Rooftop Solar Changing South Australia’s Energy Market

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This article was originally published on RenewEconomy:

Rooftop solar continues to have a dramatic impact on the energy market in South Australia – the Australian state with the highest penetration of rooftop solar.

As these graphs provided by Melbourne Energy Institute’s Mike Sandiford illustrate, the proliferation of solar PV is not just having an impact on overall demand in the state, it is also shaving and reshaping the peak demand curves.

The impact of solar PV in South Australia was recognised by a special study by the Australian Energy Market Operator last August. As we reported then, South Australia had some 267MW of rooftop solar as at June 30, representing one in five households. AEMO said rooftop solar was accounting for 2.4 per cent of overall demand, and more than one-third of the PV systems were operating at the time of peak demand at any one time.

These graphs deliver a further illustration of their impact, as they illustrate what happened in the latest months of December and January, traditionally the period of hottest temperatures and highest demand. (If the graphs are not easy to read we suggest you click on them to see them better).

The ones immediately below show the average demand curves in South Australia over the last five years. The pink line shows 2012/13. As Sandiford points out, midday demand in SA this summer is down 15 per cent on where it was five years ago, even though night-time demand is up, confirming the impact of solar PV.

“Overall, total demand is down about 3 per cent over the same interval,” Sandiford says. “I am betting all the pundits would have been expecting it to rise more than 10 per cent over that interval.” This accords with the AEMO estimates.

The following graphs, below, show the peak demand for the summer months. As AEMO noted last year, the peak demand times in the state are usually around 3pm and 4pm. The pink line shows that solar PV has been able to reduce those peaks, to the extent that the peak has now shifted to a smaller peak around 5pm, reducing the need for costly infrastructure and expensive gas peakers.

This is despite the increasing use of air conditioning, which is reflected on the graph on the right, showing that overall demand has increased around 5pm to 6pm compared to previous years.

As Sandiford notes from these latest graphs: The profile is becoming both more skewed to peak in the very late afternoon, but topping out at lower levels than one might have expected from non daylight hour demand.” He estimates that solar PV has shaved between 5 and 10 per cent off the peaks in South Australia.

There are now smaller peaks in the morning and the evening, which might suit gas-fired generators, but not coal generators. In any case, the shift has probably removed the need for around 150MW of peaking power plant. As UBS noted last week, the impending surge in battery storage will reduce the morning and evening peaks too.

As Sandiford has noted previously, and as UBS concluded in the case of Europe, the proliferation of solar PV is having a dramatic impact on the economics of existing generators. In fact, it is causing a revolution in the energy market – and this is without the impact of wind, which in South Australia has already exceed 20 per cent of supply.

In South Australia, the state’s only two coal-fired generators have been put in mothballs, with the Playford plant closed indefinitely, and the Northern plant opening only during the months of highest demand. These latest graphs may question whether that was worthwhile.

But what would happen in the future? Sandiford has extrapolated the deployment of solar PV in the last five years and assumed that would continue over the next five. The results are amazing – the blue line is the key, it basically turns the midday peak into an off-peak period, taking a massive chunk in revenue from the generators who rely on spikes in demand, and the accompanying pricing spikes, to break even.

Given this impact, one would wonder what that does to the plan by utilities to introduce time-of-use pricing to encourage a shift in demand from the peaks to other times of the day. It would seem that the peak has already been shifted.

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Giles Parkinson

is the founding editor of, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.

Giles Parkinson has 596 posts and counting. See all posts by Giles Parkinson

16 thoughts on “Rooftop Solar Changing South Australia’s Energy Market

  • The only way we can stop the rising cost of electricity is to do what Germany is doing now impose an “energy solidarity tax” for grid connected solar power homes.

    • Energy solidarity tax sound like a good idea on grid connected solar power home; at some point SA government will have to do it, as the state revenue if falling not only in SA but in the state of QLD, NSW, WA & VIC. I’ve noticed that GST revenue has also fallen and in order that maintain the national grid Energy solidarity tax must apply now.

