Last week, the debate about Australia’s energy future became about as hot as the temperatures that the eastern states sweated through.
In a week that included homes in South Australia going without power, the Federal Treasurer brandishing a lump of coal in Parliament and much of Australia becoming the hottest places on Earth its important that we highlight some of the key facts we know.
1Parts of South Australia went black because electricity market failed to respond to calls for more electricity supply
AEMO realised on Wednesday afternoon that it did not have enough generation capacity lined up to meet supply later in the evening. In recognising this, AEMO issued a “Lack of Reserve” notice to the market, asking on generators to review their offers, with an aim of ensuring that demand would be met.
In periods of high demand, these notices can be issued fairly frequently. For the most part, generators will review their bids, offer more supply and the market ticks on knowing that there is a healthy buffer, with extra generation waiting in reserve.
On Wednesday afternoon, however, not enough capacity was offered by power stations in response to the call out from AEMO.
By the time that AEMO realised it was short and it wasn’t able to source additional supply from the market, and it made the decision that any operator fears; it decided to cut supply from tens of thousands of households in South Australia.
2A gas power station didn’t generate because there was no “commercial rationale” to do so
A lot of attention has been concentrated on the Pelican Point gas fired power station and its role in the South Australian situation. It quickly emerged during the aftermath of 40,000 homes and businesses losing power that a generating unit at the Pelican Point sat idle.
Debate centred on way it was not called upon to meet the generation shortfall, and who was responsible. Fingers were variously pointed at State and Federal Ministers as well as the market operator AEMO.
The owner of Pelican Point, ENGIE, released an explanation. In normal circumstances, there was no “commercial rationale” to operate the power station and therefore ENGIE had no contracts in place to supply gas to the power station. As they weren’t able to guarantee the supply of gas, the market rules forbid them from offering capacity to the market.
The underlying reason for Pelican Point’s absence from the market in a time of need appears to be gas prices that are simply too expensive. It’s an interesting revelation given the calls for more gas generation to provide backup capacity.
3Rooftop solar helped to squash the worst demand peaks
One of the under appreciated benefits of solar power is that on hot days, when demand for electricity is high as people crank up air conditioning units, is that solar output is also very high. It makes sense, sunny days make us hot, as well as allowing us to generate more solar power.
Data from the APVI Live map shows that rooftop solar kept demand from the National Electricity Market (NEM) lower throughout the day. In fact, demand in the NEM would have peaked several hours earlier than it did in South Australia everyday last week, if rooftop solar hadn’t been has high as it was.
4NSW ended up in a worse situation than South Australia
The focus, rightly so, has been on what happened in South Australia last Wednesday. 40,000 customers were shunted off the grid in the middle of the evening peak on a very hot evening. This is a worst-case scenario for all involved in the electricity market.
However, what happened in NSW on Friday went unnoticed and was arguably worse from a system planning perspective.
For several hours on Friday afternoon, NSW experienced its own load shedding event. Up to 310 Megawatts of load was pushed off the grid, triple the amount of that in South Australia. The difference being that AEMO was able to direct the Tomago Aluminium smelter to stop operations and considerably reduce its demand.
This meant that the NSW load shedding didn’t impact on households, but did take a major industrial plant offline for several hours.
5This wasn’t a state of emergency, in fact, we should plan for it to happen again
In the wake of homes losing power in South Australia, politicians were out in force, to seize a moment in what has already been a highly politicised topic for quite a long time.
Speaking to ABC’s 7.30 program, shadow Minister for Climate Change and Energy Mark Butler made an interesting point about the impacts of global warming. 7.30 host Stan Grant pressed Mr Butler on whether last week in South Australia constituted an emergency event in the following exchange:
STAN GRANT: Could I just ask you though, there is a role for the state government too, isn’t there? That an emergency can be declared where the state government can direct the operator to turn on, in this case, Pelican Point, to turn on the other power station?
MARK BUTLER: That’s right.
STAN GRANT: Why wasn’t that done?
MARK BUTLER: Well, in a state of emergency, that is a power the state government has but this was not a state of emergency. This was a heatwave which happens all the time.
Higher temperature extremes and more frequent heatwaves have been consistent predictions of the impacts of global warming on the Australian environment. While the events of last week are certainly cause for concern, we should be preparing for repeat events in the future.