The Northern Territory has an ambitious goal of reaching 50 per cent renewables by 2030. But the plan is off to a bad start – the renewable share has barely moved from around 7 per cent – and the Top End’s first four utility-scale solar farms are sitting idle because they cannot gain approval to be switched on.
Three of the four solar farms are owned by Italian multinational ENI – a 25MW facility at Katherine, and two 10MW facilities at Batchelor and Manton. Melbourne-based Merrick Capital owns another 10MW facility at Batchelor, known as Batchelor 2.
All finished construction in 2020, and Katherine at the start of that year. All, however, cannot be switched on because of strict new rules that dictate their bidding behaviour and dispatch, and due to concerns by system control over what might happen if they do. Some suggest the dispute could be heading to the courts.
Two other Department of Defence solar farms have also been delayed by changes in connection rules, a 9.2MW facility at Robertson Barracks, and a smaller 2.5MW facility at the RAAF’s Darwin base, even though they are both “behind the meter” and have batteries equivalent to one quarter of their capacity.
The one operating solar farm in the Darwin region of any size is at the Darwin airport, (pictured below) a 5MW facility which also operates behind the meter, but is not allowed to export any power, even to tenants at the airport itself.
It’s true that many large scale wind and solar projects also face big delays in Australia’s main grid, but as RenewEconomy has written previously, there is a degree of fear and loathing in the Northern Territory over the transition to renewables, which in the case of the NT largely means solar. And it’s not about plans for the world’s biggest solar farm further south at Newcastle Waters, but how to connect relatively small facilities in the territory’s biggest grid.
The problem appears to lie in a mix of old-fashioned scepticism about new technologies, the vulnerability of ageing infrastructure, the particular problems of the Darwin-Katherine grid, and the failure to plan and prepare for the government’s clean energy transition target. The lack of modelling and engineering means that many involved are scared of blackouts.
“They don’t want to connect it”
“System control is scared of dispatching solar. Under the market rules the “least cost generator” should be dispatched first – that’s solar. They just don’t want to connect it,” says Alan Langworthy, the former head of network company PowerCorp, former head of renewables at multinational ABB, and Chair of the Roadmap to Renewables report that outlined the territory’s path to 50 per cent renewables.
Langworthy says the fear of solar is not the fault of solar technology, nor the fault of engineers in System Control, he blames the lack of government planning and a failure to do the necessary dynamic modelling, which would identify what the system needs to handle the shift to solar.
“I’ve been telling them for years they need to complete a dynamic model of the network,” he tells RenewEconomy. “I’m flabbergasted they don’t have one, nor the in-house skills to use it. It’s a complete failure of leadership from the Government in managing the grid going forward.”
Langworthy’s frustrations are shared by the NT Utilities Commission, which has criticised the government for not moving fast enough to deal with the major risks to the grid, either by delivering a detailed plan or implementing much needed market reform.
“Time is running out to meet the emerging risks,” Utilicom says in a withering assessment in its Electricity Outlook Report, which cites the impending retirement of ageing gas generators, the impact of increasing and uncontrolled rooftop solar, and the need to accommodate new generation, such as solar and storage.
“The Commission is concerned the Territory is lacking a clear framework by which these concerns can be addressed in the most efficient and timely manner,” it writes.
“The government, or System Control must urgently and clearly define what services are needed to address current and future security challenges.”
What everyone is calling for is the equivalent of an Integrated System Plan that has been prepared by the Australian Energy Market Operator for Australia’s main grid, or the Whole of System Plan drawn up for Western Australia.
The Northern Territory clearly has challenges. It has around 170MW of average demand, but already has more than 100MW of rooftop solar. It has to operate significant amounts of gas generation as “spinning reserve” – at great cost – and is making new connections almost impossible.
The companies most affected by the stand-still on the solar farms – developers ENI and Merricks Capital and the retailers Rimfire and Jacana (which have off-take agreements) – would not comment on the record to RenewEconomy.
New rules are “onerous, unprecedented and indefensible”
But ENI, a major international energy company which operates a major offshore gas field near Darwin, has made its frustration well known, accusing the regulators of imposing “onerous, unprecedented and indefensible” forecasting requirements.
It suggests in various submissions to UtiliCom that the reasons for the onerous rules are that the control of system frequency in the Darwin Katherine grid is too slow for a power system of its size.
