisages no increased reliability issues. In the neutral economic growth scenario, it says the risk of blackout may increase by an extra minute (yes, one whole minute) a year.

So AEMO’s warning of blackouts – as it describes in its detailed report – appears to have been deliberately provocative.

It justifies this because it wants to convince policy makers to act quickly – because as most recognise, the replacement of fossil fuel generation with renewables will be unstoppable, and could come quicker than expected. Coal withdrawals are likely to be more significant than those canvassed in this analysis.

And AEMO’s predictions apply not just to regions with high renewable energy penetration like South Australia, but also to Victoria and New South Wales, which have a much smaller share of renewable energy and are based largely around large brown and black coal generators.

The point of AEMO’s report is that the amount of generation is no longer the main issue facing the grid, because it clearly has more than enough … it is the quality of that generation, and ensuring that there is enough on the grid to maintain the stability of the network.

These services, it says, can be obtained through battery storage, demand response and generators. They can even be sourced from renewable energy plants, but that hasn’t been the case in Australia because there is no market to encourage it.


And in any case, Australia’s coal generation fleet is ageing, and much of it will need to be replaced over the next decade or two. AEMO is seeking to ensure that the technology is ready to replace it.

“As the NEM generation mix continues to keep pace with new technology and policy changes, future supply adequacy will depend on the availability and capability of new supply options providing electricity services when needed,”  AEMO Chief Operating Officer Mike Cleary said in an accompany statement.

“AEMO is signalling potential future supply gaps in providing these important stability services, gaps which could be met through prospective new forms of electricity generation, or alternative technologies.”

“Possible solutions could include an increased interconnection across NEM regions, battery storage, and demand side management services.

AEMO says it has modelled the impact of withdrawing a further 1,360MW of coal-fired generation capacity to meet the COP21 commitment under AEMO’s neutral scenario, with results suggesting potential reliability breaches occurring in South Australia from 2019-20, and New South Wales and Victoria from 2025 onwards.

“These breaches would most likely occur when demand is high (usually between 3-8pm), coinciding with low wind and rooftop photovoltaic (PV) generation, and low levels of electricity supply imported from neighbouring regions.”



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  1. Cooma Doug 3 years ago

    The thing about system stability and storage options on the load side, is that it will be much cheaper then the status quo.

    The key to making it happen is to allign the market to the technology.

    This is a very good visionary article thanks

  2. Analitik 3 years ago

    I’m sorry but you have misinterpreted the data presented by the AEMO. The shortfall percentages give the period of time when the state grid is projected to be short of generation capacity over a year. This does not mean that the power will be out only for that period.

    Once a grid has a generation shortfall, demand shedding must take place at the edges of the grid to prevent total blackout. Bringing up the blacked out section can take hours as evidenced by the November 2015 incident, due to the need to isolate the blacked out section into subsections that can be brought back online without tripping the powered grid due to the inrush of power required for the reconnection. The larger the blacked out section, the more time is needed to isolate the subsections before power can begin to be restored.

    In the worst case of a state being blacked out, it could take a week – particularly if there is a shortage of large synchronous generators as these allow for larger sections to be reconnected due to the greater stability they provide – South Australia gets many mentions in the ESOO report for this reason. They discuss the stability in terms of avoiding islanding and blackout but on page 36 of the full report, the restart issue is discussed.

    The other big problem is that the type 3 and 4 wind turbines that have been installed in Australia do not provide synchronous inertia to the grids as they do not have the circuitry needed for this (Enercon calls their version “inertial emulation”). This reduces the ability of a grid to drive current through a shorted circuit which means in the event of a fault, generators are more likely to trip rather than circuit breakers leading to larger portions of the grid being blacked out. Again, this leads to longer reconnection times as there is more time needed to find the cause of the fault, along with the sectioning required, before reconnections can take place.

    The good thing is that the Victorian and NSW shortfall percentages are projected for 2 GW of reduction in NSW coal generation and 800 MW of reduction in Victorian coal generation capacities beyond 2025 without similar replacement.

    The bad thing is that the projections for South Australia are for the current state of their grid. There is 210 MW of solar thermal stated as being proposed in 2 projects for Port Augusta which could help.

  3. jeffthewalker 3 years ago

    The installation of battery storage to provide peak shaving and some regulation would willingly be subsidised by solar householders. Yep, houses with solar would pay half of the installation cost of battery storage on their premises to assist the grid provider(s) in achieving reliability/stability. 1,000 households each with 10kWh would be 10mWh of stability. AGL is even looking at such an install at their own (I think) expense.

  4. Daniel 3 years ago

    Blackouts are not the only power outages. Here we have a “Planned Power Outage Notification” tomorrow from 9am – 3pm and another the following week from 9am – 3pm. I can see a number of green poles lying on the council strip so imagine this has something to do with the outages. Summarising the warning letters they simply say:
    * switch off appliances ahead of the outage,
    * if relying upon electronic water pumping store enough for needs,
    * switch things off which could restart when not home like hotplates, ovens, and avoid opening fridge and freezers,
    * solar inverters should automatically turn off (that’s grid-connect systems),
    * Essential Energy may provide information by SMS,
    * to enable Essential Energy to give updates contact electricity retailer to ensure contact details are correct.

    We previously installed about $2k of lead acid batteries and solar system capable of standing alone during such daytime outages, so we will be unaffected. I guess the warning does allow people to fill sinks with water and reduce meat in fridges etc.

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