Eight big questions arising from AEMO report into SA blackout

The latest report from the Australian Energy Market Operator again allows wind energy to be blamed as one of the prime causes of the state-wide blackout in South Australia, even if it did blow away some of the classic myths about wind energy.

But the report raises major questions about the actions of the market operator and the energy market’s rule maker, and the future direction of Australia’s energy transition – because old world thinking is still dominating politics, media and energy management.

Here are eight key questions that arise from the AEMO report:

Why is Josh Frydenberg still banging on about “intermittent generation”

The AEMO report made it clear that neither the “intermittency” of wind generation, nor its ability to operate in high speeds, were an issue in the September 28 blackout. And if wind energy was at fault it was because of the settings of “fault ride-through” mechanisms, which can be, and have been, easily fixed. But that did not stop energy minister Josh Frydenberg in his tracks. In an interview with the ABC’s Chris Uhlmann, Frydenberg insisted that intermittent generation was the real culprit, saying that South Australia’s mix of  40 per cent intermittent generation (wind and solar) “had clearly failed”, and he used this as a call to rein in the “unrealistic” state-based targets, particularly those of Queensland and Victoria.

Frydenberg was kept on his toes by Uhlmann’s forensic questioning: “Isn’t it an inconvenient truth,” Uhlmann suggested, “that we can get to renewable energy (even the federal government’s 23 per cent target) … but it is going to be more expensive?” No point bothering with Frydenberg’s answer. But, no, it doesn’t have to be more expensive at all, and the Queensland expert panel – and any number of other government inquiries into RETs – made that clear in their report on the state’s proposed 50 per cent target.

But electricity prices will almost certainly be more expensive if the federal energy minister continues to apply 20th century thinking to 21st century challenges, and responds with the most expensive options: more gas and more poles and wires. It certainly won’t be any incentive for the principal agencies – the regulator (AER), the policy maker (AEMC) and the operator (AEMO)– to think differently about the energy future if their leader is stuck in last century thinking.

Was it really the fall in output from wind farms that triggered the failure of the interconnector?

The AEMO investigation into its own actions has found itself not guilty (more on that below), but left just enough evidence for the anti-wind brigade to find wind energy guilty and sentence it to a thousand disapproving columns. All Andrew Bolt had to do for his column today was to cut and paste from the AEMO report and slap on a headline declaring: “Wind power caused the SA blackout.”

Indeed, AEMO’s second report claims the trigger point of the separation of South Australia from the Heywood interconnector was the loss of 445MW of generation after “self protection” devices in nine out of 13 wind farms turned the facilities off, or down, after six faults in 80 seconds (caused by the collapse of three main transmission lines).

The wind industry and energy experts are surprised (and more than just a little angry and frustrated) by such conclusions, particularly considering AEMO’s own reports and graphs that show a massive loss of voltage that may have preceded the loss of generation and the disconnection.

They point to the huge loss in voltage just before the Heywood interconnector “opened”. As one wind farm engineer asked: “Why is the market operator intent on discounting the physics of what has happened in the network while focussing on the performance of the wind turbines (in this extreme event).” This view is reinforced by AEMO’s own observations:

“The rapid decline in voltage across the SA network was observed immediately prior to the opening of the Heywood Interconnector. This rapid voltage decline was consistent across the SA transmission network from the South East to the North. Once separated from the rest of the NEM, network voltage within SA momentarily returned to normal levels before the rapid frequency fall led to the Black System.

Why didn’t AEMO already know about the wind farms’ self-protecting settings?

AEMO says it was unaware of the settings of the self-protecting “fault ride-through” mechanisms. That seems an extraordinary admission from a market operator who presumably would have a close look at this important mechanism when making its assessment of proposed wind farm connections.

It’s even more surprising because a report conducted for AEMO’s predecessor, NEMCO, looked into this very issue when it was asked, in 2005, to imagine a very similar scenario to that which played out on “Black Wednesday”. The report, by German-based consultants DIgSILENT, and titled “Assessment of Potential Security Risks due to High Levels of Wind Generation in South Australia” looked at what would happen if there was 800MW of wind generation in South Australia and one of the main transmission lines fell over. (Sound familiar?)

It placed particular importance on the very fault ride-through mechanisms that have suddenly become the focus of attention now. It also said that the market operator should expect major variations in output as the wind farms rode through various faults.

This particular paragraph is of interest: “As part of assessing proposed wind farm connections, studies are conducted to verify fault ride-through capability. If necessary appropriate measures are taken to ensure the wind farm satisfies this requirement. These measures may include installation of additional reactive support at the connection point or restricting the output of the wind farm. It is therefore expected that necessary measures will be taken if the problem identified in these studies was identified during the connection studies for this wind farm.”

