South Australian Renewables Contribute To Negative Electricity Prices In Middle Of Day

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Of all the Australian states, the part of Australia we call South has the most wind and solar capacity per person. Wind power generates electricity equal to about a third of the state’s total consumption and rooftop solar generates about 6%. We don’t have utility-scale solar on account of how we don’t do that sort of thing here. It would require government support and that is not likely to happen. All up, South Australia gets about 40% of its electricity from wind and solar. We would get power from hydroelectricity as well, except to a first approximation we don’t have any. That would require rainfall and land that isn’t as flat as a biscuit.

The Coalition Government has been pretty successful in scaring off anyone who might be interested in further expanding wind power anywhere in Australia by putting our Renewable Energy Target up for “review” which is code for “We’re going to get you and your little dog too.” However, they have been unable to stop the expansion of rooftop solar and South Australia should have over 560 megawatts of it by now. That’s about 330 watts per person, which is very good by world standards, and it is definitely having an effect on electricity supply and wholesale prices.

On Tuesday the 30th of September, South Australia managed to go most of the working day with enough electricity generated by wind and solar to meet all demand, and electricity prices went negative for a considerable period that morning. Now, I wasn’t in South Australia when that happened, I was in Queensland which is the pointy bit of Australia on the upper right. But fortunately it is no longer difficult to find examples of renewable energy supplying all electricity use and I grabbed this 30-minute “Demand and Price” graph from the Australian Electricity Market Operator’s site at 12:43 on Saturday.

AEMO 1243 18 Oct 2014

The graph has the wholesale electricity price in tenths of a cent per kilowatt-hour on the left and grid electricity demand in megawatts on the right. Time runs along the bottom but you need to add half an hour to that to get South Australian time which is what I’ll be using in this article. To the left of the black vertical line which appears two-thirds of the way through the graph is what happened and to the right of it is what was predicted. The red line shows wholesale prices and when that goes negative it’s a sure sign that renewables are generating more than enough electricity to meet the state’s total demand.

As you can see, demand doesn’t form a duck shaped graph here but rather a foothill in the morning followed by a mountain in the late afternoon and evening and then late at night the mountain gives us the finger. The finger is when our off-peak hot water systems all turn on at once and often results in the highest peak of the day. (Yes, I know we’re not very bright. I am aware of that.)

Grid demand started off very low at 5 a.m. but soon increased as people woke up and started to cook breakfast, cows were plugged into electric milk sucking machines, and bakers eagerly shoved their thick sticky dough into hot ovens. But then, at about 9:15 or so, demand for grid electricity started to fall. This was not because people were using less electricity but because production from rooftop solar was increasing and this doesn’t show up as grid demand but subtracts from it. By about 11:30 grid demand was lower than it had been in the wee hours of the morning making almost the middle of the day our new off-peak time. At 12:00 rooftop solar would have been providing about 28% of the state’s total electricity use. The weather in Adelaide, South Australia’s only major population center, was quite beautiful in the morning but grew warmer as the day progressed and increasing air conditioner use would account for rising grid demand from about 11:20.

Looking at wholesale electricity prices, or technically the Regional Reference Price, we see that soon after I woke up it rapidly fell and briefly went negative. However, I did not cause that. Rather it was the state’s only operating coal power plant, the Northern Power Station, which was responsible. It is not a modern, flexible coal power plant and so they don’t like turning it off unless they absolutely have to and the surplus electricity it produced caused prices to go negative. After all, it wasn’t as if they had to pay a carbon price on the coal they burned, so one 260 megawatt unit would have been chugging away at 60% capacity producing electricity equal to about 11% of the state’s total use at the time. In addition, because of fossil fuel’s unreliability, a unit of the gas-fired Torrens Power Station would also have been working at about 25% of capacity to provide spinning reserve in case the coal plant went off line. The excess power would normally be exported, but presumably renewables also had electricity to export and the transmission capacity became saturated causing prices to go negative to discourage anyone from generating more.

After the initial drop to -0.5 cents a kilowatt-hour, electricity prices jumped back up to the not at all high level of over one cent a kilowatt-hour but soon fell back down to -0.3 cents a kilowatt-hour and stayed there for an hour or so. I probably don’t need to tell you how much fossil fuel plants hate negative prices in the middle of the day, which used to be a prime money-making time, for not only is the electricity they produce worth less than nothing, they still have to pay for fuel costs and wear and tear. While negative prices in the past occasionally happened in the early hours of the morning when electricity use was low and wind was high, the state’s expanded wind and solar capacity combined with a grumpy old coal power plant mean they are now happening for prolonged periods in the middle of the day.

While other Australian states don’t have nearly as much wind capacity, rooftop solar is expanding across the nation and pushing down wholesale electricity prices everywhere, which is bad news for incumbent fossil fuel generators. What is currently happening in South Australia is only a taste of the future, because across the whole nation rooftop solar is the cheapest source of electricity for Australian households and small businesses and our Coal-ition government does not have the power to stop it, they can only at best delay it. And since delay will, stochastically speaking at least, kill people, it is something I am quite resolutely against.

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