Posts Tagged ‘gas’
a glut of greed – on high gas prices and who’s to blame
Crisis? What crisis….?
So Australia’s industry minister Ed Husic has come out with a claim that I’ve heard from renewable energy journalists more than once before in recent times – that the gas industry is pocketing record profits while households suffer from record power costs. So what exactly is happening and how can it be fixed?
Husic’s remarks were blunt enough: ‘This is not a shortage of supply problem; this is a glut of greed problem that has to be basically short circuited and common sense prevail.” As I reported before, gas companies are more interested in exporting their product overseas, at great profit, than selling it domestically. All the major news outlets are reporting much the same thing – the political right, under conservative leader Dutton, is blaming the overly-rapid shift to renewables (he wants to open up more gas fields), and gas companies are playing the victim role.
The ACCC has been complaining for some time that there isn’t an effective mechanism to prevent gas companies from selling to the highest bidder, at the expense of the local market. There are, of course, worldwide gas shortages, causing the value of the commodity to shoot to record highs. The Financial Review reported on the situation back in July:
The ACCC says prices for east coast domestic gas that will be delivered in 2023 have rocketed to an average of $16 per gigajoule from $8 per gigajoule. Exporters have also dramatically widened the spread of prices offered to domestic buyers from between $7 and $8, to between $7 and as much as $25. This is despite the fact that the estimated forward cost of production is steady at just over $5.
The government clearly has little control over gas exporters – ‘gentlemen’s agreements’ aren’t really cutting it, and domestic costs are affecting businesses as well as households, adding to the many woes of local manufacturing. So I’ve turned to the ever-reliable Renew Economy website in the hope of hearing about plausible solutions. Their journalist Bruce Robertson, of the Institute for Energy Economics and Financial Analysis, is arguing for a gas reservation policy:
Such a policy on new and existing gas fields means gas companies must sell a portion of their gas into the domestic market – rather than putting it all out for export – with an immediate downward effect on prices. Similar to the reservation policy in place for over a decade in Western Australia, the east coast gas reservation policy could be set at $7 a gigajoule (GJ), a price allowing gas companies to achieve a profit over and above a return on investment. In turn, energy consumers would see their electricity bills cut.
It sounds like magic – like, if it’s that easy why wasn’t it done ages ago? The reason Robertson appears to be putting forward is price-fixing and the unwillingness of east coast governments, and the federal government, to deal with it:
In Australia, gas prices are fixed by a cartel of producers on the east coast… – Shell, Origin, Santos, Woodside and Exxon. For decades they have set the price above international parity prices.
It does seem, well, a little unseemly, that Australia, the world’s largest LNG exporter, is having to pay such exorbitant prices for domestic usage – though, in fact, other countries are suffering more. Locally though, South Australia, where I live, is particularly hard hit. Unlike the eastern states, coal plays no part in our energy mix – it’s all gas and renewables, with wind and solar playing a substantial part, more so than in the eastern states. And yet… Sophie Horvath reported in Renew Economy back in May:
A draft report from the SA Productivity Commission finds that despite the state’s solar and wind delivering some of Australia’s lowest wholesale spot prices, prices faced by the state’s consumers were around 20% higher than consumers in New South Wales. And it warns that without the rapid implementation of market and policy reforms, the situation for consumers will only get worse as more and more renewable energy capacity is added.
This sounds, on the face of it, as if SA’s take-up of renewables has backfired, but the situation is rather more complex, as Horvath explains. One problem is variable demand, which ‘produces challenges for the grid’, and another, highlighted by the SA Productivity Commission, is the ‘various market flaws that are stopping the benefits of renewables being passed through to consumers’.
So what are these market flaws? And what are ‘wholesale spot prices’ and why are they so different from the costs to suckers like us? Here’s an excerpt from a ‘Fact Sheet’ from the Australian Energy Market Commission about how the spot market works:
The National Electricity Market (NEM) facilitates the exchange of electricity between generators and retailers. All electricity supplied to the market is sold at the ‘spot’ price…. The NEM operates as a market where generators are paid for the electricity they produce and retailers pay for the electricity their customers consume. The electricity market works as a ‘spot’ market, where power supply and demand is matched instantaneously. The Australian Energy Market Operator (AEMO) co-ordinates this process.