      • Or alternatively, we could do nothing as subdued consumer spending and flat housing prices and the gradual deflating of our housing bubble are setting the stage for a more prosperous economy in the future. But there are good arguements for increasing the tax base in a few years, so I’d suggest a new tax for vehicles on a sliding scale based on their CO2 emissions. Even if this change was revenue neutral it would still save money as a result of decreased medical costs resulting from decreased pollution.

    • I’m more than happy to pay solidarity tax on my grid tied rooftop solar system, I think it logic to do so, in the last five years I have not payed any thing towards the maintenances of the grid as the feed in tariff covered all the cost, even payed off my 10kw solar system, with $87,360 over five years profit with no tax.

      • That’s very generous of you, Noreen, but I’ll mention that your feed-in tariffs are set to expire and then you will be paying for any grid electricity you use. And thanks for getting the ball rolling with a 10 kilowatt system 5 years ago. Most people just went for a 1 or 1.5 kilowatt system back then because of the expense.

        • Ronald, Solidarity TAX
          I’m well aware of that too, still a number of years to go, my system paid for it self, even if I don’t get paid the feed in tariff I still can pay a solidarity solar power energy tax at the current rate of electricity price. I believe that I should pay something to maintain the national grid also, and the solidarity tax is a very good idea.

    • Actually rooftop solar pushes down the price of wholesale electricity and so decreases the cost of electricity for everyone. Depending on retailer this saving has been passed onto consumers in South Australia, the Australian state with the most wind and solar capacity. AGL cut their standing rates by 9.1% at the start of this year. So electricity prices can fall for everyone as a result of rooftop solar without introducing new taxes.

      • But solidarity tax on solar power will work to drive cost down, we all know that the feed in tariff & REC added to the cost of electricity by a good percent across the states, it’s about more fair system that helps those with out solar power to lower their cost on the electricity account.

      • Solidarity tax is a good German policy for Australian grid solar power; nationally people with grid solar power don’t pay a cent in exporting their grid solar energy with out transmission fee, so solidarity tax addresses this issues, our current power provider’s have to pay a fee and should be the same rules for grid solar power when exporting power back to the grid.

  • Time of using pricing would still be better for the industry as it would further smooth out the early morning curve and the late afternoon/early evening curves – and it would encourage people to cover the west facing roof with PV too! It’s also better for the individual as if everyone pays what they cost rather than splitting that peak cost along the entire day, people will learn to shift time variable loads to off peak times and lower the overall peak, thereby lowering the total cost of generation and lowering cost for everyone!

    “and more than one-third of the PV systems were operating at the time of peak demand at any one time.” => Grammar?

    “further illustration of their impact, as they illustrate” => WC

    “per cent” => “percent”

  • I’m wondering when someone will get around to explaining just what an energy solidarity tax is. So far Jonny, Dale, Jack, Noreen, Kate, and Linda all seem to be in favour of one and I have to say it’s very lucky that they all found each other on this comment thread, as it’s quite possible that they are the only people in Australia who know what it is.

    • yes, and quite frankly, they write in such a similar way that i can’t remember who wrote what!

      • You think someone might have an empty sock drawer?

    • Been reading up on “Energy Solidarity Tax” is a new tax, Federal Government tax, a tax to bring in lost revenues in Europe, in this case grid solar power.

  • You don’t necessarily need batteries to cut the evening peak. What is needed is thermal storage using a two tank system and a heat pump. Tank 1 hot water or where appropriate a swimming pool, tank 2 cold water or slush ice with a heat pump taking heat out of the cold tank and dumping it in the hot tank – excess heat or cold can be dumped to air depending on season. With stored hot water, there is no need for PV equipped homes to heat water with grid power, and the slush ice can meet cooling load 24/7 with just a small circulation pump and a few low power fans.

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