UNSW Co-op student: Electricity grid should be diverse

19 February 2014

Wind power, like all other sources of generation, is sold on the National Electricity Market (NEM), facilitated by the Australian Energy Market Operator (AEMO).

The NEM interconnects New South Wales, Queensland, Victoria, South Australia and Tasmania allowing electricity from all sources; coal, gas, wind, solar and hydro, to flow between states depending on price and demand.

The interconnected grid allows us to have a diverse range of generation from multiple sources.

This was especially important during the mid-January heatwave experience by South Australia and Victoria, as energy from interstate could supply the states with higher demand. Wind power is variable in nature purely because wind speeds vary. It is a well-known fact.

Despite this, AEMO can accurately predict wind speeds and thus wind generation at least 24 hours in advance, with accuracy improving as you get closer in time to the interval you are forecasting.

During the southern heat wave critics focused on a small section of the week where output of NEM wide wind generation was quite low, this was, however, forecast in advance.

As Mr Lyons stated, electricity prices soared to more than $13,000 per megawatt-hour (MWh) due to high electricity demand and a shortfall of supply.

This was not due to the lull in wind, but rather due to the unscheduled and unforecasted failure of AGL’s Loy Yang (a brown coal) power plant.

“Dr Napthine said the problem was exacerbated on Wednesday by one of the four generators at Loy Yang A power station breaking down, and the Bass link cable between the mainland and Tasmania not operating at full capacity for technical reasons.” (The Age January 16 2014)

On 15 January 2014, Victoria and South Australia both experienced below average wind generation and the market saw a large amount of volatility, with prices fluctuating between $13,100/MWh (the market’s price ceiling) and -$1000/MWh (the market’s floor).

The following days’ wind speeds picked up and contributed between 20 to 25 per cent of total generation in South Australia.

What is interesting to note, however, is as wind speeds increased over 16 and 17 January, despite temperatures being just as high, (with the peak demand actually occurring on 16 January) prices and volatility fell by a factor of four. Average price for the NEM was $497/MWh on 15 January, once wind generation picked up the price fell to $195/MWh on 16 January and then to $109/MWh on 17 January.

Further to Mr Lyons’ letter, regarding wind turbines’ inability to reduce carbon dioxide emissions, I would like to draw your attention to the case of South Australia, the state with the largest amount of wind penetration.

Installed wind capacity is now at 27 per cent of total installed generation and in the year 2012/2013 wind contributed 25 per cent of South Australia’s annual electricity demand.

In the last five years wind capacity has increased from 742 MW to 1,203 MW. If what Mr Lyons is saying is true, we should have seen a large increase in the installed capacity of gas-fired generators to provide spinning reserve as back up to these windfarms during this time.

This, however, is not the case as South Australia has not had any new build gas-fired power stations since 2006.

Furthermore, in South Australia, greenhouse gas emissions, from the energy industry, have fallen by 40 per cent since 2008/09 levels, from eight to five megatonnes of carbon dioxide equivalent in 2012/13.

What we learn from this, is when the grid becomes completely reliant on fossil fuels, the market experiences higher volatility and electricity prices.

Fossil fuel power stations are not infallible and in fact cause greater harm when an unexpected outage occurs.

Wind, despite its variable nature, keeps prices low and predictable.

It is clear to see from this heat wave, there is potential for further installation in solar power (photovoltaics or solar thermal) due to the relationship between solar output and demand in high temperature and sunshine conditions.

No one is suggesting we have a grid system made up purely of wind generation. We need a varied mix of renewable energy technologies to diversify the electricity grid, complementing each other to keep the market calm, prices low and reduce carbon dioxide emissions to our air.

By Catherine O’Neill, Renewable Energy Engineering student, UNSW
In response to Mr Lyons’ letter in The Wellington Times on 11 February 2014
This letter appeared in The Wellington Times on 19 Feb 2014