The physical and financial markets for electricity are interlinked. Complex information technology systems underpin the operation of the NEM. The systems balance supply with demand in real time, select which generators are dispatched, determine the spot price, and in doing so, facilitate the financial settlement of the physical market. And all this is done to deliver electricity safely.
So far, this bureaucratic lingo doesn’t inspire confidence. Complex systems synchronise and balance everything, both financially and powerfully, ensuring our safety. Praise the lord. This Fact Sheet, from early in 2017, goes on for three and a bit pages, and I’m trying to understand it. Maybe Ed Kusic is too.
Meanwhile, back in South Australia, it was reported a few months ago that…
Tens of thousands of SA households are set to be hit with increased electricity bills after the energy industry watchdog made the ‘difficult decision’ to increase benchmark prices by hundreds of dollars a year.
So why indeed was this decision so ‘difficult’? The Australian Energy Regulator (AER – there are a headachy number of acronyms in this business), which sets the Default Market Offer (DMO) – a price cap on the charge to customers who, shockingly, don’t bother to shop around for a better deal – has increased the cap due to an 11.8% increase in wholesale electricity costs ‘driven by unplanned power plant outages and the ongoing war in Ukraine’. The fact that SA experienced massive power outages in the last 24 hours due to extreme weather conditions won’t help the situation. The Chair of the AER, Clare Savage, advises shopping around for cheaper deals rather than just accepting the DMO. The AEC (groan) also recommends shopping around, and even haggling for a better deal from retailers. The state government, in response to criticism from the opposition, emphasises focusing on the long-term and the ongoing shift to renewables. State energy minister Tom Koutsantonis expresses his faith – “Our government will reactivate investment in renewables as a hedge against price shocks on fossil fuels”.
Great – I can’t wait.
References
SA renewables surge bringing down energy prices, but consumers miss out
fracking hell
A very very brief piece in New Scientist back in August reported some research to the effect that hydraulic fracturing, aka fracking, is mostly responsible for a rise in atmospheric methane since 2008.
Having just spotted this today, I was somewhat shocked. I’ve heard news about fracking of course, and the damage report has grown – but it seemed to me mostly about local geological instability, overuse of water, and site pollution. So what’s the methane issue?
National Geographic reports on the same research (published in the journal Biogeosciences) here. Methane is a major greenhouse gas, of course, heating the atmosphere as much as eighty times the equivalent amount of carbon dioxide, but the question surely is – just how much methane does fracking release?
The NG article also mentions a 2015 NASA study that found a sharp rise in methane levels from 2006, growing by about 25 million tons per year. It calculated that at least half of this increase came from fossil fuels. These findings happen to coincide with the growth in the use of fracking technology from around that time. Most of the emissions come from shale gas – that’s mostly methane – operations in the USA and Canada. The article describes the process:
Fracking involves drilling an oil or gas well vertically and then horizontally into a shale formation. A mixture of highly pressurized water, chemicals, and sand is injected to create and prop open fissures, or pathways for the gas to flow
But as more has become known about fracking, opposition has grown. While most fracking is done in the USA and Canada, a number of US states have either banned the practice or are considering doing so. It’s banned in France and Germany, and has become a hot issue in Australia, with the ‘unconventional gas’ producers, mostly operating in Queensland, seeking to expand operations throughout much of northern Australia. The NT government decided to lift its moritorium on fracking in 2018 after a comprehensive enquiry claimed that fracking could be brought to safe levels if 135 recommendations were followed. The government promised to follow the recommendations, of course, but the process smells horribly of back-door dealing. And in the USA the Trump anti-administration is doing all it can to further the practise, auctioning off drilling rights in large swathes of land to oil and gas developers.
