Grid held together by solar, load management, as coal fails in heat

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Extreme heat plus coal outages have made it a rough couple of days for the Australian grid operator. But there are some of good news energy market stories to come out of this heatwave, too.

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(AAP Image/Dave Hunt)
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The Australian Energy Market Operator has pulled out all the stops for a second day running, as extreme heat combined with coal power outages pushed the grid to the edge of its limits in South Australia and Victoria.

In Victoria, AEMO enforced customer load shedding for a second time in 24 hours on Friday, in a bid to meet the demand of millions of air-conditioners pumping their hearts out on the hottest day for the state since Black Saturday in February 2009.

In parts of Victoria, temperatures reached 47°C before a cool change brought relief at around 2.30pm.

On Thursday, Alcoa Australia – the largest electricity user on the Victorian grid – was ordered by AEMO to cut its power usage by between 100-400MW at the Portland Aluminium smelter over a period of just under two hours.

And on Friday, with a cool change tantalisingly close, the AEMO again ordered load shedding in the state, this time affecting up to 60,000 Melbourne households – although not all at once. Alcoa was also expected to have to curb its energy usage again at some point.

“Coordinated supply interruptions are required to maintain electricity supply and protect the power system as Victoria deals with record-breaking high temperatures, high demand and reduced generation availability,” an AEMO statement issued this afternoon.

“AEMO has instructed load shedding of approximately 200 megawatts (MW) and as a result, approximately 60,000 Victorian customers are expected to be affected by power outages as a result of electricity supply disruptions,” the statement said.

In comments to press on Friday, AEMO chief Audrey Zibelman said the load shedding was based on the maximum amount that could be taken off in an area, and was equitably distribute across the region.

“It’s up to two hours, is what we’ve asked for. So, hopefully what we’ll do is we’ll see it through, it will be for a temporary period of time, they’ll restore it.

“And if we do additional load shedding, usually the process is they go to different areas. So, it is – we call it rotating brown-outs for that very reason. As I said, you try to get people off for a short period, and then get them back on so, you know, because to give people relief.”

The market operator has also had its RERT (Reliability and Emergency Reserve Trader) mechanism in action since around 8.30am on Friday morning, again for a second time in under two days.

Through this mechanism, a number of power retailers, distributors and energy management firms – including Powershop, Flow Power, Reposit Power and Greensync – are called up to reduce their customers’ loads and send whatever surplus power they have stored in batteries or from other resources to the grid.

In South Australia, AEMO also called on the state’s fleet of diesel generators, tapping them as part of the RERT mechanism for the first time since they were installed in the wake of the state’s 2016 system black.

With supply at a premium, wholesale electricity prices, too, are peaking, reaching the price cap of $14,500/MWh in Victoria and South Australia a number of times between 4-9pm on Thursday, and heading rapidly north again on Friday.

None of this is a great outcome for consumers – and it’s safe to say it’s been a rough couple of days for AEMO. All said, it had to call on more than 1000MW of emergency supply mostly in demand management, but some in enforced outages – almost exactly the amount of coal power that has gone missing from the failure of two units at the ageing Yallourn and the absence of another unit at Loy Yang A.


But there is a good news story to come out of this heatwave, too, says The Australia Institute’s Richie Merzian: the success of Australia’s huge solar PV resource in shaving peak demand.

“Extreme heat leads to peak demand – it’s not news. But it also leads to peak solar generation – and that’s when the grid needs it most,” Merzian told RE.

“On Wednesday, you had rooftop solar shaving peak demand by over 2700MW – more than an entire fully functioning, fully operational Liddell power plant.”

And on Friday, as the above chart from the Climate and Energy College’s Dylan McConnell shows, rooftop solar reduced the peak demand by just over 900MW in Victoria.

Indeed, as the table below shows, South Australia’s renewables – both solar and wind – were doing some important heavy lifting in the heat on Friday.

“If you’re able to take over 2000MW off peak demand, that’s the difference between potential blackouts,” he said. “And it’s coming at a crucial time, when our system really benefits.”

And the uptake of battery storage to complement all the behind-the-meter solar – BNEF has predicted that Australian households will install 70,000 new home batteries this year alone – will extend that benefit further into the evening.

And that extending peak shaving will be crucial, Merzian says, as heatwaves become more extreme, with overnight lows hovering around the 30°C mark.

“January saw a new record for overnight high temperatures, so you’re going to be pumping your air-con through the night now, too. The more we can diversify this risk, the better.”

Another success story from grid events like today’s comes from demand management – including that harnessed through AEMO’s emergency RERT mechanism.

David Evans, the director of commercial and engineering at specialist commercial retailer Flow Power says that with the introduction of demand management programs he has seen a significant increase in the interest customers to participate.

“Demand response, from the customer side, you have two options: you can add more generation – which can be quite difficult – or you can reduce load.

“Taking demand off the grid has the same effect of adding generation, which has the same effect of adding load. And through demand response it can be implemented very, very quickly,” he said.

“(Commercial and industrial customers) are starting to understand that the market has very different pricing points depending on what’s happening,” Evans told RE.

“They can see that there is both an opportunity to save money and help out the grid. In essence what you start transitioning to is a much more efficient market.”

Of course, not everyone will see these bright sides. The usual suspects have used the outages to call for more coal-fired power, which, as luck would have it, is also being proposed through the federal government’s energy generation procurement scheme.

“The underwriting new generation program from Taylor was primarily about responding to the ACCC recommendation – which they have basically rebadged completely to support new coal,” Merzian told RE.

“It’s another example of Taylor trying to sell his wares. If the minister really believed this was the solution, then he should take it to the election, rather than rushing to sign contracts before the vote.”

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