Record low power from grid as solar soars and gas fills gaps

South Australia has recorded an all-time low in demand from the national electricity grid as household solar power saw consumers generating their own energy.

• Nearly a third of SA homes using solar power

South Australia has recorded an all-time low in demand from the national electricity grid as household solar power saw consumers generating their own energy.

The low came as SA’s wholesale electricity prices were a touch cheaper than in Victoria in the final quarter of last year, according to the Australian Energy Market Operator.

The record low demand on the grid of 599MW was set at 1pm on Sunday, October 21, and compares to a workday average at that time of about 1500MW.

Nearly a third of homes — 226,000 of the 780,000 residential electricity customers — in SA now have solar installed, according to SA Power Networks.

Nearly a third of SA homes have solar panels installed.

Grattan Institute energy fellow Guy Dundas said the trend of lower demand would continue and people were asking “how low can it go”.

The trend was putting pressure on the overall market with more intervention needed to retain stability, he said.

Structural change in the electricity market is affecting major investment decisions by business as well as households.

On Monday, AGL took delivery of the first of a suite of engines for its Barker Inlet Power Station on Torrens Island.

The $295 million investment will replace the ageing Torrens Island Power Station A with a gas plant that can be fired up in five minutes when needed and which is as powerful as a A380 jet at takeoff.

An artist’s impression of the new Barker Inlet Power Station on Torrens Island, set against the old site (top of image) Picture: SA Government

“This will be a high efficiency plant which is a good fit for the SA market and will efficiently and cost-effectively complement the high renewable energy mix we see today and expect to continue to see in the future,” AGL executive Colin Mills said.

“The project demonstrates our support for an orderly transition to a carbon-constrained future by helping phase out some of the old generation.”

The plant will consume far less gas to generate the same amount of energy which AGL expects will help cut costs for consumers.

At a household level, falling costs of solar power and concern about grid prices has driven homeowners to act with rooftop power capacity 21 per cent higher at the end of 2018 than it was at the end of 2017.

Across Australia, there are more than two million homes with solar photovoltaic power installed.

AGL executive Colin Mills and SA Energy Minister Dan van Holst Pellekaan in front of the first of twelve engines delivered to the new Barker Inlet Power Station. Picture: AAP/Mark Brake

Energy and Mining Minister Dan van Holst Pellekaan said the growth of solar power highlighted why grid and home storage options - such as the home battery scheme - were needed.

The average wholesale price of $96.40/MWh in SA was just better than Victoria which recorded a $96.47/MWh average.

The lower wholesale price will not necessarily mean a lower bill from retailers for households.

Mr Dundas said network costs were higher in SA because it was “sparser and skinnier” than Victoria.

Wholesale costs only account for about a third to half of a consumer’s annual electricity bill and most customers are on contracts with prices based on amount used not wholesale price changes.