Heatwave challenges energy grid
A severe heatwave along the east coast has put Australia’s electricity grid on edge.
A severe heatwave along the east coast has put Australia’s electricity grid on edge with volatile prices and demand while bushfires in South Australia piled pressure on the local transmission network.
Temperatures soared near 40 degrees in Victoria and South Australia on Monday putting the Australian Energy Market Operator on alert over the amount of capacity available in the system.
An uncontrolled bushfire in the Adelaide Hills led to the trip of several transmission lines connecting into the Cherry Gardens substation in the Adelaide Hills on Sunday night.
That led the grid operator to increase an alert over a lack of available reserves, later cancelled as conditions eased, while wholesale prices seesawed from more than $10,000 per megawatt hour on Sunday evening to -$143/MwH by mid-morning on Monday.
Searing heat in Victoria had also raised questions over the amount of supply available a month after a coal unit outage in NSW increased the potential for power blackouts during heatwaves this summer.
However, increased renewable capacity and the availability of most of the nation’s coal fleet mean the grid has so far handled its first major test of the summer with AEMO not requiring any extra reserves it keeps on hand.
A cool change in Victoria on Monday afternoon led to a rapid reversal of high demand forecasts with temperatures dropping more than 10 degrees in less than an hour leading to demand plummeting by more than 1500 megawatts on earlier estimates.
“Demand ended up being enormously different than forecast, with a cool change arriving sooner than had been forecast beforehand,” said Paul McArdle at consultancy GlobalRoam.
Sydney is expected to experience its hottest day of the year on Tuesday with temperatures beyond 40 degrees although the public holiday may see power demand lower than during a normal working day.
AEMO, which runs the power grid, said in late November conditions for summer were looking favourable with a big jump in renewable capacity available, an expected reduction in maximum demand and generator outages completed before Christmas.
Still, risks to the national power grid have grown from an outage at AGL Energy‘s Liddell coal plant although the broader outlook for reliable supply over summer remains unchanged, AEMO said on December 18.
An Energy Security Board report this month found the entry of renewables has pushed down prices and dramatically cut emissions, but a failure to deal with the entry of intermittent supply could cost the nation in the long term. The ESB said the security of power supply to the east coast market remained its “most concerning issue”.
The report on the health of the national electricity market showed the market operator was forced to intervene at record rates in 2019-20, highlighting the ongoing fragility of the system.
AEMO issued more than 250 directions — up from 158 the previous year — to energy generators and users to keep the lights on in a year when temperatures soared and bushfires raged across eastern Australia, knocking out transmission lines and putting generators under pressure.
Coal, which currently provides 70 per cent of electricity, will contribute less than a third of supply by 2040 and could be forced out earlier than planned retirement dates as competition from renewables and carbon constraints render plants uneconomic, AEMO forecasts show.
By 2035 nearly 90 per cent of power demand could be met by renewable generation during periods through the day. However, that will require up to 50 gigawatts of large-scale solar and wind to be added under the most aggressive plan to cut emissions, representing nearly all the current capacity of the market to be built in just two decades.
Up to 19 gigawatts of firmed dispatchable resources such as gas, pumped hydro and batteries will be required in the next two decades to back up renewables in Australia, forecasts show.