Summer tends to make us think about electricity — it’s hot, we’re cranking the air-con and we’re slightly nervous about the bills we’ll be tearing open in three months. We’ve got electrons at the front of our mind.
An article was published on Tuesday the 19th of January, in the South Australian outlet InDaily, entitled “Crunching the numbers on SA’s high electricity prices”. The author, Richard Blandy, is actually pretty experienced and well-credentialed, but the article makes some odd errors and misrepresentations.
The thrust of the piece is simply that SA’s wind power is causing high prices. To demonstrate how unambiguous his claim is:
“It is clear that South Australia has the most expensive and most variable power on the eastern states grid. The reason for the high (and extremely variable) price of electricity in South Australia is our very high dependence on solar and wind generation compared with the other states. This results from the rapid expansion of renewable energy generation in South Australia”
It’s very safe to say that the premise is wrong. He assumes South Australian prices are high, and then assumes that’s caused by more dispatch of expensive, ‘rapid-response’ generators (to make up for variations in wind output).
This is something you’re going to see a lot of, this year: cherry-picked numbers that serve to confirm a belief that already exists, and is immune to evidence. ‘Number-crunching’, I guess.
First, a simple chart. AEMO publish historical price data, by state, going back to the inception of the National Electricity Market in the late 90s. I can also extract the percentage contribution of wind farms to SA’s fuel mix, by financial year (it’s publicly available here).
Comparing the two:
So, no, SA’s wholesale electricity price isn’t being driven up by the increasing penetration of wind (retail prices aren’t being driven up by renewable energy, either). So what about the examples he presents?
“On Christmas Day, according to the average price tables published by the Australian Energy Market Operator (AEMO), the Regional Reference Price (average spot price) for a megawatt hour of electricity in South Australia was $91.67. The corresponding prices in New South Wales, Victoria and Queensland were $37.33, $20.38 and $36.20”
If we look at wholesale price by state over December, it’s pretty clear why Tasmania’s been excluded, and why he’s only chosen to present price data for Christmas day:
Tasmania’s electricity mix is mostly hydro — a dispatchable, zero-carbon technology that doesn’t vary output to the same degree as wind or solar. When you compare all the states on the NEM, the argument isn’t quite as dramatic.
“The average daily spot price for a megawatt hour of electricity in December 2015 was $62.19 in South Australia, $43.37 in New South Wales, $46.84 in Victoria and $42.08 in Queensland”
Sounds convincing, right? Except, if you look at average monthly wholesale price over the year, and include Tasmania, it’s not quite as crystal clear:
Winter was indeed a time of high price for SA, but was that due to wind farms? Considering the yearly analysis, I’d say probably not — the more likely cause is high demand. Which brings me to the next point:
“On December 17, the average spot price for a megawatt hour of electricity in South Australia was $259.59, while on December 26 it was only $5.06”
This is presumably presented as evidence SA experiences wild variations in price. But again, there’s a reason those single examples are chosen and presented without context — December 17th recorded SA’s highest demand in all of 2015–2,870 megawatts at 18:30 (it was amazingly hot — the second day on a four-day heatwave with temperatures above 40°C). December 26th recorded the lowest 2015 demand at 13:30, of 696 megawatts. High temperatures and holidays lead to extremes.
Wind power didn’t cause the extreme heat (despite what Fox News says); nor did it somehow result in the creation of the Boxing Day public holiday. Variations in price are linked to a broad array of factors, and South Australia’s December variance wasn’t caused by wind farms. If you do the same comparison of highs and low for November, the picture is very different:
Queensland has the lowest level of wind power in the eastern grid. Yet, in November, it had the largest disparity between maximum and minimum price. Widen your view, and simplifications crumble.
“Generators with the required flexibility (peaking generators using natural gas) produce expensive electricity, but are becoming more and more needed as the penetration of wind and solar in our energy generation mix increases. This is why electricity prices have risen in South Australia”
There’s a simply way to check part of this claim: has the introduction of wind power led an increase in the output of gas-fired generation, in South Australia?
Nope. Wind has increased, gas has slightly decreased (due partly to lower demand levels), and coal output has massively decreased. This is why total wholesale price hasn’t skyrocketed. If more expensive fuels comprised a greater slice of dispatch, then yes, wholesale price would be higher. But they don’t, and it isn’t.
“The yearly RET targets imply significant annual investment in wind farms, while the sale of certificates to retailers is designed to guarantee a return to wind farms sufficient to justify the required investment, irrespective of the return they receive from actually selling electricity to the market. Well done, wind farm lobby”
This is worth mentioning simply because Blandy implies here that the “wind farm lobby” is the architect of the Renewable Energy Target scheme. What?
The ‘Mandatory Renewable Energy Target’, introduced by the Howard government in 2001, probably wasn’t designed and implemented by a secretive and corrupt cabal of pro-wind turbine lobbyists, but look, I don’t really have a chart to debunk that one. Sorry.
There’s some discussion going on around grid stability, frequency control and interconnection that are worthwhile, but these discussion adhere to large-scale and long-term analysis. They’re actually useful contribution to the engineers and experts planning the future of the grid, and tackling the challenges of decarbonisation head on. Instead of penning complaints, they design systems to forecast wind and solar output.
There’s an underlying theme for all of these: if a thing happens in South Australia, it’s caused by wind farms. See: a power cut that happened last year, or headaches people have near a wind farm, or retail electricity prices in South Australia that are high.
Sun 1st Nov was lights out for 100,000 homes & we can expect more due to our reliance on interconnect & wind power pic.twitter.com/OkcQbGHmPY
— TodayTonightAdelaide (@TodayTonightSA) November 10, 2015
We’re stuck in a loop, here. There’s no public pressure to consider causality, because we all personally benefit from ignoring it. It’s also easy to criticise those making an active effort to decarbonise and update our generation technology. If someone’s climbing a hill, why wouldn’t you stand the bottom and pull them back?
It would be nice, though, to widen the spread of understanding, here. Just a little bit. It isn’t interesting or cool to pause and think about whether we’ve misattributed the cause of an event. It’s still dorky, which is sad.
Just something to keep in mind, yeah? You’re going to be reading at least five more articles like the one published this week. You’ve got electrons at the front of your mind. Keep an eye out for spurious causation.
If you want a copy of the raw data, or full-size images of the charts, go here
