All hands to the pump as CleanCo targets solar duck curve

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Queensland’s CleanCo starts trading on Thursday, with all eyes on the Wivenhoe pumped storage facility and how it will be used to flatten the solar duck curve.

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Wivenhoe power station. Source: Queensland Mining & Energy Bulletin
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The new Queensland-government owned clean energy generator CleanCo will begin operations on Thursday, with its first two targets being trying to flatten out the state’s solar duck curve, and lower the pricing peaks at times of high demand.

CleanCo will take possession on Thursday, at least in a trading sense, of the huge Wivenhoe pumped hydro storage plant, along with the Swanbank E gas generator and three smaller hydro plants located in the north of the state.

Company chair Jacqui Walters, in an interview on RenewEconomy’s Energy Insiders podcast, confirmed that CleanCo’s entry into the market will mark a change of use in the assets, particularly the 570MW Wivenhoe facility which has been rarely used by its previous state government owners.

“Those assets have been owned in other government-owned generators … and have been a minor part of their portfolio,” Walters says.

“But they are a major part of our portfolio, so we will be using them in different way. We will be adding supply to the market when prices are at their peak, and we will have influence over prices and potentially the behaviour of some of the other players.”

That means, Walters confirmed, that the Wivenhoe facility will be pumping during the day when the state’s near 5,000MW of large and rooftop solar capacity pushes down prices, sometimes to negative territory.

“Yes, exactly. It is like a great big battery, it allows us to firm intermittent sources of energy, flatten the duck curve if you like and put downward pressure on peak prices.”

The duck curve has been a prominent feature of the Queensland grid in recent months, particularly with mild weather keeping demand low and sunny skies meaning solar output is high.

But despite many instances of negative prices, sometimes at the market floor, Wivenhoe has been rarely used by its current owners, and on some occasions solar farms have been forced, or chosen, to switch off en masse when prices stayed low over several hours.

Queensland’s solar duck curve on Tuesday. Source: Climate and Energy College.

On that count alone, CleanCo will be a welcome addition to the market on Thursday, and its trading activities will be watched with keen interest – not just by the renewable energy plant owners, and aspiring project developers, but also its government-owned rivals at CS Energy and Stanwell, who operate the state’s coal and gas fleet.

“Thursday is our first day of trading, where we take ownership of our foundation assets,” Walters said. It’s a really exciting day for CleanCo …. there has been an enormous amount of work from the team to get ready for this occasion.”

So, would the team succeed in eliminating negative prices?

“There are people in our team who have strong views on some of that – the market is so difficult to predict in some ways, I’m reluctant to say we would (eliminate negative prices), but it’s certainly front of mind.

“it would be disappointing if the only thing we do is to operate theses assets differently. But we are trying to walk before we run.”

The CleanCo team now numbers 85, and is led operationally by CEO Maia Schweizer, formerly of Origin Energy, and head of trading Tanya Mills, formerly of Stanwell. Two thirds of the senior management positions are held by women. The same is true of the board.

Walters said the company had been inundated with job applicants, many keen to shift to a company focused on renewables and clean energy, rather than the fossil fuel generators where they now work.

“People who have long experience in the energy industry, and in energy markets, are really attracted to purpose of CleanCo,” Walters said.

And what is that purpose? Basically to build a portfolio of renewable energy assets, lower emissions, reduce prices, help in the transition to the 50 per cent renewable energy target, and also provide system strength services.

“We want to make sure it is a very constructive transition to a low-carbon economy,” Walters said. “We will play a role in grid strength and industry support…. once we get through day one trading, we will start to turn mind to the types of activities that can support that broader mandate.”

On its list is the progression of the RE400 tender, for 400MW of renewables and storage that has progressed little since it was first announced two years ago. The state government recently announced a shortlist of 10 potential projects, and Walters said the company was going back to those developers to get an update on project specifications and prices, and would make an announcement on the winners in early 2020.

CleanCo will offer power purchase agreements for the projects, although this will need to be balanced by demand, and the company is looking to build a large base of commercial and industrial users.

CleanCo has recourse to $250 million to help fund these developments, and over the longer term has a target of 1GW of new renewables that it will either contract or own by 2025.

As for the first day of trading, Walters was asked if the trading team would be conservative and block the first few deliveries served up by the market, or to borrow another cricketing term, try to hit the ball out of the park.

“Maybe in between the two,” Walters says. “Maybe we will get a few doubles  …. as long we don’t score a duck on the first day I’ll be happy.”

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