It seems to me that fracking is by its nature a short-term, stop-gap technology, which seeks to ferret out smaller and smaller reserves through applying more and more pressure, risking increasing damage to the environment, and to the health of local people exposed to under-reported leakages of the 650 or so chemicals used in the process, many of them well-recognised carcinogens. Australia’s Business Insider website has an article on the 10 scariest chemicals that have been used in hydraulic fracking. They are: methanol, BTEX compounds (benzene, toluene, xylene and ethylbenzene), diesel fuel, lead, hydrogen fluoride, naphthalene, sulphuric, crystalline silica, formaldehyde and ‘other unknown chemicals’. Now it’s likely true that any operations which employ chemicals would be found wanting under scrutiny, but it’s also true that the fracking industry, especially in the USA currently, operates under very little oversight, and will be seeking maximum benefit from a rogue regime. And it seems to me that some science-based organisations, such as the US Geological Survey, are minimising the damage and extolling the virtues, always pointing out that risks will be minimal ‘if proper practises are in place’. That’s an impossibly big ‘if’ when talking about the USA’s current dictatorship.
References
https://www.businessinsider.com.au/scary-chemicals-used-in-hydraulic-fracking-2012-3#methanol-1
reflections on base load, dispatchable energy and SA’s current situation
Canto: So now we’re going to explore base load. What I think it means is reliable, always available energy, usually from fossil fuel generators (coal oil gas), always on tap, to underpin all this soi-disant experimental energy from solar (but what about cloudy days, not to mention darkness, which is absence of light, which is waves of energy isn’t it?) and wind (which is obviously variable, from calm days to days so stormy that they might uproot wind turbines and send them flying into space, chopping up birds in the process).
Jacinta: Well we can’t think about base load without thinking about grids. Our favourite Wikipedia describes it as ‘the minimal level of demand on an electrical grid over a span of time’. So the idea is that you always need to cover that base, or you’ll be in trouble. And an electrical grid is a provision of electrical service to a particular community, be it a suburb, a city or a state.
Canto: Right, I think, and what I like about Wikipedia is the way it sticks it to the back-facing thinkers, for whom base load always means provision from traditional providers (coal oil gas).
Jacinta: Yes, let’s rub it in by quoting Wikipedia on this.
When the cheapest power was from large coal and nuclear plants which could not be turned up or down quickly, they were used to generate baseload, since it is constant, and they were called “baseload plants.” Large standby reserves were needed in case of sudden failure of one of these large plants. Unvarying power plants are no longer always the cheapest way to meet baseload. The grid now includes many wind turbines which have such low marginal costs that they can bid lower prices than coal or nuclear, so they can provide some of the baseload when the wind blows. Using wind turbines in areas with varying wind conditions, and supplementing them with solar in the day time, dispatchable generation and storage, handles the intermittency of individual wind sources.
Canto: So the times are a-changing with respect to costs and supply, especially as costs to the environment of fossil fuel supplies are at last being factored in, at least in some parts of the world. But let’s keep trying to clarify terms. What about dispatchable generation, and how does it relate to base load?
Jacinta: Well, intermittent power sources, such as wind and solar, are not dispatchable – unless there’s a way to store that energy. Some renewable energy sources, such as geothermal and biomass, are dispatchable, but they don’t figure too much in the mix at present. The key is in the word – these sources are able to be dispatched on demand, and have adjustable output which can be regulated in one way or another. But some sources are easier, and cheaper, to switch on and off than others. It’s much about timing; older generation coal-fired plants can take many hours to ‘fire up’, so their dispatchability, especially in times of crisis, is questionable. Hydroelectric and gas plants can respond much more quickly, and batteries, as we’ve seen, can respond in microseconds in times of crisis, providing a short-term fix until other sources come on stream. Of course, this takes us into the field of storage, which is a whole other can of – what’s the opposite of worms?
Canto: So this question of base load, this covering of ‘minimal’ but presumably essential level of demand, can be a problem for a national grid, but you can break that grid up presumably, going ‘off grid’, which I’m guessing means going off the national grid and either being totally independent as a household or creating a micro-grid consisting of some small community…
Jacinta: Yes and this would be the kind of ‘disruptive economy’ that causes nightmares for some governments, especially conservative ones, not to mention energy providers and retailers. But leaving aside micro-grids for now, this issue of dispatchability can be dealt with in a flexible way without relying on fossil fuels. Energy storage has proven value, perhaps especially with smaller grids or micro-grids, for example in maintaining flow for a particular enterprise. On the larger scale, I suppose the Snowy 2 hydro project will be a big boon?
