Wind, solar deliver negative electricity prices in middle of day in South Australia

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On Sept 30, South Australia ran most of the working day on wind and solar power, and it sent electricity prices into the negative in the middle of the day.

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CleanTechnica

Of all the Australian states, the part of Australia we call South has the most wind and solar capacity per person. Wind power generates electricity equal to about a third of the state’s total consumption and rooftop solar generates about 6%. We don’t have utility-scale solar on account of how we don’t do that sort of thing here. It would require government support and that is not likely to happen. All up, South Australia gets about 40% of its electricity from wind and solar. We would get power from hydroelectricity as well, except to a first approximation we don’t have any. That would require rainfall and land that isn’t as flat as a biscuit.

The Coalition Government has been pretty successful in scaring off anyone who might be interested in further expanding wind power anywhere in Australia by putting our Renewable Energy Target up for “review” which is code for “We’re going to get you and your little dog too.” However, they have been unable to stop the expansion of rooftop solar and South Australia should have over 560 megawatts of it by now. That’s about 330 watts per person, which is very good by world standards, and it is definitely having an effect on electricity supply and wholesale prices.

On Tuesday the 30th of September, South Australia managed to go most of the working day with enough electricity generated by wind and solar to meet all demand, and electricity prices went negative for a considerable period that morning. Now, I wasn’t in South Australia when that happened, I was in Queensland which is the pointy bit of Australia on the upper right. But fortunately it is no longer difficult to find examples of renewable energy supplying all electricity use and I grabbed this 30-minute “Demand and Price” graph from the Australian Electricity Market Operator’s site at 12:43 on Saturday.

AEMO-1243-18-Oct-20141

The graph has the wholesale electricity price in tenths of a cent per kilowatt-hour on the left and grid electricity demand in megawatts on the right. Time runs along the bottom but you need to add half an hour to that to get South Australian time which is what I’ll be using in this article. To the left of the black vertical line which appears two-thirds of the way through the graph is what happened and to the right of it is what was predicted. The red line shows wholesale prices and when that goes negative it’s a sure sign that renewables are generating more than enough electricity to meet the state’s total demand.

As you can see, demand doesn’t form a duck shaped graph here but rather a foothill in the morning followed by a mountain in the late afternoon and evening and then late at night the mountain gives us the finger. The finger is when our off-peak hot water systems all turn on at once and often results in the highest peak of the day. (Yes, I know we’re not very bright. I am aware of that.)

Grid demand started off very low at 5 a.m. but soon increased as people woke up and started to cook breakfast, cows were plugged into electric milk sucking machines, and bakers eagerly shoved their thick sticky dough into hot ovens. But then, at about 9:15 or so, demand for grid electricity started to fall. This was not because people were using less electricity but because production from rooftop solar was increasing and this doesn’t show up as grid demand but subtracts from it. By about 11:30 grid demand was lower than it had been in the wee hours of the morning making almost the middle of the day our new off-peak time. At 12:00 rooftop solar would have been providing about 28% of the state’s total electricity use. The weather in Adelaide, South Australia’s only major population center, was quite beautiful in the morning but grew warmer as the day progressed and increasing air conditioner use would account for rising grid demand from about 11:20.

Looking at wholesale electricity prices, or technically the Regional Reference Price, we see that soon after I woke up it rapidly fell and briefly went negative. However, I did not cause that. Rather it was the state’s only operating coal power plant, the Northern Power Station, which was responsible. It is not a modern, flexible coal power plant and so they don’t like turning it off unless they absolutely have to and the surplus electricity it produced caused prices to go negative. After all, it wasn’t as if they had to pay a carbon price on the coal they burned, so one 260 megawatt unit would have been chugging away at 60% capacity producing electricity equal to about 11% of the state’s total use at the time. In addition, because of fossil fuel’s unreliability, a unit of the gas-fired Torrens Power Station would also have been working at about 25% of capacity to provide spinning reserve in case the coal plant went off line. The excess power would normally be exported, but presumably renewables also had electricity to export and the transmission capacity became saturated causing prices to go negative to discourage anyone from generating more.

After the initial drop to -0.5 cents a kilowatt-hour, electricity prices jumped back up to the not at all high level of over one cent a kilowatt-hour but soon fell back down to -0.3 cents a kilowatt-hour and stayed there for an hour or so. I probably don’t need to tell you how much fossil fuel plants hate negative prices in the middle of the day, which used to be a prime money-making time, for not only is the electricity they produce worth less than nothing, they still have to pay for fuel costs and wear and tear. While negative prices in the past occasionally happened in the early hours of the morning when electricity use was low and wind was high, the state’s expanded wind and solar capacity combined with a grumpy old coal power plant mean they are now happening for prolonged periods in the middle of the day.

While other Australian states don’t have nearly as much wind capacity, rooftop solar is expanding across the nation and pushing down wholesale electricity prices everywhere, which is bad news for incumbent fossil fuel generators. What is currently happening in South Australia is only a taste of the future, because across the whole nation rooftop solar is the cheapest source of electricity for Australian households and small businesses and our Coal-ition government does not have the power to stop it, they can only at best delay it. And since delay will, stochastically speaking at least, kill people, it is something I am quite resolutely against.

