Solar saved southern states from new and costly demand peaks  

ReNew Economy has a pair of articles looking at the benefits provided by solar power during the recent heatwave in southern Australia - Solar saved southern states from new and costly demand peaks.

Victoria and South Australia have just finished a week which put the highest stress on the electricity grid since a similar heatwave occurred on 28th-30th January 2009. Despite the population of Victoria and South Australia increasing at least 7%2 since then, the electricity demand supplied by the grid during the heat wave was just lower than the peak usage reached on the 29th of Jan 2009.

Electricity demand from the grid in the recent heatwave peaked on Wednesday. There were initially warnings of potential load shedding1 from the grid operator after the usually baseload Loy Yang A3 brown coal unit and one of the Torrens Island gas units tripped offline on Tuesday. However, demand came in slightly lower than forecast and apart from some minor local transmission outages, demand was fully supplied. ...

If no solar had been installed, Victoria would have set a new demand record of 10,675MW at 1:55pm today 17th-Jan-2014, higher than the metered demand of 10,572MW used at 12:35pm on the 29th-Jan-2009. South Australia would have set a new demand record of 3,549MW at 4:30pm yesterday 16th-Jan-2014, higher than the metered demand of 3,441MW set 4:25pm on the 29th-Jan-2009. Solar reduced the maximum combined VIC & SA demand by 448MW.

Asking what happens when the sun doesn’t shine and the wind doesn’t blow ignores the spare capacity built into the grid to handle record demand days like yesterday and today. For the majority of the year, spare generation capacity can backup variations in solar or sudden failures at fossil fuel plants. Record demands, where there is little spare capacity, are caused by hot conditions and strong sunlight. Solar is now a critical component of the generation fleet that reliably supplies our power.

There seems no doubt that solar is playing a key role in moderating demand and stress on the grid.

It’s interesting to note that the differences between the peaks of previous years – such as in 2009 when there was little solar – correspond with the amount of solar that has been installed (notwithstanding the need to add in population and air-con growth, offset by more energy efficient appliances and less manufacturing).

On Wednesday, for instance, the interval peaks were 10,110 MW in Victoria and 3,108MW in SA. The corresponding numbers on January 29, 2009, were 10,446 MW and 3,270 MW. According to the APVI’s Live Solar website, the PV contribution at the peak times was around 220 MW in each state. Some suggest that without solar, Victoria would have hit record demand from the grid on Thursday – and prices to boot.

In WA, the peak in electricity demand has fallen well short of previous years, despite the record-breaking streak of temperatures, rising population and growing use of air conditioning.

In 2011 and 2012, peak demand peaked at more than 4,000GW. In the past week, it made it only as high as 3,733. How much solar does WA have on its rooftops? About 340MW.

This has had an impact on peak pricing events. In 2009, the average spot price between 8am and 4pm was over $6,000/MWh. The average price – despite a few peaks – in the latest period has been about one tenth of that.

On Thursday, the volume weighted pool prices between 08.00 and 16.00 yesterday were $299/MWh in Victoria and $377/MWh in South Australia, despite the huge levels of demand. The reaching of super peaks of $12,000/MWh or more in Victoria occurred mostly when Loy Yang A – the biggest brown coal generator – had one of its four units off-line for urgent repairs .

Generators and retailers use elaborate hedging policies to reduce their exposure to such fluctuations – which can be triggered as much by bidding tactics and other factors as much as weather – but the fact remains that a large revenue pool has been evaporated by the impact of solar.

In the same way that one third of the network costs are to cater for about 100 hours of peak demand a year, generators source a huge amount of their annual revenue from similar events. The problem for many coal generators is that they grew to rely on these peak pricing events to boost their revenue, and inflate their values. Solar eats into those revenues whenever they produce – because the output comes during the day-time period, when prices are normally higher.