Can one day make or break an energy source?

By Michael Mazengarb on 20 January 2014

Can just one day make or break an energy source? According to several media reports, including from both The Australian and the Australian Financial Review; 15 January 2014 was the day renewable energy failed Australia.

However, analysis of the National Electricity Market may suggest that its woes are in fact indicative of a volatile electricity market that would exist without renewable energy.

Last week saw one of the most intense heatwaves to hit the Southern states of Australia over the last few years. Notably, this heatwave was experienced, with almost equal intensity, simultaneously in Victoria and South Australia.

As one would expect, in the midst of a heatwave, people seek out a means of relief from the heat. The ubiquitous solution used in Australia is the loyal air conditioner.

In a case of unfortunate timing, as the nation sweltered last Wednesday, the heatwave in South Australia and Victoria coincided with a period of low wind in the those states. Wind turbines met just 11 per cent of the South Australia’s power demand on that day, while it will often deliver around triple that on better days.

In Victoria, wind dipped to just 1.4 per cent of demand, while regularly providing more than 5 per cent on a good day.

Was this unusual? Not at all. Wind is a variable supply of energy. Even the most ardent supporter of renewable energy doesn’t deny this. The National Electricity Market can accommodate such fluctuations through good planning and considered design.

Putting the fact that brown coal behemoth Loy Yang had a quarter of it’s capacity go offline in the midst of the heatwave peak aside (because, of course, the supply of base load generation from coal is apparently infallible), one must ask what impact did the reduced availability of wind really have?

With what some members of the press asserted, one would expect that fossil fuels would sweep in as the electricity sector’s White Knight, with its “stable and reliable” supply to keep our air conditioners blowing and beer fridges cold.

However, a stable market is far from what was observed. With fossil fuel generators left on their own to satisfy our energy demands on Wednesday, the average daily price in South Australia surged to $555, a vast increase compared to the 2013 daily average of just $69.06.

Intraday volatility in electricity prices was also significantly worse.  Those who observed the market closely would have observed, during the hottest part of the day, prices in South Australia and Victoria bouncing between the NEM price ceiling ($13,100/MWh) and floor (-$1000/MWh) with regularity.

In the following two days, the 16th and 17th, the wind returned. With the heat remaining as high as it had in the days prior, price spikes continued to occur. However, with wind farms providing additional supply, these spikes were less extreme and occurred far less frequently.

The average NEM price on those days following also fell from its windless peak. NEM prices in both South Australia and Victoria fell by a factor of four between the 15th and 17th; Price volatility fell by a comparable factor, yet temperatures were just as high.

So, what can we take away from the performance of the NEM last week?

When we become completely reliant on fossil fuel generators, we experience higher wholesale electricity prices.

When we become completely reliant on fossil fuel generators, we experience significantly higher levels of volatility in the electricity market.

Wind, despite its variable nature, seemingly has a calming effect on the market. It’s supply keeps the market in check, prices low and predictable

To add to this effective defence of renewable energy in our electricity mix, it is possible to point out that the spike in Victorian demand was also partially met by imported hydro generation from Tasmania, with the Basslink interconnector between the two states running at capacity during the heatwave.

Likewise, it is obvious to point out in times of heatwaves; the potential for solar PV and solar thermal technologies to directly meet increased electricity demand is high. Wind, solar and hydro generators are all a perfect complement to each other, and we are already reliant on them to keep wholesale electricity prices low and stable.

More investment and support in their deployment is likely to provide further benefits to consumers, and electricity market participants alike.

It is important to remember the National Electricity Market is a complex beast. With network constraints and interconnector capacities adding another level of complexity to the task of balancing demand with supply, it’s too simplistic to point to what occurred in one state on one given day, and then make an assessment about the performance of a particular technology.

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The Laws Of Physics Not Consciously Aware of Human Behaviour, Reports The Australian

Quote:
More at the link, including interesting graphs and commentary.

If heatwaves are what we are most worried about, it would seem that an energy source that comes to its fore with hot weather would be ideal.

Solar. Particularly solar thermal ?

An analysis from one of the wind power sites. It's interesting how the energy market works. We can forecast pretty well when the wind is likely to blow and the sun to shine. The failure of a large fossil fuelled generator is a different matter. The mere presence of low-cost renewables forces down the average price of energy, it seems.

What really happened with wind power in the heatwave?

Posted by Andrew Bray on January 24, 2014

Much of the discussion about the performance of wind energy during the recent heatwave over South Australia and Victoria misunderstood what happened.

First, the facts.

One of the four large 550 megawatt units at coal-fired Loy Yang A failed unexpectedly on Tuesday afternoon. It was out of action for all of Wednesday and didn’t return until Thursday morning.

As the grid is designed to do, other plants were ready to fill this gap immediately and did so.

We’ve all heard the myth that wind farms need extra backup in the system. In fact, the grid has massive amounts of backup power continually on standby for emergency breakdowns just like this one at coal and gas-fired stations.

The South Australian grid has not needed any extra backup, even with wind power supplying 25% of total demand.

There was a lull in wind on Wednesday afternoon, which by contrast with the Loy Yang outage, was accurately forecast over 24 hours earlier and replacement generation was scheduled accordingly.

By Thursday and Friday the wind was blowing again, with wind producing 22% and 25% of South Australia’s energy on those days. This reduced the need to run super-expensive gas-fired peaking plants and the wholesale price of electricity came down dramatically.

On Wednesday in Victoria, with the Loy Yang unit completely out and only a small amount of wind power, the average wholesale price was a whopping $497/MWh. On Thursday with more wind power and Loy Yang back it was $195/MWh. On Friday, with more wind power again, the price was down to $109/MWh.

When the wind is blowing, the wholesale price of electricity drops, which feeds through to household power bills. The more wind farms we have operating the greater the drop in wholesale prices.