Rooftop solar takes the heat off ageing fossil fuel generators

The growing amounts of rooftop solar across Australia has helped ease pressure on the grid in the first day of a nation-wide heatwave that will put the grid to its first major test of the summer.

South Australia and Victoria were expected to bear the brunt of the heat on Wednesday, with other parts of Australia, and particularly NSW and the major population centres around Sydney, due to be affected later in the week.

Tuesday, according to the Bureau of Meteorology, was the hottest day ever in Australia, breaking the record by some margin. It could be that that record is broken again this week. (Update, it was on Wednesday).

The Australian Energy Market Operator has warned – in its summer readiness plan, and in numerous other forums – that severe heat is the major threat to power supplies this summer, particularly on ageing and increasingly fragile coal and gas plants that can trip under the stress.

AEMO says it should have enough capacity to meet demand over the summer, but in case of the likely tripping and failures of some generators, it has more than 120MW of emergency reserves in place and a further 1,500MW of “back-up” – mostly in the form of demand management contracts that would see big and small consumers being paid to ease down their load.

Victoria is considered the most vulnerable state because it is where the supply-demand margin is at its finest, and where two big fossil fuel units – at the Loy Yang A brown coal generator, and the Mortlake gas generator – are yet to return to service after lengthy outages. The middle of a heatwave is not the best timing for the usually problematic task of bringing a unit back on line.

Many conservatives and renewable energy critics are hoping – privately and not so privately – that outages, and “load-shedding” do occur, to underline their view that even more money should be spent on extending the life of ageing and decrepit coal and gas generators, or building new ones, and in any case stopping new wind and solar farms.

The Australian Financial Review spent most of its front page, and its editorial, on Wednesday morning on the assumption that the lights would go out on Wednesday. It based its news story on the fact that AEMO has issued calls for “lack of reserve” level 2 out to the market on Tuesday.

These are routine calls, which ask for a market response, and the matter was resolved even before the AFR article – with the headline Victorian scorcher could shut down big power users – went to print.

But that didn’t stop the AFR editorial team from revealing its ignorance and prejudice in an editorial titled Blame climate failures for the power going out – a confusing grab-bag of coal industry talking points that would most likely cause most energy industry participants to shake their head in dismay.

As it turned out, rooftop solar took the heat off the situation, as had been predicted by AEMO in its summer plan. In South Australia, rooftop solar accounted for 30 per cent of demand in the middle of the day as the temperature soared to 42°C, and overall demand jumped above 3,000MW.

In Victoria, where temperatures nudged 40°C in Melbourne, and rooftop solar was providing 17 per cent of total demand – which had soared to more than 9,000MW – and contributed around 1,400MW at its peak, not much short of the capacity of the Hazelwood brown coal generator that closed two years ago.

There had been expectations, earlier in the day, that the wholesale market price would hit the allowable peak of $14,700 a megawatt hour. In the end, power got more expensive in the late afternoon as rooftop solar wound down, but it did not go above $300 in either state (30 minute settlement).

To be sure, further challenges lie ahead, with temperatures to jump even higher in Adelaide on Thursday and Friday, and in Melbourne and other major cities.

But what rooftop solar has done is both reduced the operating peak in the middle of the day, and shoved it into the early evening. That ramping down in the late afternoon can still be a challenge for the market, but the fact that the pressure can be taken off some fossil fuel generators for lengthy periods in the heat of the day is important.

It also goes some way to de-bunking the portrayal of rooftop solar as an irredeemable “cost” on society. Such assessments, championed by the likes of ACCC chair Rod Sims, deliberately ignore the broader benefits of rooftop solar – both in its ability to reduce wholesale market prices, and to add to system security.

It was rather ironic, then, that AEMO should hail earlier this month the role of rooftop solar and battery storage – in subsidised installations in low-income and Housing Commission homes in South Australia – should play an important role in keeping the grid stable when the country’s biggest coal unit at Kogan Creek unexpectedly tripped.

Not only are the low-income housing tenants benefiting from lower electricity bills, their equipment is providing a key service to all customers, and they are earning income from those services.

Which is why AEMO is not particularly fazed by the prospect of the amount of rooftop solar, which has grown more than 2GW in 2019 alone as another 300,000 homes put panels on their rooftops; and will likely grow three-fold in the coming decade or two, and account for one-quarter of all demand by 2040.

That’s because – properly managed, with the right visibility over the resources, the correct market signals, and smart inverter settings – rooftop solar and associated storage systems, and possibly even electric vehicles, will be useful resources that can boost resilience rather than be a liability.

Someone should tell the team that helps form the editor’s opinions at the AFR.

“Australia has become one of the world’s biggest energy exporters, but struggles to keep the lights on at home due to the climate wars,” the AFR proclaimed.

And who has played a prominent role cheering on the climate wars from the sidelines? And hasn’t yet stopped? Perhaps the AFR editorial team is urged on by some of the same people who swamp RenewEconomy’s inbox, hoping for the lights on and – desperately and pathetically – announcing they have switched on their air-con units to try to help that happen. Some people do need help.