Canto: 2000 megawatts of energy generation and 175 hours of storage says the online ‘brochure’. But the Renew Economy folks, who always talk about ‘so-called’ base load, are skeptical. They point to the enormous cost of the project, which could escalate, due, among other things, to the difficulties of tunnelling through rock of uncertain quality. They feel that government reports have over-hyped the project and significantly downplayed the value of alternatives, such as battery electric storage systems, which are modular and flexible rather than this massive one-off project which may be rendered irrelevant once completed.
Jacinta: So let’s relate this to the South Australian situation. We’re part of the national grid, or the National Energy Market (NEM), which covers SA and the eastern states. This includes generators, transformers (converting low voltage to high voltage for transport, and then converting back to low voltage for distribution), long distance transmission lines and shorter distance distribution lines. So that’s wholesale stuff, and it’s a market because different companies are involved in producing and maintaining the system – the grid, if you like.
Canto: I’ve heard it’s the world’s largest grid, in terms of area covered.
Jacinta: I don’t think so, but it depends on what metric you use. Anyway, it’s pretty big. South Australia has been criticised by the federal government for somehow harming the market with its renewables push. Also, it was claimed at least a year ago that SA had the highest electricity prices in the world. This may have been an exaggeration, but why are costs so high here? There are green levies on our bill, but I think they’re optional. Also, the electricity system was privatised in the late 90s, so the government has lost control of pricing. High-voltage transmission lines are owned by ElectraNet, part-owned by the Chinese government. The lower voltage distribution lines are operated by SA Power Networks, majority-owned by a Hong Kong company, and then there are the various private retailers. It’s hard to work out, amongst all this, why prices are so high here, but the closure of the Northern coal-fired power station in Port Augusta, which was relatively low cost and stable, meant a greater reliance on more expensive gas. Wind and solar have greater penetration into the SA network than elsewhere, but there’s still the intermittency problem. Various projects currently in the pipeline will hopefully provide more stability in the future, including a somewhat controversial interconnector between SA and NSW. Then there’s the retail side of things. Some retailers are also wholesalers. For instance AGL supplies 48% of the state’s retail customers and controls 42% of generation capacity. All in all, there’s a lack of competition, with only three companies competing for the retail market, which is a problem for pricing. At the same time, if competitors can be lured into the market, rather than being discouraged by monopoly behaviour, the high current prices should act as an incentive.
Jacinta: I don’t know about that, but before the Tesla battery came online the major gas generators – who are also retailers – were using their monopoly power to engage in price gouging at times of scarcity, to a degree that was truly incredible – more so in that it was entirely legal according to the ACCC and other market regulators. The whole sorry story is told here . So I’m hoping that’s now behind us, though I’m sure the executives of these companies will have earned fat bonuses for exploiting the situation while they could.
Canto: So prices to consumers in SA have peaked and are now going down?
Jacinta: Well the National Energy Market has suffered increased costs for the past couple of years, mainly due to the increased wholesale price of gas, on which SA is heavily reliant. It’s hard to get reliable current data on this online, but as of April this year the east coast gas prices were on their way down, but these prices fluctuate for all sorts of reasons. Of course the gas lobby contends that increased supply – more gas exploration etc – will solve the problem, while others want to go in the opposite direction and cut gas out of the South Australian market as much as possible. That’s unlikely to happen though, in the foreseeable, so we’re likely to be hostage to fluctuating gas prices, and a fair degree of monopoly pricing, for some time to come.
the ACCC, coal, renewables, arguments, and the future
Well as I watch my readership reduce to almost zero in its usual ups and downs I wonder whether to write just for myself or to attract a readership, so I’ll just go ahead and write, but I was amused to listen to Senator Matt Canavan, our Minister for Resources and a member of the Nationals, responding to the ACCC’s recommendations for bringing energy prices down. At one point he remarked ‘who cares where we get our fuel from?’, and compared the different fuel varieties to different types of ice-cream in a sweet shop. Presumably he was referring to encouraging an energy mix, but for someone who presumably knows something about resources, since he holds that portfolio (though that’s hardly ever proof of expertise in government), it struck me as bizarre. Who cares where we get our fuel from or what type it is? The Chinese government cares, for one. It has worked hard in recent years to combat pollution in Beijing, largely in response to adverse publicity. China’s capital, ranked as the fifth most polluted city in China in 2011, has since dropped out of the top twenty, largely due to the adoption of cleaner, greener energy and technology. Unfortunately, many other cities in China’s highly populated and industrialised north-western region still suffer from an environment which has reduced life expectancy there by some 5.5 years, according to a joint study by Chinese and American university teams in 2013. This sadly suggests that the Chinese government appears to be more concerned with its international image than with protecting its own citizens from hazardous emissions. On the bright side, Beijing’s improvement indicates what can be done to improve environments when governments and industry get their act together.
