Wind, solar push South Australia prices below zero for almost six hours

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Update: South Australia electricity prices go negative for nearly six hours as wind and solar account for all of demand, and fall below zero on second day.

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A combination of strong output from the state’s wind farms and its growing solar resources, coupled with low demand, pushed wholesale electricity prices in South Australia into negative territory for nearly six hours on Tuesday and for more half hour intervals on Wednesday.

The major negative pricing event came as the combination of large scale wind and utility-scale solar, along with the output from the 1GW of rooftop solar, contributed more than 85 per cent of the state’s generation for the whole period of negative pricing on Tuesday.

For most of the time the output from wind and solar covered more than 100 per cent of demand, which – being a mild, Autumn day – was relatively low.

The negative pricing began at 1030 (NEM time which is 10am local time), and continued until 4pm.  Prices fell as low as minus $120/MWh and might have been even lower were it not for some charging from the Tesla battery at the Hornsdale Power Reserve and the smaller Dalrymple battery (both of whom were effectively being paid to charge).

From 11am to just before 4pm, the combination of utility-scale wind/PV covered all the local load, with the Pelican Point and Torrens Island gas turbines forced on by the Australian Energy Market Operator to provide synchronous generation for system strength.

Energy analysts also suggested that the negative pricing was also a result of limits placed on exports from the state due to maintenance work on the main interconnector. AEMO confirmed that a 50MW limit was in place on Tuesday and Wednesday and works will continue this week.

On Wednesday, prices hit minus $92/MWh in the 1130 interval and remaining around zero or below for at least another three hours as renewables again accounted for all, or nearly all, state demand. (We will update throughout the day).

One prominent battery energy executive noted in a LinkedIn post that this was “a taste of what’s to come” in the industry.

“(We are) going to see more events like this in the power system (which really isn’t a surprise for those that have followed it), and with the great encouragement continuing from the Australian Energy Market Operator (AEMO)” he said. 

“We will see more market incentives to monetise this for VPPs (virtual power plants), fast acting renewables, and dynamic EV charging. Exciting times in the industry!”

South Australia currently meets more than 50 per cent of its local demand through wind and solar, and this is expected to jump quickly to around 70 per cent by 2021, and possibly the equivalent of 100 per cent by 2026.

This will be driven by increases in both wind and large scale solar generation, and also the continued uptake of rooftop solar, which AEMO has said may in of itself match total demand at certain times in coming years.

For this reason, more batteries are being installed, various pumped hydro projects are being studied, and domestic based VPPs – such as AGL’s and the one proposed by Tesla, along with other schemes, are being pursued. AEMO is also keen for a new link to be built to NSW.

Update: It now appears that the two biggest solar farms in the state switched off on Wednesday as the prices fell into negative territory due to “zero price” clauses in their contracts. Click here to find our latest report.

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