South Australia power grid costing millions of dollars to ensure stable supply of electricity

SOUTH Australia’s fragile power grid is costing tens of millions of dollars extra because gas generators are being forced to stay online to ensure the state has a stable supply of electricity.

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SOUTH Australia’s fragile power grid is costing tens of millions of dollars extra because gas generators are being forced to stay online to ensure the state has a stable supply of electricity.

A new report also reveals the national grid risked not having enough power to meet demand more than 50 times in the past year.

The same threat occurred less than 15 times the year before.

The first Health of the National Electricity Market Report from the Energy Security Board found that while the grid “is not out of intensive care yet”, the situation was improving.

A key concern raised in the report was ensuring the grid could cope with the fluctuations in renewable generation — which are caused by the wind slackening and less sunlight.

The issue was particularly pronounced in SA where renewable energy was, at times, meeting the total demand for power in the state.

New constraints had been introduced in SA to ensure enough stable generation remains online to provide the necessary system strength — previously provided by default through gas and coal generators.

The report states such interventions had been a “rarity” but were becoming more commonplace in SA.

“The constraints, now required for system security, are estimated to be costing tens of millions of dollars,” the report revealed.

“With time and further evolution of the system in a disorderly way, these inefficiencies will continue to grow.

“This is especially relevant given the high volume of new generation connections currently in train, all of it renewable.”

SA Energy Minister Tom Koutsantonis said the report showed the grid operator had been more proactive in managing the system since it cut power to 90,000 homes in February rather than ensure available generation was switched on.

“More stability services naturally have a cost, however new renewable energy projects rolling out in SA will add additional competition and lower residential bills by much more - $280 over the next two years according to the independent Australian Energy Market Commission,” he said.

“That shows our energy plan is working.”

The Advertiser revealed in October gas generators were being regularly told to remain or switch on. This report shows the call was made 10 times in 2016/17.

It also found an “unprecedented increase” in the number of notices issued to the market when the grid operator was concerned there may not be enough power to meet demand.

These notices reflected the tight supply-demand balance primarily in SA.

“The only other year where there were a higher number of notices was 2008-09, a year of severe drought,” the report stated.

“Events such as coincidental high demand, dispatchable plant failures and higher levels of variable renewable energy pose challenges for reliability.”

The Australian Energy Market Operator has found extra power reserve to help avoid such a situation this summer. In SA, this was through companies agreeing to use less power in time of high demand.

The SA Government also hired diesel generators and supported the construction of the country’s biggest battery to prevent blackouts.

Federal Energy Minister Josh Frydenberg said the report found there was much work to be done but new measures put in place by the Coalition had improved the situation.

“Earlier this year, the Coalition agreed, with the states and territories, to 49 of the 50 Finkel Review recommendations to improve the reliability of the NEM following the SA blackout,” he said.

“Work is also progressing on the National Energy Guarantee, which the report notes is one of the most important measures underway to improve the affordability and reliability of the market.

“The Government has already taken action to ensure sufficient gas supply is available to the Australian market, with the ACCC recently confirming that Australia is no longer facing a shortfall of gas supply in 2018 on expected demand.”