“The shortcomings of this type of control system require so much inertia as to make it difficult to accommodate renewables and unfortunately the renewables are then unreasonably curtailed, including through the application of onerous, unprecedented and indefensible forecasting requirements,” it says.
ENI has already built a 5.7MVA/2.9 MWh battery energy storage system at the Katherine solar farm, but under the strict new bidding rules imposed by PWC that wouldn’t be nearly enough.
It estimates it would need 20MW/10MWh of battery to support its 45MW of solar installations, or an upfront cost of $20 million plus maintenance and round trip losses. And it’s furious that these new rules apply to its projects that were either complete or under construction before the change.
“EAL (ENI) has strong concerns about the economic and technical inefficiency of the proposed GPS… (but) our main concern is that already sanctioned and committed projects are not being grandfathered, without justification,” it writes.
“This precedent would create a degree of regulatory risk which will significantly raise the cost of capital for new renewable energy investment in the NT, a form of energy generation that relies on a low cost of capital, thereby creating an additional unnecessary barrier to market entry.”
ENI further notes that it is not the job of individual solar farms and their GPS to ensure a power system has adequate supply of capacity, energy or storage going forward.
“If a shortfall of capacity, for example, presents itself in the DKIS, it is the proper task of government policy to provide the right market or structural incentives to fix,” it says.
“Using technical regulations to solve perceived failures or shortcomings of commercial or market arrangements sets a very dangerous precedent.”
As Utilicom points out, the problems are magnified by the nature of the Darwin-Katherine grid – relatively small, and dependent on a long stringy line.
“In some power systems the growth of asynchronous generation has been so fast that the market and or market rules have not adapted to avoid the risks to system security and reliability from such rapid growth,” Utilicom points out.
“For the Territory’s power systems, which are small, isolated, lacking in diversity of renewable energy technologies and without appropriate supporting frameworks, the challenges and opportunities are likely greater and certainly immediate in terms of needing urgent attention to protect the long‑term interests of Territory electricity consumers.”
But the lament is that leadership is lacking, and bar some exceptions, the talent pool is shallow.
“The four solar farms are the first new generators to be connected to the grid for nearly 20 years,” says one observer. “The corporate memory of how it is done is not there. They are focusing only on the short term. They are trying to keep the lights on but the network is held together with duck tape.”
And, following the recent blackout in Alice Springs and the subsequent resignations of the territory’s two most senior energy executives illustrates, everyone is risk adverse.
Darwin Big Battery won’t be big enough
There is some movement. The territory government finally responded to pleas of energy experts and is conducting a tender for a 30MW big battery to be located in or near Darwin.
But the experts say it won’t be anywhere near big enough to solve the problems at hand, and its primary focus will be to simply allow one less gas turbine to spin as back-up.
In a statement to RenewEconomy, minister for renewables and energy Eva Lawler said: “The Territory Labor Government continues to invest in delivering affordable, clean, reliable and stable energy for Territorians and these solar power stations will contribute to the Territory’s 50% renewables energy target.
“The solar power stations at Katherine and Manton, and one of the Batchelor power stations are connected to the power grid and have been energised. Each are now progressing through the final stages of commissioning and compliance testing to ensure each power station operates in a safe, stable and predictable manner.
“The connection of the second Batchelor solar farm is imminent, after which commissioning and compliance testing will commence.”
On the delay in market reform, Lawler said:
“Since the report the Darwin-Katherine System Plan is well progressed, along with our Alice Springs Future Grid project. These will clearly set out Government’s pathway to 50% renewables by 2030.
“Earlier this year we released our draft policy position and consultation papers on priority electricity market reforms – which will address system security, reliability and efficiency; encouraging private investment and maximising the amount of renewable power in our network. These papers should be finalised later this year.”
It will be interesting to watch. Some observers fear the dispatch restrictions may mean the solar farms will be able to send little power to the grid, if they do manage to complete compliance testing.
Langworthy says there are real fears that a major blackout could affect the Darwin-Katherine grid, such is the lamentable state of the system.
The Utilicom report highlights the weaknesses in the system, including regular and multiple trips of the gas generators. But, of course, if the lights go out, the finger will inevitably be pointed to renewables.
Langworthy says the Roadmap to Renewables Report five years ago spelt out how renewables would provide “downward pressure on the cost of electricity” and it provided a clear set of key actions to be taken by Government to achieve it. But it seems it has fallen on deaf ears.