The result was that onerous conditions were put on ride-through mechanisms on Australian wind farms, with which the wind generators say they complied. But the rules never envisaged multiple line failures, and nor did they address the issue of voltage collapse, which is what occurred in South Australia. The view of AEMO was that the generators were simply required to “ride through” even if it means that they sustained damage. That is an interesting and highly contentious interpretation.

Were the wind farms even supposed to ride through the transmission line failures?

It’s all very neat for AEMO to allow the blame to fall on wind farms, but the problems may actually be in the rules. It also turns out that the National Energy Rules do not require transmission-connected generation to stay connected for a 3-phase fault (such as three transmission lines falling). This is different to other international standards possibly because three-phase faults are rare in Australia, and historically this level of requirement has not been an issue.

This seems to be confirmed by AGL Energy, which issued this statement yesterday pointing out that its wind farms were operating according to market rules: “AGL Energy Limited (AGL) today confirmed that it had operated its gas and wind generation assets in accordance with Australian Energy Market Operator (AEMO) requirements and the Essential Services Commission of South Australia and ElectraNet safety and connection requirements.”

This could be an important issue. Because as the Murdoch media hyperventilates about the possibility of large energy users suing wind farm operators, they might be better served taking action against the regulators and policy makers who either had lax regulation or did not provide proper oversight. That would be the responsibility of Frydenberg and his predecessors.

Why did AEMO do nothing ahead of the storm?

AEMO said it didn’t do anything ahead of the storm because it did not see a “credible” threat to generation or transmissions lines. But that claim is a little hard to defend when its own document notes that many wind farms had wind speed limits of 90kmh and it noted that winds were forecast to jump to 120kmh or more. As the NER notes, AEMO is required to take into account the “operation within all plant capabilities of plant on the power system.”

Things it could have done: Rely a little less on the Heywood interconnector for generation so it would have some room to move if there were problems in South Australia. Put at least some local FCAS (frequency and ancillary services) on standby in the state. And in the future, have some battery storage. As we noted soon after the event, even tapping into the battery storage of 10,000 homes could have made the difference. And that would be a lot cheaper than building a new interconnector.

Was AEMO more concerned about wholesale prices than energy security?

One of the justifications used in the AEMO report to not take preemptive action – apart from the fact that it did not see any credible threat – was that it did not want to affect market prices. If it had commissioned local FCAS supplies, or wound back generation on Heywood and got the Adelaide-based gas generators to provide more, that would have increased costs. And, to be sure, if nothing failed there would be some grumbling about the need for additional costs. But exactly what is the role of AEMO here? To protect energy security or to be a price-setter?

Should an independent body investigate the role and actions of AEMO, rather than AEMO itself?

Yes.

Do we really need a new interconnector? And do we really need to double down on gas?

All the proposed “solutions” to South Australia’s high renewable energy penetration involve investing in the two most expensive technology alternatives (and the two primary reasons why South Australia has one of the highest consumer electricity prices in the world): more gas and more poles and wires. Gas, it is said, would provide more “synchronous generation” to ensure system security. A new link to NSW would provide another fall-back.

Both ideas warrant some scrutiny. Another interconnector to NSW would have had to use the very same transmission lines that fell over during the storm, so that wouldn’t have been much use. As the AEMO report makes clear, gas and other fossil fuel generators are so damn slow in responding, they wouldn’t have had much impact either.

So why not battery storage? Storage experts say that just using the battery storage from around 10,000 South Australian homes might have been able to stabilise the grid long enough for the market operator to react. Grid-based storage and micro-grids are the technologies the US and other places have turned to after their centralised networks were smashed by their own storms.

So why don’t we do that here? Because the likes of AEMO and Frydenberg insist that battery storage is still a long way from commercial pricing. But such assessments are based on that 20th Century thinking and the assumption that batteries, like fossil fuel generators and poles and wires, cannot do more than one thing at a time.

As New Zealand network operator Vector points out today, battery storage has numerous potential uses and revenue applications: time shifting solar, shifting loads, shaving peaks, implementing demand response, “firming” renewables (providing constant power, for instance, when a cloud passes over a solar farm), as a back-up power supply when the grid fails (read these stories about consumers unaffected by blackout), as the centrepiece of a microgrid, for ancillary services (providing FCAS), and as a cheaper alternative for poles and wires, upgrades and new transformers.

That’s quite a list. Frydenberg should wake up to new technologies, and along with other state energy ministers give the policy rule maker a sharp kick up the backside and tell it to get cracking, and not to be so focused on the whining of ageing and out-dated fossil fuel generators and grid operators who seem more intent on holding consumers to ransom.