One of the more bizarre rules of Australia’s National Electricity Market looks set to be unwound, in a move that regulators, network owners and project developers hope will avoid traffic james of wind and solar plants in the grid, and un-necessary overspending.
Wind and solar farm projects have been hit by a wave of issues in the last two years, mostly relating to congestion on the network, and the winding back of what is known as the “marginal loss factor”, and on system strength, which has forced many to spend around $25 million each on machines known as synchronous condensers.
Some of these project developers have been caught by surprise, because they had no idea that rival projects were being proposed nearby and in the same part of the grid. Network owners and the market operator complained that while they had visibility over what was going on, the rules on project confidentiality prevented them from sitting everyone in the same room and sorting out a solution.
The impact on some projects has been devastating. Some wind and solar farms have had their output downgraded by more than 10 per cent, and up to 20 per cent, as a result of changes to MLFs.
Absurdly, other project developers have been asked to install syncons in the same part of the grid as others, even when one installation may have been sufficient for all the projects in the region.
One of the first efforts to address this problem is to remove, or at least relax the confidentiality clause.
The Australian Energy Market Commission on Thursday published a draft rule that it says will give developers better and more up-to-date information about what new generation projects are in the pipeline.
“This may help businesses make better investment decisions on where to locate new generators and assess project viability,” it said in a statement.
“More than 50 gigawatts of new wind and solar projects are in development, which is roughly equivalent to the national electricity market’s entire current capacity,” said AEMC head of security and reliability Suzanne Falvi.
It noted that this was in addition to the 5GW that will be connected this past year and next. (AEMO said earlier this week that it was dealing with enquiries from nearly 100GW of new projects).
“The smooth entry of these new generators relies on developers having up-to-date information about where and when other developers are proposing to locate generators to help avoid traffic jams in generation,” Falvi said.
“More efficient decisions on where to invest in new generation ultimately benefits consumers by promoting reliable supply at lower costs,.
The draft rule requires transmission businesses to share this information with the market operator, the Australian Energy Market Operator (AEMO). This will enable AEMO to publish more detailed, up-to-date data on proposed and existing generators on its generation information page on its website.
The Commission’s draft rule also extends access to key technical information to certain types of developers who are not “registered participants”. This reflects the emergence of new business models where some developers are selling generators before connecting to the grid.
The rule change has been welcomed by AEMO. “Australia is experiencing unprecedented transformation across the energy sector, including a large growth of new generators connecting to the grid,” said AEMO’s head of system design and engineering Dr Alex Wonhas, said:
“This draft rule change will further help developers access the information they need to enable prudent investment decisions to participate in our energy future.”
The Commission hopes to implement the changes by the end of February next year, although developers will be able to access relevant system information from late October. Submissions to the draft determination are due by September 12.