This article was originally published on CleanTechnica. Reproduced here with permission

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25 Comments
  1. Les Johnston 5 years ago

    An important description of one day in the life of fossil power. Maybe this day will mark another big step towards fossil power generators becoming just that. Bring it on.

    • Paul Andrew 5 years ago

      I can’t wait for this to be the norm and fossil fuel plants rarely used, if at all. We have the technology and we know how to do it, we just don’t have the political will to do it like other places in the world are now doing

      • Les Johnston 5 years ago

        Cannot come soon enough. So good to see SA leading amongst the sates – though ACT is doing a big step.

      • Ronald Brakels 5 years ago

        Off peak hot water in South Australia is operated off a ripple signal that is sent through the power lines. Generally these systems activate after a random period of time to stop them all turning on at once, but looking at the steepness of the finger it looks like we could use some more randomness. But now that feed-in tariffs are so low for new rooftop solar more people will run their water heaters off solar electricity and this will gradually reduce the strength of our midnight finger.

      • wideEyedPupil 5 years ago

        I wonder if the Palmer-Hunt Direct Action $2.5b fossil fuel slush fund will be available to ‘compensate’ coal and gas plants for their market-forced mid-day slump. They’ll say ‘oh look how much we have reduced or carbon footprint’ (despite spending millions of dollars on lobbyists fighting the very same pro-solar and pro-wind policies which have resulted in their power midday outputs) give us even more taxpayer money for existing in a comparative market where we have natural disadvantages (marginal costs) and no longer have an unnatural monopoly.

  2. Winston 5 years ago

    Please, don’t listen to this guy. He has no idea.

    What happened was that Tasmania stopped importing electricity from Victoria, most likely due to an outage on Basslink. That led to a sudden dip in prices in Victoria, followed by a fairly speedy recovery where Victorian generation backed off.

    Northern was at its 2-unit minimum generation, 300MW. TIPS B had 60MW running and Osborne was on, as always, because it’s a cogeneration plant with its primary energy source being in the form of steam from the adjacent soda ash plant.

    SA was not exporting at its maximum capacity, but the minimum generation level of thermal plant was reached.

    It is very common that thermal plant set their minimum generation levels at a negative price.

    So please. Wind and solar might set the scene, but if you’re going to point the finger, it should be at a transmission outage combined with a massive increase in hydro generation in Tasmania.

    And lower prices are bad for all generators taking the RRP, not just fossil-fuelled ones.

    • Brian 5 years ago

      “Please, don’t listen to this guy. He has no idea” you said to the
      author of the article. Perhaps you should be a bit more careful. The
      Soda Ash plant Osborne used to supply (Penrice) closed down more than a
      year ago. So it may have been the largest co-generation facility in
      Australia – but with no one to sell steam to any longer Osborne probably
      wasn’t running on the day specified above.

      • Winston 5 years ago

        Hey, interesting observation. Osborne was running, at 150MW all day. But as you say without a market for the steam. Looks like it has something to do with Origin’s long term power purchase agreement (the numbers match, anyway): http://www.originenergy.com.au/news/article/asxmedia-releases/1028
        They’re not taking the spot price, so they don’t care.

    • patb2009 5 years ago

      Germany is seeing routine negative day time pricing as all that small PV comes roaring in.

    • Ronald Brakels 5 years ago

      I see Tasmania was up to its old tricks again yesterday, pushing prices negative again for hours. A very talented state indeed.

      • Ronald Brakels 5 years ago

        Here is a graph I grabbed from the AEMO site at 10:35 Adelaide time this morning. As you can see (if the graph is displaying properly) there were negative electricity prices in South Australia yesterday. There were also a whole heap of them at the end of last month as reported here:

        https://reneweconomy.com.au/2014/south-australia-hits-100-renewables-for-a-whole-working-day-86069

        I can only presume that Tasmania is getting the electricity to pelt towards that skateboard ramp in Hobart and leap all the way to South Australia bypassing Victoria and their own state electricity grid. Like I said, them Tasmanians is very talented people

        • Guest 5 years ago

          Let’s try that graph again:

        • Winston 5 years ago

          Not sure if you’re being facetious or not.

          Here it is a bit more clearly. On the top, price, demand and generation in SA. On the bottom, Tas to Vic flow on Basslink (so negative is importing surplus energy from Vic).

        • Jon 5 years ago

          So are you saying that these negative prices are a good thing? Maybe you could explain how this impacts the people who are looking to build more wind farms in SA, or, for that matter those who already operate wind farms in SA. I think the conclusion would be that the saturation of renewables is killing new investment and that this is the real problem with the RET, not the size of the target.

