Spot electricity prices in the wholesale market in Queensland have run below zero for nearly all the daylight hours over the last four days after strong winds brought down the main transmission link to NSW, leaving Queensland unable to export to its power hungry southern neighbour and local power plants fighting for the right to generate.
Transmission company Transgrid reported on Friday that fierce storms had knocked down poles and conductors (pictured above) and restricted the amount of power that could be exported south to the usually power hungry NSW.
That meant there was a vasty reduced export market for Queensland power, which coupled with low demand due to a long weekend, mild weather and sunny conditions, translated into an average price for three days – Friday, Saturday and Sunday – in Queensland of minus $7.64 a megawatt hour.
On Saturday, according to AEMO data, the spot priced averaged minus $40 a megawatt hour over the 24 hour period, as generators offered to pay others to take their output so they wouldn’t have to shut down. Coal generators got an average price of minus $4.50/MWh over the the three days.
The negative prices continued into Monday morning, particularly as rooftop solar and large scale solar began to have an impact, although the return of some capacity returning to the QNI link and more exports heading south eliminated the negative pricing events by early afternoon.
The negative prices over the weekend also came despite the biggest storage unit in the state, the Wivenhoe pumped hydro facility, having one of its two pumping stations operating at or near full capacity for much of the negative pricing events.
Most coal generators dialled down their output but there was only so far they were prepared to go. The most vulnerable were large scale solar farms – particularly those without a fixed power purchase agreement, or whose contracts require them to stop generating if prices go negative.
As this chart shows, the aggregate output of the state’s more than 20 solar farms hit a morning peak of 909MW, and an afternoon peak of 961MW, but fell to as low as 212MW as various solar farms ramped down or shut off completely because of the negative power prices.
Among those solar farms to stop generating at various times during the day were the Barcaldine, Childers, Clare, Clermont, Daydream, Emerald, Haughton, Hughenden, Kidston, Lilyvale, Longreach, Oaky 1 and 2, Rugby Run, Susan River and Yarranlea solar farms.
The only ones that didn’t appear to be badly affected were the Collinsville, Darling Downs, Hamilton, Hayman and Ross River solar farms.
Cooper’s Creek, the state’s biggest wind farm – although still not completed and operating at full capacity – also appeared to reduce its output in the middle of the day, possibly to reduce the amount of electricity to be delivered at negative prices. AGL has a contract to buy the combined output of the wind farm (electricity and renewable energy certficates), for less than $60/MWh.
Queensland is not the only state to experience negative prices. According to Morgan Stanley, there were 19 negative events in NSW in April, and 95 in Victoria, which it suggested were record levels.
This, of course, presents opportunities for more storage. But as Morgan Stanley also observed this ‘double merchant’ opportunity is highly sensitive to the amount of storage in the market (which it labelled the ‘Ouroboros’ Problem, after the mythological snake eating its own tail).
“Market redesign will affect this problem,” it noted.