Just as oils aint oils, fuels aren’t just fuels. Remember kerosene? I remember huddling over a kerosene heater in the seventies, along with student housemates. But in other parts, kero isn’t a past-tense energy source. In many of the poorest countries, particularly in Africa, it’s used for lighting, even though it’s toxic, causes frequent burns and fires, and produces inferior light. It has proved difficult to wean consumers from kerosene in these countries, even though there are potentially cheaper options available. There’s an interesting article about the problems and possible solutions here.
But really, since energy generation (i.e. using x,y, or z as fuel) is the number one cause of air pollution and global warming emissions, it’s not like comparing caramel praline with black raspberry crunch. Coal is of course the worst in terms of emissions. As of 2016, some 44% of US electricity comes from coal, but it accounts for 80% of that country’s power plant carbon emissions. Australia has great reserves of coal, but it exports much of it to China and, more recently, South-East Asia. In fact Australia has experienced a recent boom in coal exports, earning a record $56.5 billion in 2017. Unsurprisingly many conservative pollies are clamouring for more coal mines and more local use of the resource as a solution to our seemingly ever-rising energy costs. Maybe we too can pull out of the Paris Agreement? Of course, our massive coal exports do tend to undermine that agreement, while the government can congratulate itself on keeping domestic use within more or less acceptable limits (see graph above). Currently, we’re the largest coal exporter and the third largest exporter of carbon pollution in the world, behind Saudi Arabia and Russia. But of course it’s not our fault that other countries want to pollute with our resources, is it? We just take the money and keep our country clean (as do Norway, Denmark and Indonesia).
So considering our dubious status in terms of global emissions (but, as many experts point out, it’s a little arrogant to expect developing and transitioning countries like China, our biggest coal customer, to rapidly abandon a fuel that the developed world has used for so long, thereby gaining ascendancy), it’s interesting to note that AGL, Australia’s largest owner of coal fired power stations and biggest emitter of carbon dioxide, is continuing its push away from coal in spite of government pressure. Of course the government itself is divided on this, with Turnbull and Frydenberg largely at odds with the Nationals on the question of transition, but looking into the future, it seems inevitable that demand for coal will decline – the only question is the rate of that decline, which of course depends on how quickly other nations move away from coal. All of those nations have signed the Paris Agreement. Already, coal ports such as Newcastle, and Australia’s mining regions, are looking to diversify, and energy experts are debating the pursuance of a coal tax to support the industry as it transitions.
But Canavan and the Nationals are having none of this. They point to the above-mentioned boom and a currently accelerating demand, though Canavan is realistic enough to admit that future forecasts are reliably unreliable. Much will depend on cost declines and advancing technology in renewables, as well as various political scenarios.
Naturally the renewable energy sector is looking critically at what one of its experts calls the ‘series of scattershot proposals’ by the ACCC on reducing our electricity costs. The ACCC’s recommendation that the small-scale renewable energy scheme (SRES), a subsidy which mainly applies to rooftop solar, should be wound down, is seen as unfair if not counter-productive by the sector. The SRES is already slated to be wound down by 2030, and its earlier abolition (by 2021, according to ACCC recommendations) would mainly affect low-income and rental householders. There’s currently a new boom in rooftop solar, with rising energy costs being the main cause. So penalising future adopters of rooftop solar seems an odd way to reduce the problems they’re adopting solar to avoid. As to the possibility of new gas- or coal-fired power plants, a dream of the Nationals and renegade ultra-conservative Tony Abbott, that’s unlikely, considering changing public attitudes and the reasonable likelihood of a change of federal government by next year. The good thing about the ACCC’s analysis is that the behaviour of retailers, and the phenomenon of price gouging, have finally been criticised, and the idea of states writing down the value of their networks has been floated. Consumers shouldn’t have to bear the burden of extra energy infrastructure and errors in predicting future energy demand.
