This last week has seen extraordinary events in South Australia’s energy market make front page headlines nation-wide. In an unprecedented move, South Australian business and energy leaders demanded the re-start of a moth-balled power station to provide relief from suging and variable wholesale energy prices… and the Minister complied.
As reported in the Australian Financial Review, prices in the state have been “frequently surging above $1000 a MWh this month and at one point… hitting the $14000MWh maximum price”. The Australian Financial Review reports that average monthly prices have been three to four times higher than in the eastern states during the month of July and new contract prices in South Australia are nearly double the prices in the eastern states.
Image from Energetics.
Let’s be clear: the South Australian electricity supply is the cleanest it has ever been and it is the most vulnerable, volatile and fragile than any time in recent history with no signs of relief in the short-term. As much as many people, including me, want the former (clean power), we are shooting ourselves and our wishes in the head if we keep contributing to the latter. There are few worse advertisements for clean energy than the current market in South Australia. Short-sighted over-development of variable generation without compensatory planning and policy has driven consequences that were entirely foreseeable. Suggestions that the renewable sector is now merely a “scapegoat” for our problems are absurd, stemming from an ideology of nil criticism for some technologies. While those sectors are not alone in the frame as contributing to this problem, the Pollyanna group-think that insists that no line can ever be drawn to the obvious shortcomings of variable generators is starting to positively stink.
Around 12 months ago we published our paper Beyond wind. Since that time I have observed nearly everything we flagged coming true only faster than I anticipated, with the biggest surprise being that we did stand by as reliable generators left the market rather than coughing up to keep them in the game.
I have re-produced an extract of this paper below. As you can see both we and the sources we cite were paying attention to problems in the pipeline. These problems were foreseeable and foreseen. Maybe we just needed more pain to make us pay attention.
Since 2003, the contribution of wind power to electricity generation in South Australia has grown to around 27 % of total annual electricity supplied to the State (Australian Energy Market Operator Ltd. 2014b). This increased wind generation has come mainly at the expense of generation from existing coal and gas generators which are now run less frequently (Australian Energy Market Operator Ltd. 2014b). Yet despite the rapid increase in wind-generated electricity in the State, South Australia still depends on participation in the National Electricity Market for a reliable supply of electricity.