The operation of a relatively isolated, high intermittent generation grid in South Australia is revealing new challenges about how we will need to manage these systems in the future. To date seven impacts or risks have been identified from this evolving system:
The energy industry has been investigating some of the potential ramifications and challenges of these new operating conditions. The Australian Energy Council has commissioned three reports from independent expert analysts that look at different aspects of electricity supply in South Australia. We have also written a covering paper that brings all the analysis together and proposes areas for further investigation.
In December 2015 Deloitte reported to the Energy Supply Association of Australia on the consequences of deteriorating returns for conventional generation in increased intermittent generation systems. Deloitte warned that South Australia may have insufficient capacity to meet peak demand events, although this was prior to the reversal of planned mothballing of gas fired capacity. It also observed that market conditions in South Australia did not support investment in new flexible gas fired generation.
In September 2016 ACIL Allen was commissioned by the Australian Energy Council to explore a range of possible solutions to improve power quality in South Australia. They found that some proposed interconnector options could be effective in addressing a range of technical issues, but they are either very expensive or have long lead times, or both. A combination of lower cost options to procure incremental inertia, frequency and voltage control and additional dispatchable capacity could collectively provide a quicker outcome. The challenge would be to do so without undermining overall investment signals.
Figure 1: Solutions to high renewable integration in South Australia, ACIL Allen 2016 (View larger version of the diagram)
In July 2016 EnergyQuest examined the impact of natural gas supply on South Australian electricity generators, given the importance of gas as a fuel for reliable electricity supply in South Australia. They found that the South Australian gas market could be short by 2019, as the result of a growing domestic supply gap in the southern states over the next decade. This does not necessarily preclude gas being available to back-up intermittent renewables but it would imply high gas prices and difficulty in contracting more generally.
Figure 2: South Australian gas supply and demand PJ/annum
Source: AEMO, EnergyQuest: 2015 numbers are actuals
Further matters for investigation
Matters for investigation include:
Ultimately, these potential enhancements to the energy market and regulatory settings will still need to be underpinned by an enduring (i.e, bipartisan), stable and integrated climate and energy policy framework.
The Consumer Energy Resources Roadmap has just been endorsed by Energy and Climate Change Ministers. It is considered by government to be the next big reform for the energy system and important to achieving the AEMO’s Integrated System Plan (ISP). Energy Minister, Chris Bowen, recognises the key will be “making sure that those consumers who have solar panels or a battery or an electric vehicle are able to get maximum benefit out of it for themselves and also for the grid”. There’s no doubt that will be important; equally there is no doubt that it is not simple to achieve, nor a certainty. With the grid intended to serve customers, not the other way around, customer interests will need to be front and centre as the roadmap is rolled out. We take a look.
Australia is no stranger to ambitious climate policies. In 2022, the Labor party campaigned on transitioning Australia’s grid to 82 per cent renewable energy by 2030, and earlier this year, Prime Minister Anthony Albanese unveiled the Future Made in Australia agenda, a project which aims to create new jobs and opportunities as we move towards a net zero future. While these policies have unveiled a raft of opportunities, they have also highlighted a major problem: a lack of skilled workers. Why is this a problem? We take a closer look.
While Australia is seeking to support a domestic solar industry through policy measures one constant question is how Australia can hope to compete with China? Australia currently manufactures around one per cent of the solar panels installed across the country. Recent reports and analysis highlight the scale of the challenge in trying to develop homegrown solar manufacturing, as does the example of the US, which has been looking to support its own capabilities while introducing measures to also restrict Chinese imports. We take a look.
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