Australian Energy Market Operator CEO Audrey Zibelman has conceded there is a “hiccup” in the connection of new solar and wind projects to the grid, caused by the overwhelming volume of construction, and as the speed of new projects overtakes the ability of the grid to adapt.
Grid connections – and delays and added costs – have emerged as the overwhelming concern for the renewable energy industry, even more so than the fate of the National Energy Guarantee,.
The issue was highlighted in RenewEconomy’s story on Monday, Major wind and solar projects stumble in front of new grid hurdles, which highlighted significant delays and pricing pressures to many new projects, just the latest in a series of new hurdles to be put in front of developers.
At the Clean Energy Summit in Sydney on Tuesday, an informal poll in a session hosted by chief executive Kane Thornton identified connection issues as the chief concern for more than 80 per cent of those present.
“I definitely think we are in a hiccup phase right now because of the volume and need to work through the processes,” Zibelman said.
She pointed to the sheer scale of connection requests – where once it might be dealing with 20 such requests, it is now dealing with around 300, and many were looking to build in weak parts of the grid.
As RenewEconomy reported on Monday, many projects that had hoped, and had been expected to proceed, are now re-assessing their options because they have been told they need new machinery – such as battery storage or synchronous condensers, or wait for grid upgrades.
Those upgrades could take years, however. Zibelman said the system was now dealing with a new phenomena, where solar projects could go from conception to construction in less than a year, but grid augmentations still take 5 to 7 years.
She also pointed to one of the issues we highlighted in our story on Monday, the skill-set of some of the project developers.
“We have developers who are very sophisticated. And we have developers who when asked for GPS co-ordinates (of their project) they send us a map. They don’t really know what’s going on.”
Still, some in the industry accuse AEMO of over-reach and it and network owners of being too prescriptive in its assessments, of imposing costs to solve system issues that had existed for years, and for making “mistakes” and “retrospective” decisions. i.e. they had been told there were no problems, and then advised there were.
Zibelman says AEMO is looking forward to working with network owners, regulators and project developers on refining the standards for new connections, and for seeking new solutions.
In the meantime, she said that the newly released Integrated System Plan, which identifies weak areas of the grid and what needs to be done, would be critical to accommodate new development.
She also said the National Energy Guarantee was similarly important, regardless of what the renewable energy industry thought about its emissions targets, which she described as a political issue.
“Once you hit 25-30 of variable renewables, then as a system operator your world changes,” Zibelman said.
That requires a market design that allows and encourages more flexibility, and the ability to ramp.
“We have to start making these changes if we are going to accommodate the type of changes that are going on,” Zibelman said,.
“On the one hand we have policy paralysis and people not making decisions, and on the other hand people criticising us because we are moving too fast.
“We have to move fast, because the technology moving fast.”
So fast, said Steven Davy, the CEO of Hydro Tasmania, which is proposing a “battery of the nation” projectthat will exploit the island states pumped hydro and wind energy resources, that the transition to renewables could happen very fast, and before 2040.
“That’s a completely different market paradigm to what we got now.”
AEMO’s ISP envisages the system having 46 per cent renewables by 2030, and between 70 and 80 per cent by 2040.
That assessment has already drawn the predictable rebukes from conservatives in the Coalition government, who accuse Zibleman of being anti-coal, and of having a “pro-renewables” agenda.
Zibelman said it came down to basic economics, and wind and solar were by far the cheapest source of bulk energy, and as the ISP pointed out, once coal generators would retire, the combination of wind and solar and storage would be the cheapest option
“We are seeing this transformation occur faster in Australia than anywhere else,” she said.
And, she noted, the pace of uptake and falling costs of rooftop solar and battery storage presented huge options for the grid, and for consumers.
“This is an industry where for the first time consumers have a real alternative. If they don’t see value they will vote with their feet.”
And by voting with their feet, that means leaving the grid.
Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.