Queensland coal units send prices negative, because can't switch off | RenewEconomy

Queensland coal units send prices negative, because can’t switch off

Negative price are still happening in base-load coal country, and Queensland is proof of that.


spot price - region

From time to time, in an anti-rewenable bluster, critics will point to the phenomenon of “negative” prices on the wholesale electricity market as “proof” that renewables like wind energy are “useless” and produce electricity when no-one wants it.

Fact is, negative prices have long been a feature of electricity markets around the world, particularly those that depend on “base-load” coal generation that doen’t like being switched off at night-time when their output was no longer needed.

Generators will underbid the other, pushing prices down to the floor of minus $1,000/MWh, because it makes more sense to them to pay someone to take their output rather than going through the hassle of powering down the units.

Authorities and regulators went to great efforts to cover their back, introducing “controlled loads” that forced hot water systems to be switched on only at night (and undermining the case for solar hot water units), and offering cheap energy to manufacturers to use their equipment at night time.

Negative price are still happening in base-load coal country, and Queensland is proof of that.

With just a single ageing wind farm of just 12MW in its grid, it can’t blame wind energy for the negative prices of recent weeks, it’s because the coal units were competing for the privilege of not being turned off.

A new price monitoring report from the Australian Energy Regulator highlights four occasions in late November when prices in Queensland went negative.

The issue was the constraint on the network linking Queensland and NSW, because of maintenance. So instead of being able to export coal power to NSW, the Queenslanders were forced to consume it themselves, or switch it down.
price chart

The first negative pricing event occurred at 4am on November 28, when prices averaged minus $129/MWh. That was briefly arrested when CS Energy, the government owned generator, decided to call on 240MW to pump water uphill at it Wivenhoe pumped storage facility.

But when that was down, prices went negative again, falling to minus $132/MWh at 5am. There was twice as much coal and gas capacity than was needed.

Two days later, on November 30, the dose was repeated, right down to the switching on of the Wivenhoe pumps again for a brief amount of time.

This time, however, the price hit the floor of minus $1,000/MWh in two five minute dispatch intervals and the price for the 30 minute settlement period was minus $327/MWh at 4am and minus $290/MWh at 5.30am.

So, it just goes to show that excess wind is not the only cause of volatile and negative pricing, it happens with coal too. And peak pricing events are also not the fault of wind and solar, they happened more frequently when there was only coal, gas and hydro plants available.


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  1. Malcolm M 3 years ago

    It’s not just coal that’s inflexible, it’s combined cycle gas. The Darling Downs plant continued to produce about 260 MW during this period, and Yarwin about 160 MW. Yet gas has a reputation for flexibility.

  2. Peter F 3 years ago

    Of course if they had a bit more storage or even just ripple control of hot water systems which has been around long before the internet, they probably could have avoided the negative price events.
    If that is too hard, annual consumption in Qld is about five times SA perhaps they need another 500MW/650MWh of storage and that would just about take out the negative demand periods

    • Trent Deverell 3 years ago

      Well actually Ergon and Energex has had plenty of ripple controllers in place since the early 80’s across Queensland.

      As pertains to these neg price events, T33 supply would have been available after ~10pm, would have meant most of the connected hot water systems would have been fully hot.

      As for those on super-economy T31, well there could have been a case to trigger an early signal, but there is probably no incentive for Ergon or Energex to do so, or in any case enough co-ordination, or pre-existing knowledge on how much load would be available and for how long.

      In the end it proves the Italian Stalion and his mad mate in Dawson are completely misguided that Queensland needs a 10th coal-fired power station, when it can get by with 5 or 6 in the middle of night, less one additional if NSW isn’t taking the excess as applied to these events.

      But that aside, perhaps there lies an opportunity to improve demand management to better provide options to use short-term instances of excess generation, as much as everyone is focused on ways of losing load when generation is insufficient…

      The SEQ Water Grid could have used the excess power to move water out of the Gold Coast Dams, or maybe run the Tugan De-salination plant. Turn the Burdekin-Townsville Pumps to 100% and send the Mayor a credit note is another..

      Boyne Smelter could have timed some extra pots, although their power is substancially linked to spot wholesale pricing… well lucky them… what a bonus to be “paid” >$200MWh to press start.

      Might it be lesson though that extra pumped hydro, battery storage and future avenues such as hydrogen production and well defined industrial process loads triggered by smart coordination, need not be the coal generators worst enemy…… keeping in mind the coal generators are already are their own worst enemy all by themselves..

    • wmh 3 years ago

      People are waking up to the fact that they can run their domestic hot water systems from their PV, thus saving about 20% (NSW) of their energy costs. Because this heater load will no longer be available, life will become harder for coal-fired generators.

  3. Joe 3 years ago

    I’m just thinking out loud but Negative Pricing would have to be recouped from somewhere, yes…households by any chance?

    • Wallace 3 years ago

      The plant that sells at a loss hopes to make it back by being able to sell over the next several time blocks because it won’t be working its way back up to speed.

      What happens is that gradually these large thermal plants see their profits shaved away and they slip into the red. And then they close.

      With more and more wind able to bid in close to zero at night and more solar able to bid in close to zero during the daytime the number of profitable hours for these plants shrinks. At some point they can’t stay in business.

      • Joe 3 years ago

        …and so he end of Coal, not that I’m a sad one bit.

  4. Tom 3 years ago

    This just goes to highlight that wind and solar are MORE dispatchable than coal.

    Neither wind, solar, or coal can turn themselves on when required, but at least wind and solar can turn themselves off when not required.

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