Much of the system planning in place by the market operator AEMO, the rule maker AEMC and the Energy Security Board (ESB) are examples of the “muddle through” approach to policy development.
Despite its quirky name ,“muddle through” was actually first introduced into the academic literature by Charles Lindblom in a 1959 Public Administration Review Article, and it has remained as a viable “theory” for the last 70 years.
What this means in practice in the Australian electricity industry is that policies are developed to deal with problems either after the problem has occurred or just before. The focus is nearly always on solving the immediate problem. The end goal is assumed to be unknown or not relevant to solving the problem.
One example might be the South Australian mandated shut down of rooftop solar, and another might be the ill-named “do no harm” rule of the AEMC. See: Do no harm? How Australia’s regulators fumbled the transition to wind and solar
Similarly, one might argue the ESB approach to post 2025 market design is, at best, an evolutionary approach – but basically it’s conservatism, changing the rules as little as possible and muddling through.
An alternative approach is “Gap Analysis”. This starts with a view of what you would like to achieve as a business or a country, looks at your current resources and identifies the gaps and what it takes to eliminate the gaps.
A similar modern approach is to start with the end result you want to achieve and then work backwards step by step to work out what you need to get the end result. In commuting terms, if I want to be at work at 7:30 am I need to catch the train at 7:00, eat breakfast at 6:30 etc.
I’d argue that the NSW Electricity Infrastruture Roadmap is an example of how to develop policy properly.
Start with the end result, announce what you are going to do. Build a strong political consensus, provide lots of information to stakeholders and then let a very supportive public service go to work on something they really want to do.
I could argue that the NSW policy as presented by Chloe Hicks at the Smart Energy Conference was an excellent example of not just design but implementation, at least so far. Let’s not digress.
So using a gap analysis and working backwards approach what is missing in Australia at the NEM level is a formal and majority consensus view of the end goal.
What it would look like and then the steps that need to be taken to get there. It’s fair to say that just like the ISP such a plan would need to be revised often. That’s OK. The goal wouldn’t change, just the way to get there.
Formal analysis of inverter controlled grid is required
There are millions and millions of inverters in Australia from small to big. There is an increasing number of batteries. There are going to be millions more inverters and more will have batteries.
The new inverters will for sure be smarter than the old ones. Software and devices to control inverters and loads and sources attached to them are proliferating.
Equally, everyone from Kerry Schott, Chair of the ESB, through to AEMO, through to the coal station owners is saying more or less publicly that coal generation is going away faster rather than slower. Most will be gone by 2035, including in Queensland.
And yet those same people and the organisations they speak for have no public plan about how to run the grid without spinning reserves. As a result we get a flurry of problems and band aid solutions. Synchronous condensors, minimum demand thresholds, system stability worries, weak and strong voltage issues.
All of these things are happening even before most of the coal generation switches off. The problems were and are foreseeable.
Just like the transmission issues were foreseen. For transmission we have the Integrated System Plan. For running the grid without spinning reserve we don’t have much.
AEMO has finally started an Engineering framework
The current formal State of play is found in the AEMO Engineering Framework. This topic was only introduced in March 2021.
Notwithstanding how busy AEMO is and congratulating AEMO for finally getting on the bus, it’s a shame this work wasn’t started a couple of years ago.
Despite all the inverters, despite the fact that over 100 MW of offgrid projects are being run or will be run by virtual synchronous machines [VSM], despite the Dalrymple North battery project, there is still massive engineer personnel inertia to the concept of running a grid using inverters and synthetic inertia.
There is no industry consensus on whether a grid can be run cost effectively based on inverters and without spinning reserve. There is no consensus because much of engineering industry, or so it seems to me, hasn’t even considered issue, let alone taken a considered view on it.
We need some leadership on this issue, not just outsiders taking potshots. Where is the mainstream research? Why don’t we have detailed studies from the CSIRO, or CEEM, or Monash, or the other universities on how to run the grid without coal generation? Why should AEMO have to do all the work?
Why should it take a non profit like the The Australia Institute to commission a study? That is the very recent and relatively straight forward inertia paper by Bruce Mountain and Stephen Percy.
When you read the Engineering Framework document, you will see that there are many, many, individual projects all or most of which I would argue are examples of “muddling through”.
I’d argue that it would be a useful approach to start with one scenario, 100% renewables with very high levels of DER and see what resources would be required to run the grid. With that central goal in mind other actions could be directed towards achieving the goal.
As far as AEMO’s current understanding of synthetic inertia, the Engineering study web page has this to say.
“AEMO is currently developing an Advanced Inverter White Paper to increase understanding of the application of grid-forming inverters, including the provision of synthetic inertia. This is currently planned for release by July 2021″.
Again ,it’s great to see that this white paper is finally coming. Let’s hope progress is a bit faster than transmission planning.
AEMO 100% renewable study is nearly ten years old, time for V2
The only formal study by AEMO of the end goal, which I take to be 100% renewable, was done by the CSIRO for AEMO in 2012. AEMO was in turn requested to do the study by the Federal Govt of the day.
But, of course many, many things have changed since 2012 and one might assume that there would be broad support for a fresh version of the study. It turns out though that such calls fall on deaf ears.
Tim Forcey, one of the principal authors of the AEMO study, called for an update in 2018 at RenewEconomy but nothing happened. So perhaps there is not much point in wasting more space on asking for what many would see as a useful planning reference.
Such a study could look at the control system, could provide the current view of the resource mix and so on. It would give a clearer view of long term say, how much dispatchable power is required and what durations.
David Leitch is a regular contributor to Renew Economy. He is principal at ITK, specialising in analysis of electricity, gas and decarbonisation drawn from 33 years experience in stockbroking research & analysis for UBS, JPMorgan and predecessor firms.