Pressure mounts on NSW to follow on solar switch-off mechanism, in new warning on minimum load

Pressure is mounting on New South Wales to fall in line with other major states and introduce a rooftop solar switch-off mechanism for use as an emergency backstop measure at times where the state’s solar households produce too much power that threatens to destabilise the grid.

A new report published on Monday details why the nation-wide implementation of – and compliance with – a the emergency mechanism is an “urgent priority” for the Australian Energy Market Operator, in the bid to manage the energy from more than 4 million solar homes around the country.

The report, which focuses on addressing issue when there is too much power being produced and not enough demand, is the polar opposite to the struggles in the past week to ensure that NSW had enough supply to meet surging demand, and in which rooftop solar played a critical role during the middle of the day.

The “switch-off” mechanism – called for in the federal government’s CER Roadmap in July and flagged by AEMO more than a year ago – is a “last resort” measure devised by AEMO and electricity networks to ensure rooftop solar systems can be curtailed or remotely disconnected from the grid if needed.

See also, Rooftop solar switch-off: Why and where it’s being used, and where it’s headed

So far, the South Australian, Western Australian, Queensland and most recently Victorian governments have all taken steps to implement this capability, ahead of the end-of-2025 target.

New South Wales – where rooftop solar systems contributed a record 61% per cent of underlying demand at one point in late October – is expected to be next, as Renew Economy reported in October.

“To maintain system security, all mainland NEM regions need operationally effective emergency backstop capabilities as soon as possible,” the report says.

“This includes extending backstop application to all distributed PV systems in Queensland, implementing a backstop mechanism in New South Wales/the Australian Capital Territory, and implementing effective monitoring and enforcement regimes to increase compliance in all regions.”

In NSW, AEMO report warns that a combination of emergency conditions and periods of minimum demand could require the use of backstop measures in the coal-dominated state as early as October next year.

This should not come as a surprise. As the report notes, “for several years, AEMO has flagged this emerging risk with industry and … developing capabilities to temporarily dial down or disconnect rooftop solar as a last report in emergency situations.”

And in October last year, AEMO chief Daniel Westerman personally urged all states to adopt emergency switch-off mechanisms, as a key tool to better control “more than seven Eraring power stations” worth of consumer installed PV.

Nor should AEMO’s new report be seen as a warning of imminent “system collapse,” as some news headlines suggest.

As AEMO points out in an easy to read fact sheet accompanying the report, it can operate the power system with high levels of rooftop solar most of the time.

“However, power systems require electricity demand at safe levels and essential system services, which are provided by large power stations with spinning turbines, to maintain a safe and resilient electricity system during normal operating conditions, but also respond to issues that can impact grid security.

“On sunny, mild-temperature days, typically in autumn and spring, large volumes of electricity from rooftop solar can reduce the need for electricity from grid-scale generators via the transmission network, limiting access to essential system services.

“When low demand (minimum system load) periods occur at the same time as a network issue, such as a transmission outage, AEMO as the power system operator may need to take actions to keep the grid secure, mitigating the risk of critical infrastructure damage and widespread or
prolonged blackouts.”

The report also stresses that the solar switch-off button is by no means the only tool in the market operator’s kit. There are other tools to manage periods of low demand as they happen, and more ways, still, to prevent them from happening in the first place.

AEMO notes that since the introduction of the big solar button in South Australia in 2020, it has hit it on just three occasions: March 2021, November 2022 and February 2024.

Meanwhile, South Australia’ Smarter Homes Program aims to ensure the state’s incoming fleet of new rooftop solar systems can “ride through” grid faults and be subject to changing export limits, rather than being switched off entirely.

“AEMO does not want to directly control people’s rooftop solar,” executive general manager of operations Michael Gatt said in a statement on Monday.

“In rare circumstances AEMO may need to take action to secure the grid, such as directing off grid-scale generation, to solve these emergency events which often occur at the same time as unplanned generation and transmission outages.

“However, after all these actions have been exhausted, the temporary management of rooftop solar by network operators under state government solar management programs may still be required although we expect this may only occur in very rare circumstances.”

To avoid pressing the big button at all will be a whole of industry effort, starting with the introduction of reforms to boost market participation of CER, including by allowing customers to respond to market-based incentives which will also help meet the challenges of low operational demand.

Energy storage will also be key to the future management of excess solar generation on the grid, including community batteries on distribution networks, batteries on wheels in electric vehicles, and smaller batteries in homes and businesses.

AEMO has already introduced a new protocol and warning system called Minimum System Load, and has flagged it could ask big batteries to stand by on empty if the grid reached a point where new load is required. The batteries would then be instructed to charge up.

In NSW, which often tops the charts for the monthly installation of new rooftop PV capacity, the state Labor government kicked off a home battery incentive scheme last month, which is hoped to boost the uptake of consumer storage.

Big batteries will also play a role, with projects currently under construction including 850 MW, 1680 MWh Waratah Super Battery, which is now being commissioned.

Others under construction are the 500 MW, 1,000 MWh Liddell battery, the 700 MW, 2,800 MWh Eraring battery and the 250 MW, an d 500 MWh Williamsdale battery.

Those eight hour battery projects also being built include a 275 MW, 2,200 MWh facility at Myrtle Creek in northern NSW, the 49 MW, 392 MWh Goulburn River facility, and the 50 MW, 400 MWh Limondale battery.

The 100 MW, 200 MWh Capital battery is also going through commissioning, with other big batteries are under construction at Koorangie, Quorn Park, Smithfield, Orana, and New England. And this week the state government approved a new 500 MW, 2,000 MWh big battery at Mt Piper, next to the existing coal fired generator.

For AEMO’s part, the market operator says the solar switch-off is just one part of its own efforts to support the continued uptake of rooftop solar, residential batteries and electric vehicles while maintaining a reliable electricity supply and secure grid.

“We’re doing this by contributing to new market designs, trials and research, which will continue through the National CER Roadmap, approved by Australia’s Energy Ministers in July,” Gatt said on Monday.

“The CER Roadmap sets out an overarching vision and plan to unlock CER at scale and identifies measures to ‘unleash the full potential of CER’ by establishing the required mechanisms, tools and systems.

“This includes measures to support ongoing power system security, particularly the requirement for backstop mechanisms to be in place by the end of 2025 for emergency response to ensure operational security when required.

“It also includes reforms to increase the opportunities for market participation of CER, including through enhanced coordination, allowing customers to respond to market-based incentives which will also help meet the challenges of low operational demand.”