Victoria solar farm owners losing $1 million a day from grid constraints

The owners of five solar farms in Victoria and NSW that have had their output cut in half because of system strength issues say they have not yet been told when the issue will be resolved, and collectively are losing more than $1 million a day in lost revenue.

The restrictions imposed on four of Victoria’s large-scale solar farms in mid-September – Karadoc, Bannerton, Wemen and Gannawarra – has taken 150MW of solar capacity out of the system. A similar restraint on the Broken Hill solar farm has removed another 25MW.

Based on recent prices in Victoria and NSW, that equates to more than $1 million of lost revenue per day from the five solar projects, and is creating tension with contractors, off-takers and financiers.

Developers did not wish to go on the record, for fear of rocking the boat with regulatory authorities, but say they have no idea when the solar farms will be allowed to resume full production.

AEMO has said it is looking for solutions by fine-tuning the inverters, but this requires extensive testing and complex modelling. What was expected to take several weeks has now dragged on for more than three months.

The system strength issues were discovered by AEMO during another modelling series several months ago, including a “what-if” scenario should problems emerge in various transmission lines. The modelling revealed that in those cases, dubbed contingencies, there was the potential for “oscillations” that could put system security at risk.

AEMO has since warned that other new projects hoping to be connected to the grid could face added costs and further delays until a new impact assessment is completed. Those looking to connect would have to undertake complex and costly modelling.

“All projects at the commissioning stage will be re-assessed for any contribution to voltage oscillations and to reconfirm compliance with performance standards before progressing further,” AEMO said in late September.

As RenewEconomy reported on Tuesday, AEMO has now declared a “fault shortfall” in the region. This is an important announcement as it means that the local networks are now considered responsible for ensuring system strength is maintained, and puts the onus on them – working in conjunction with AEMO and the regulator – to find a solution.

A similar declaration was made in South Australia two years ago. In response, ElectraNet is installing four “synchronous condensers” in key parts of the grid to ensure that many of the growing (20GW and more) of large-scale wind, solar and storage projects can go ahead.

By doing the same for Victoria, AEMO can now ensure that “syncons” – or even “grid forming” batteries – are located in parts of the network that are needed most, rather than the ad-hoc and costly installations that have become a feature of the “do no harm” rule dreamed up by the market rule-maker.

This rule has been widely criticised by energy experts and transmission companies, who say the ad-hoc nature of the installations may be doing more harm to the grid than good, a fact now acknowledged by AEMO.

Meanwhile, longer term solutions are being sought – first with a grid upgrade that is now underway in western Victoria, and also with a proposal for either further upgrades, or new transmission links from Victoria to NSW that could unlock some 8GW of wind and solar projects in Victoria, and another 20GW in NSW.