Australian Energy Regulator approves ElectraNet $166m condensers to stabilise grid
Renewable energy’s variability needs managing to ensure the grid is stable. A $166m investment aims to do exactly that and shave a few dollars off your bills too.
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The electricity system in South Australia will be strengthened by a $166 million investment in new equipment.
A plan by transmission company ElectraNet to invest in special machines which act as shock absorbers to fluctuations in the grid will receive regulatory approval on Tuesday.
“This is a positive step forward in strengthening SA’s electricity network to accommodate the increase in renewable energy entering our electricity grid,” ElectraNet chief executive Steve Masters said.
SA households are expected save $3 to $5 a year from the project, ElectraNet estimates.
The project involves installing synchronous condensers — large machines which spin freely and which can absorb or produce reactive power to stabilise and strengthen the system.
The Australian Energy Regulator assessed and approved the proposal.
“Consumers pay for network investments for years to come and it is our job to ensure they pay no more than they need,” regulator chair Paula Conboy said.
“But investment is required to maintain safe and secure supply.
“This investment will help strengthen the electricity system in SA, and reduce the amount SA consumers are required to pay as a result of market directions.”
ElectraNet’s proposal followed a formal declaration of a gap in system strength that had to be addressed.
In an old-fashioned electricity grid, thermal power stations drive large turbines which all spin in sync and have considerable inertia.
Renewable energy sources have great variability, requiring stabilisation management.
The regulator agreed to increase the revenue ElectraNet can charge customers by $32 million over the next three years.
However, a net benefit to customers is expected because the Australian Energy Market Operator will have less need to force generators to turn on — saving $22 million a year in compensation payments.
ElectraNet will also no longer need to buy some other grid-strengthening equipment, saving a further one-off $16 million.
The condensers will be installed in Port Augusta at Davenport, the site of the former coal-fired power station, by mid-2020 and at Robertstown in the Mid North by the end of 2020.
The condensers are expected to have a life of 40 years with their ongoing value to be assessed in future revenue applications by ElectraNet after 202.