          • Ronald Brakels 5 years ago

            For consumers the lower average wholesale price resulting from increasing renewable energy capacity is a good thing since it means we pay less for electricity, or since this is Australia where we have to support $8 million+ salaries for senior Stanwell corp. executives as well as transmission overcapacity, it means that what we pay for electricity doesn’t increase as rapidly. It’s also good for industry since they also pay less. A lower average wholesale price is of course bad for the trouser pockets of people who sell wholesale electricity to the grid. For life, which includes things such as bottle nosed dolphins, krill, coral, coccolithophores, secretary birds, pangolians, and apes including ones that use the internet, more renewable energy and less fossil fuel energy is good because fossil fuel energy tends to kill them.

          • wideEyedPupil 5 years ago

            wow. you really don’t understand how much the grid can depart from natural monopoly centralised generation do you? near zero marginal costs for renewables means they can take a few hours a day of negative prices. infact the Ivanopah solar thermal plant in USA has no storage and makes all it’s money feeding into the afternoon/evening shoulder on wholesale premium price and still managed to raise capital and will deliver ROI.

          • Jon 5 years ago

            As someone who has worked for many years trying to build business cases for new large scale renewables (in Australia!!), I do understand how the Australian energy market works. Large scale renewables are not a departure from centralised generation, they work in exactly the same market conditions. As the market penetration of very low SRMC generation increases, the wholesale market price decreases, and the cost of LGCs increases.
            The irony is that consumers looking to benefit from the lower wholesale prices as a result of increased renewables can only realise the benefits if they don’t buy renewables. If they elect to buy 100% green energy they will be up for the full cost of the LGCs associated with their electricity consumption (an additional $50-$60 /MWh). No doubt you have ticked the 100% green option!

  3. Beat Odermatt 5 years ago

    SA has actually the potential for hydroelectricity. If power companies would have a little bit of foresight, they would invest in hydro storage capacity. Companies in Germany, Austria and Switzerland buy cheap electricity frequently generated by wind during off peak times and pump water from lower dams into higher dams. The use of pumped storage provides a win-win situation for customers, generators and distributors. It seems we still have too many Luddites trying to defend their flat earth theories.

  4. Yasea 5 years ago

    Seems to me like a major business opportunity for grid size storage systems. Buy electricity at near zero and sell it at high cost.

  5. Jon 5 years ago

    As usual off peak power was supplied to heat hot water systems in the night. Why wasn’t power supplied when the price went negative during the day. Surely the off peak hot water heating should be done whenever there is spare capacity. If we all get flexible with our power usage the uncertainty of renewable supplies becomes less of a problem.

    • patb2009 5 years ago

      they lack the real time control schemes. right now it’s all running on timers, i imagine

      • Jon 5 years ago

        It must be easy enough to manually override the timer, surely? All those millions spent on the transmission system instead of better control technology sounds stupid. The shareholders should be complaining at the waste except we all are kept in the dark. It’s called dumbing down.

      • Ronald Brakels 5 years ago

        South Australian off peak hot water is activated by a ripple signal which is sent through the powerlines. Generally these sorts of systems are supposed to have a random timer which prevents all systems coming on at once, but looking at the steepness of the finger it looks like we could do with some more randomness. But since the feed-in tariffs for new solar are now so low more people will run their hot water systems off solar electricity and so gradually reduce the strength of our midnight finger.

  6. Ronald Brakels 5 years ago

    A little weekend update. Today, Saturday the first of November, South Australia spent a fair chunk of the day with negative electricity prices. As can be seen in the graph below the state had periods of negative electricity prices early in the morning thanks to wind power followed by hours of negative prices in the middle of the day due to a combination of wind and solar. With a cool breeze to keep the need for airconditioning at bay and to also help boost the output of rooftop solar, grid demand was very low despite some patchy cloud that still hung around after the skies began to clear late in the morning. This resulted in grid demand being an impressively low 750 megawatts, which is exceptional even for a weekend. Electricity demand will go up as the temperature rises now it is summer, but I’ll be very interested to see how things proceed now the state has an extra year’s worth of rooftop solar installed which can in total produce about half a gig under good conditions.

  7. Ronald Brakels 5 years ago

    And in what might be the last update, today on Friday the 7th of November South Australia had negative electricity prices for around half an hour starting at about 10:30 in the morning. I presume that renewables plus the coal plant and what ever other fossil fuel capacity happened to be operating managed to more than meet demand for a while there, forcing electricity prices to go negative. If South Australia had any pumped storage it certainly would be good news for them as they would be paid to use electricity to charge their storage and then they’d get paid again to sell it in the evening when wholesale electricity prices are expected to go as high as 4 cents a kilowatt-hour. But it probably wouldn’t take much storage to generally prevent electricity prices from going negative.

    With temperatures potentially hitting 40 degrees around Adelaide today it is the first hot day of summer and grid demand is expected to peak at around 1,900 megawatts at about 6:00 pm, which is nearly two hours before sunset. But it’s going to cool off tomorrow and it’s the weekend, so we won’t have a chance to how the grid performs under strain yet. Given the expanded rooftop solar capacity our rolling blackouts during summer heatwaves should be a thing of the past.

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