Owners and developers of new wind and solar projects in western Victoria and south-west New South Wales are voicing their frustration over new delays for commissioning of projects that they say are otherwise complete and ready to produce.
The Australian Energy Market Operator has advised the owners, developers and contractors that new projects in the West Murray region of Victoria’s grid will only be connected one at a time, as a result of “system strength” issues that have already resulted in the output of five existing solar farms being reduced by half.
The issue affects projects in Victoria and across the border in NSW. Some of those projects that are believed to have been told they will have to queue – one at a time – include Yatpool, Cohuna, Kiamal, Murra Warra and Sunraysia projects.
The latter, Sunraysia, has already caused a dispute between the project owners and contractors because of the failure to obtain a GPS (generator performance standard) – although other issues may be involved.
There is, however, great confusion in the market about who is affected and why, and over the reasons an issue – which had been expected to be solved within weeks – is dragging on and could cause delays of up to a year for some projects who find themselves at the back of the queue.
There are also questions over the role of AEMO – which uniquely in Victoria also acts as Network Planner, a role undertaken in other states by the major transmission companies – Powerlink in Queensland, Transgrid in NSW, and ElectraNet in South Australia – under the supervision of AEMO.
In Victoria, however, AEMO serves both roles. And because of the way the system strength issues have been managed, its decisions are being questioned. And the ruling on a one-by-one routine for new connections has galvanised the industry, as it now affects some 15 different projects where funds have already been committed.
“In every other State in the NEM, the Network Planner can connect new generation while assessing grid studies for potential new plants—all in parallel,” said one senior executive.
“Even in South Australia, with 55% renewable energy penetration, Electranet can successfully do all these things at once—in parallel. Only in Victoria, where AEMO is the Network Planner, will everything slow to a crawl as AEMO has taken the unprecedented step of connecting and commissioning each generator on a sequential basis—completely finishing one registration process, before starting another.
“As a consequence, some renewable generators will lose millions of dollars—if not tens of millions.”
The executive spoke on condition of anonymity, as did all others, because of the sensitivity of the topic and because they all have to deal with AEMO in its multiple roles of network planner, market operator, and because it also negotiates and gives final clearance on connections and commissioning.
RenewEconomy understands that representatives of 15 of the most affected projects are due to meet this week to discuss the issue and what can be done to resolve it. “This decision about queues doesn’t make a lot of sense,” said another senior executive.
“There is a lack of transparency. We have some sympathy for AEMO and we do acknowledge the challenges, but this should be a collective effort. There are a lot of good people in the industry that can put their minds together and solve this problem.”
A third executive told RenewEconomy: “We don’t know exactly where we are in the queue, but we are obviously not close enough to the front of the queue to be happy.”
He said the issue would cost wind and solar companies “millions” in lost revenues, and put business models under stress. “It’s pretty dire. It’s not a good look for the grid, and it could have a massive impact on the VRET (Victoria renewable energy target) program.”
The issue with “system strength” was only identified late last year when modelling – believed to have been produced by one of the project developers – revealed the risk of uncontrolled “oscillations” from five solar plants, should one of the main 220kV power lines trip.
The output of five solar farms – Wemen, Bannerton, Karadoc and Gannawarra in Victoria, and Broken Hill in NSW – was cut by half as a solution was sought.
It was thought initially that the problem could be addressed, at least in the short term, by fine-tuning the settings of the inverters – which all happened to be SMA products – but this has not been finalised.
AEMO, however, has said that the issues are considerable and “unique” in the world, and in a letter to stakeholders late last year warned that the grid was “balanced on a knife-edge.”
In the meantime, the five solar farms have been warned of even greater restrictions, and AEMO has effectively throttled the roll-out of other projects ready to connect or under construction, and warned others that the grid may not be able to accommodate them until longer term solutions – such as upgraded networks and a new link to NSW – can be built. That could take five years or more.
For many, the situation speaks at least partly to the lack of planning and co-ordination in Australia over the last decade or more, when it was clear that the country would build significant amounts of renewables – it was the law, after all – but did little in the way of preparing the infrastructure, rule-changes and planning required of new technologies.
One reader pointed out that the transmission lines now being contemplated were identified more than 10 years ago by AEMO’s predecessor, Vencorp. AEMO is now trying to lay the groundwork for future investment with its much admired Integrated System Plan, a 20-year blueprint of what is needed to facilitate the transition to a low emissions grid, including up to 90 per cent renewables by 2040.
In the meantime, the problems created by a lack of planning are now being felt, compounded by the absence of an over-arching federal policy.
RenewEconomy sought comment from AEMO but did not receive a response before publication. RenewEconomy also sought comment from the Victoria government.
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