Published on September 3rd, 2013 | by Giles Parkinson3
South Australia To Reach 50% Renewables Within A Decade
Originally published on RenewEconomy.
(Republishing of this article is not permitted without the consent of RenewEconomy.)
Already, one in five houses in South Australia has rooftop solar PV, and a new AEMO document predicts this could treble by 2022. With wind already supplying 27% of power, and new wind farms coming on, the state will likely have 50% of wind and solar within 10 years.
The state of South Australia is emerging as one the leading regions in the world in the take-up of variable renewable energy sources such as wind energy and rooftop solar PV, and could be the first industrial economy to reach 50 per cent variable renewable generation.
According to figures included in a report by the Australian Energy Market Operator, that could happen well within a decade. That would make it the most advanced industrialised economy in the world in the adoption of variable renewables.
In a special report on the state released late last week, AEMO noted that 31 per cent of the state’s energy consumption was met by wind and solar in 2012/13, with more than 1,250MW of large scale wind farms, and a further 400MW of solar PV installed on one out of every five homes in the state.
In all, wind accounted for 27 per cent of generation in 2012/13. (See graph below – this data is an upgrade on an earlier report that showed wind generation accounted for 24.5 per cent of the state’s generation in the past year). Rooftop solar – which enjoys the highest penetration in the country in South Australia – accounted for 3.7 per cent of the state’s generation in the past year.
Over the coming decade, AEMO says the amount of rooftop solar PV could treble, rising to 1,205MW by 2022, under its fast growth scenario. That would likely mean one out of every two houses having rooftop solar in 10 years, depending on the population growth and the take-up by commercial and industrial users.
As AEMO notes, rooftop solar provided negligible levels of electricity as recently as 2008/09, but continued increases in energy prices and decreasing costs of imported solar panels will allow payback periods to remain in the 5-to-7 year period – despite a reduction in the feed-in tariff – and will encourage more deployment.
The growth in wind generation is not forecast. But AEMO says 1,250MW has already been installed, and 270MW is currently being built under the Snowtown developments. This would likely lift South Australia’s wind contribution to around 33 per cent. And, there is nearly 3000MW of announced projects waiting in the wings for contracts and finance.
Just one or two projects of similar size to Snowtown would likely take the state close to 50 per cent. But even if they were not built, the high rooftop solar adoption rates would mean rooftop solar could well be contributing nearly 12 per cent by 2022.
The addition of a few more wind farms would take the contribution of wind and solar well over 50 per cent, perhaps 60 per cent or more. The rate that those wind farms are built will likely depend on the future of the Renewable Energy Target under a Coalition government.
When it happens, it would make South Australia the most advanced industrialised economy in the world in the adoption of variable renewables, and a test case for the incorporation of such energy sources into a broader grid. Denmark may be its closest rival, aiming for 50 per cent (mostly wind) by 2020. Even Germany has a target of 35 per cent by 2020. California has a target of 33 per cent by 2020, which it expects to comfortably exceed, and may lift this to 40-50 per cent by 2030.
AEMO notes that the changing patterns of energy consumption – driven largely by the take-up of rooftop solar, but also by energy efficiency measures and as a response to rising prices – means that electricity consumption from the grid is unlikely to grow at all in the coming 10 years.
In fact, AEMO now expects it to decline by 0.1 per cent each year out to 2022, meaning that for the first time, long term planning will revolve around a shrinking rather than a growing market.
That should mean little new investment in grid infrastructure, apart from upgrades of old equipment. Indeed, in its latest regulatory filings, the SA grid operator has cancelled virtually all its planned extensions, for savings of around $167 million, according to data provided by the Australian Energy Regulator.
As the graph above illustrates, the biggest change is and will be in the residential and commercial consumption – both of which will be influenced by the amount of PV they put on rooftops. Per capita consumption has already fallen by a third. The green line above is based around the medium forecast for rooftop solar, so the impact could be even greater in a high deployment scenario.
This new demand dynamic is also changing the nature of the grid operations, AEMO notes. Baseload generators are used less often and wind and solar and reduced demand have their impact on the generation mix. The Playford B coal fired power station was not switched on at all, the Northern coal fired power station is now used less than half the time, and most gas generators, apart from one or two “intermediate” leakers, have also recorded lower capacity factors.