Why Victoria might need to slow down renewable energy surge

Victoria has given the green light to 1.6 gigawatts of power from large-scale solar and wind projects over the last year, but there’s one crucial issue.

The Ararat wind farm.

The record influx of new renewable energy generators into Victoria’s power system may have to slow down to protect the stability of the grid, the energy market operator has warned.

Victoria has given the green light to 1.6 gigawatts of power from large-scale solar and wind projects over the last year, a record for any state, with another 16 gigawatts in the pipeline.

But in a new report, the market operator has highlighted the risks of this rapid change, and forecast delays to new connections or restrictions on the output of renewable generators.

Victoria’s growing reliance on rooftop solar saw the state smash records over the last year for minimum energy demand, which is now occurring during the day when solar panels are in use, rather than at night when people are asleep.

The market operator said minimum demand issues would be the biggest challenge over the next decade — rather than a lack of supply to keep up with demand — because the grid needed constant generators such as coal-fired power stations for stability and reliability.

In particular, it pointed to the surge of new renewables in Victoria’s west as a key test, as it enforced the need for $3.5bn in new transmission projects over the next decade to connect generators to the grid.

“Falling minimum demand is likely to lead to periods where renewable generation has to be constrained to ensure Victoria retains a minimum number of online synchronous generators,” the report said.

“It is likely that new generator investment will continue to test the system’s capabilities in weaker parts of the network, and new system constraints could emerge that result in delays to the connection process, or curtail the output of some renewable generators.”

While this change would be exacerbated by the early retirement of a coal-fired generator in the Latrobe Valley, the market operator noted the Star of the South project — Australia’s first offshore wind farm proposed off the coast of Gippsland — could fill the breach.

It would provide up to 20 per cent of the state’s power.

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