Australia’s main grid copes just fine with minimal amount of coal

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More than 11 large coal units were offline at various times last week, and the grid coped just fine. But we still deserve better planning for a renewable future.

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Everyone in a complex system has a slightly different interpretation.

The more interpretations we gather, the easier it becomes to gain a sense of the whole.

(Margaret J. Wheatley)

NEM copes well with multiple coal units off line

Last week, three out of four units of Loy Yang A, all of Kogan Creek, one and sometimes 2 units of Mt Piper, one unit at Yallourn, a unit at Eraring, a unit at Bayswater and a unit at Vales Point were off line or at least not being dispatched.

Over the last 30 days coal generation in the National Electricity Market in aggregate is down 8%, or an annualised figure of 11TWh (terrawatt hours) compared to the same period a year earlier (PCP).  As Giles Parkinson reports, brown coal generation hit a record low on Saturday. Partly compensating for units off line in NSW is Liddell, which generally has had all four units running.

Also, Tasmania remains disconnected from the NEM – thanks to another ongoing problem with Basslink – and across the NEM hydro output is down by about 25% from this time last year, or an annualised 7TWh.

Even though this is the seasonally softest time of the year, demand is still down about 0.5% (that includes behind the meter demand/supply) on PCP.

Despite the significant fall in coal and hydro output, the system seems to be coping relatively well. Indeed, prices in the middle of the day remain very low and then jump up in the evening peak.

Figures 1, 2 and 3 show the overall picture and the decline in coal. Readers looking for some more charts can find them here  ITK Know your NEM charts.

Figure 1: Generation by fuel last 30 days annualised. Source: NEM Review

Coal generation market share
Figure 2: Coal generation market share. Source: NEM Review

Annualised output of wind & solar combined
Figure 3: Annualised output of wind & solar combined. Source: NEM Review

Kogan Creek will start up in about 8-9 days and Cooper’s Gap is starting to flow

Kogan Creek’s 750MW single unit is the most modern coal generator in the NEM. If Kogan Creek, located West of Brisbane, starts up in late September it will likely be into a market where demand is still falling, on a seasonal basis and flat in Queensland.

Nevertheless, solar output will also continue to pick up and the Cooper’s Gap wind farm which started to generate some output in early August, hit 85MW last week and will continue to ramp up towards periods of over 400MW. (Its nameplate capacity will be 453MW).

So, between Kogan Creek and Cooper’s Gap there is over 1GW of power coming online in QLD into a market which is already hitting zero or close to it in the middle of the day.

That power may well be needed in January and February, but only for a month or so. To us it looks like if the weather continues sunny there could be a lot of low price events in Queensland in October or some other generator will have to go off line.

Seasonality of QLD demand MW
Figure 4: Seasonality of QLD demand MW. Source: NEM Review

Not enough power can get out of Qld

Only about 1100MW can get out of QLD at the best of times and exports are, in our view, more or less already running at the limit.

So, during October, demand will probably not increase by more than 200MW so something else will have to give way. If Kogan Creek operates during the evening peak replacing gas then average Qld prices could fall. Equally some other coal unit may go off line for maintenance.

Over the past 30 days average prices are depressed by the two days of extreme negative prices when the transmission was off line for maintenance.

Even so even Blind Freddy and his assistant Phil Wright can see that prices go down when solar is strong and go up when gas is strong in the evening peak. Average price was $49/MWh over the period.

erage daily generation and price last 30 days.
Figure 5: Average daily generation and price last 30 days. Source: NEM Review

The invisible hand has been…. invisible

The further we go the more obvious the failure of planning. If we take the extreme view of John Pierce and the AEMC planning isn’t necessary because the “invisible hand” of the market will ensure a good outcome.

Clearly, it’s not just the AEMC but AEMO and Coag that have taken this on board. How else to explain legislating in the 2012-2015 period for over 20% variable renewable energy but doing nothing to provide the required transmission?

Apparently, the invisible hand of the market must be a bit like God, it works as a cardiologist might say “in mysterious ways”. In this case the invisible hand has been so mysterious it doesn’t seem to have worked at all.

Circumstances prevented me from attending Transgrid’s annual planning day last week, but the mail was that things are still moving at a snail’s pace. Recently, Andrew Kingsmill from Transgrid did a fantastic job outlining the various projects and processes in NSW in an Energy Insiders podcast.  For those that haven’t time to listen my summary of  Andrew’s information on where things are is:

Energy Connect (NSW-SA). Electranet ha done 3 years work already. AER decision by end of this calendar. Energised by 2022. Will be built in stages SA to NSW early 2022 within NSW early 2023.

NSW Vic/ NSW QLD ISP stage 1 there is letter of comfort  from AER that helps.  Tests by Transgrid complete by 2020. AER guidance note suggests AER consideration will be complete by end of March quarter 2020 (probably early June qtr).

This is for ISP stage 1 projects (minor). BTW the battery looks like being economic as part of the QLD stage 1 upgrade. The battery adds stability as much as capacity. Apparently the Qld interconnector is constrained at present because of stability as much as capacity.

Bigger NSW QLD line (500 KV) requires a new RIT process starting in 2020.

NSW/Vic Stage 1 2022 time frame. Again just a minor upgrade.

Not far behind that a bigger augmentation “Humelink”  Snowy- Albury- Sydney. That’s the mixed 500/330 KV Snowy to Sydney link essentially. According to Andrew the Victoria side has  a late 2020s date. That will make Snowy happy, not.

REZ is a geographic area may include firming resource maybe along interconnector. Advantage of declaring a zone:

Investment signal to wind/solar

More economic to develop transmission at larger scale. Over a $1 bn of savings

Double bottom line. Not much change before 2022 to anything.

And, it’s likely to be another 5 years before more significant upgrades are achieved.

When people talk about the failure of electricity policy in Australia they are mostly talking about generation.  The system planners can be forgiven in regards to carbon policy. There is no reasonable excuse for not having got the transmission side of things organised sooner.

It’s just incompetence on a national scale. Australia in this regard will certainly serve as an example to the world of how not to do it.

See also: Graph of the Day: Brown coal generation hits record low in Australia

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