Increased Risk to South Australia’s Electricity Reliability

by Energy Action | Dec 15, 2015
A report by Deloitte Access Economics says South Australia faces higher electricity prices and increased reliability risk from being at the leading edge of integrating intermittent renewable energy into the grid.

The report titled Energy markets and the implications of renewables – South Australian case study was commissioned by the Energy Supply Association of Australia and released 26 November 2015.

South Australia’s renewable resources are in the form of wind and the sun. Resources described as “intermittent” i.e., they are only available when the wind is blowing or the sun is shining.

The Deloitte report says whilst there are other regions that have more intermittent renewables, there are strong interconnection to neighbouring regions which facilitate the import or export of electricity equivalent to their peak demand. By contrast, South Australia’s interconnection with Victoria is equivalent to only about 23 per cent of its peak demand.

It is the intermittent nature of this renewable electricity that creates challenges for systems and markets that were designed around dispatchable plant such as hydro, fossil fuels and nuclear. These conventional plant types also have characteristics that allow them to contribute to the stability of the grid, including keeping frequency levels consistent and being able to restart the system after a major blackout. Solar is not designed to contribute in this way, and while wind can (in limited circumstances) assist, its intermittency constrains its use for grid stability the report states.

Deloitte says that with further intermittent renewable investment likely, higher prices are expected in SA as the market price will be increasingly set by higher cost generation, such as gas-fired power plants.

The Deloitte report found there are a number of areas that require further investigation, namely:

The net market benefits of further electricity interconnection upgrades between Victoria and SA;

Estimating the saturation point of both rooftop solar, wind and large-scale solar in isolation and in combination;

Understanding the implications of network constraints outside of South Australia that may be affecting the ability to transport wind energy out of the state;

Investigating if there is a case for a new market in capacity, noting that this would entail a fundamental change in market demand; and

Investigating the scope for efficient demand response that could allow a portion of demand to follow supply rather than vice versa, noting this would be a long-term development.

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