Coal power hits new low, but more units will need to shut down to remove cap on wind and solar

The Australian Energy Market Operator has confirmed the spate of new renewable penetration records on Australia’s main grid in recent days, but says coal generation will need to be further reduced to allow more renewables into the grid at any one time.

AEMO on Tuesday confirmed that the National Electricity Market set a new record for renewable generation at midday on Monday, reaching 77.19 per cent, beating the previous milestone of 75.79 per cent set last Friday, also in the middle of the day.

These numbers differ slightly from the 78.7 per cent penetration and 76.8 per cent penetration levels reported by Renew Economy and various data providers, but that’s because they focus on 5-minute trading intervals while AEMO chooses 30 minute intervals.

The latest peak in renewable penetration coincided with a new low grid share for coal, down to just 21.9 per cent at 11.55am on Monday from the previous low of 22.9 per cent that had stood since last November, according to GPE NEMLog. The combined share share for coal and gas also hit a new low of 22.5 per cent, down from 23.8 per cent.

AEMO says the new records reflect the continued growth of renewable energy across the system. “These records highlight the scale and pace of change underway as Australia moves towards a net zero energy system,” it said.

But it also warned that as renewable penetration reaches higher levels, each new milestone is becoming more challenging to achieve.

“Further progress will increasingly rely on reducing thermal generation during the middle of the day to unlock more room for renewables,” it noted on its LinkedIn post.

That point is interesting. To reduce coal generation requires coal units to flex, shut down temporarily, or to close.

At the time of Monday’s renewables record, three units at Australia’s biggest coal generator, Eraring, flexed down as much as they good – reducing their output to just 180 MW each at midday, compared to their rated capacity of 720 MW. Another unit at Eraring is out of action for repairs.

At Mt Piper, also in NSW, the story was the same with both its units ramping down to 150 MW from their rated capacity of 700 MW, and their output of 450 MW each earlier that morning. At Bayswater, the story was the same with two units going down to 170 MW.

The coal generators are just as keen as wind and solar to dodge negative prices. But if they cannot flex any further, they need to bid low to ensure that the capacity that must run actually gets dispatched by the market operator.

The flex is needed because rooftop solar, in particular, has eaten into the coal industry’s midday lunch, soaking up much of the demand that would otherwise be met by coal, or even large scale wind and solar – many of which are also obliged to close down if prices go negative.

Other coal units are not so flexible, because their owners have not invested in the technology that allows that to occur.

AGL and EnergyAustralia, the owners of Bayswater and Mt Piper respectively, have signalled they could adopt “two-shifting” – closing down a unit for one shift or a weekend, for instance, or even mothball on a seasonal basis – but there is no firm sign of that happening anytime soon.

On AEMO’s NEM data dashboard page, (see above) the market operator says it is still aiming to enable 100 per cent renewable energy “at any point in time.”

“Our goal is to co-design and co-engineer the NEM and the WEM to manage 100% instantaneous penetration of renewables at any moment on any day by 2025,” it says.

That is unlikely to occur this year. Even though there have been occasions when the “potential” production of renewable energy could have reached, or even exceeded, 100 per cent of overall demand, that has not actually occurred because of the self-selecting nature of negative prices.

At the time of the record on Monday, more than 3.5 gigawatts of large scale wind and solar, for instance, was curtailed, according to Open Electricity – and most of that was likely for economic reasons.

More battery storage would help, but there are other hurdles to overcome, and they are very much in the hands of AEMO and the major transmission companies.

This relates not so much to the quantities of renewables, but the market operator’s confidence that the system services tradionally provided by synchronous generators can also be maintained.

Battery grid forming inverters have been able to deliver synthetic inertia, and have even been contracted by AEMO in some instances to deliver “system strength”.

But the transmission companies who are responsible for maintaining system strength are still opting for synchronous condensers, spinning machines that do not burn fuel, because they’re not yet convinced that grid forming inverters can do the job in all situations. And they are in a hurry to get them.

The battery storage technology providers, such as Tesla, have begged to differ, arguing that they are both capable and lower cost.

See: Tesla says battery inverters can do the job of spinning machines at a fraction of the cost

AEMO is still working through this and other issues in its engineering roadmap that it says needs to be completed before 100 per cent renewables, even for an instant, is actually allowed to become a thing.

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