There have been many interesting responses to the report, to say the least. Danny Price, a leading analyst of the national energy market over three decades, regards the report as overly political in that it shies away from criticising the lack of a much-needed bipartisan approach to energy policy. Confusion and ideological squabbling over carbon pricing – the disastrous scrapping by the Abbott government of a carefully formulated carbon tax being the low point – has been a disincentive to major investment, and banks here are refusing to finance new coal-fired power stations, which would only be built via massive government subsidies. Consequently we’ve seen an upsurge in interest in renewables from consumers and business, which also reflects worldwide growth, with major oil companies like BP joining the fray.
Of course the problem of reliable back-up power remains, and analyst Ian Verrender has criticised the ACCC report for omitting his best solution – gas. Gas turbines are more flexible than coal generators as well as producing fewer emissions. Australia is a major exporter of gas, but our companies have been providing little for domestic consumption, a situation which was only partly remedied by recent federal intervention. Yet the Nationals are more interested in coal than gas, in spite of its many problems, and its inefficiencies in providing precise back-up supply. Gas, hydro and batteries are far more efficient in this respect.
A recent study by the Australian Energy Market Operator (AEMO) has also backed renewables (though apparently the current federal government isn’t listening). It has released its Integrated Systems Plan, reported on here by Giles Parkinson:
Based on its “neutral” scenario, which comprises existing federal and state government policies, the lowest cost replacement [for retiring coal-fired suppliers] will be solar (28GW), wind (10.5GW) and storage (17GW and 90GWh). Just 500MW of flexible gas plant will be needed, and no new coal. It says this portfolio in total can produce 90TWh (net) of energy per annum, more than offsetting the energy lost from retiring coal fired generation.
AEMO has also highlighted the need for new transmission infrastructure, as transformative and disruptive energy developments continue around the country. The need for forward planning should be obvious and governments – especially the federal government – ignore this at their peril. A change of federal government may be the answer, but only if the incoming government has a thorough-going plan to integrate and manage this clear and obvious national move away from fossil fuels. Such plans are already being drawn up – we just need the will, and some bipartisan support, to implement them.
South Australia and electricity revisited
Canto: So what’s the latest on SA’s statewide blackout of September 28 last year, who’s to blame, who’s blaming who, and what solutions are in the offing, if any?
Jacinta: Well the preliminary report on the NEM, which we’ve been reading and writing about, has a few things to say about this, and they’re based on the findings of the Australian Energy Market Operator (AEMO) in its own preliminary report.
Canto: He said she said.
Jacinta: Well maybe sort of. So the SA blackout is presented as a case study. Here in SA we have a very high proportion of VRE (variable renewable energy) generation – one of the highest in the world. Our peak demand as a region is 3300 MW, and our supply capacity is almost 2900 MW of gas, almost 1600 MW of wind, and 700 MW of installed solar. We’re connected to the rest of the NEM by two interconnectors, an AC connector with a capacity of 600-650 MW, and a DC connector with a capacity of 220 MW. With electricity demand here declining, or at least not growing, synchronous generation and supply have reduced, with a resultant reduction in system inertia.
Canto: I presume by system inertia you mean the tendency for a machine, a vehicle, or a generator, whatever, a system to keep going once the power’s switched off. Like the QE2 has a lot of system inertia.
Jacinta: Right, but it’s a particularly important term in reference to power generation. There are some neat explanations of this online, but I’ll give a summary here. Coal-fired power stations work through the burning of coal which generates steam to turn a turbine, putting energy into the grid, and being massive, it has a lot of spinning inertia. Slow to fire up, slow to wind down. Solar, though, doesn’t work that way. It has no spinning or even moving parts. When the sun’s off, it’s off, but when it’s on it’s on. There’s really no inertia at all in a conventional solar PV system.
Canto: And wind? That’s the principal renewable energy here.
Jacinta: Yes that has inertia, certainly, but it’s variable and not as significant as perhaps it could be. So anyway on the morning of the blackout weather forecasts were grim, but not enough for AEMO to put out alerts for a ‘credible contingency event’. As it turned out there were at least seven tornadoes in the north of the state that day, as well as numerous lightning strikes and high winds which caused structural damage to transmission lines. At blackout time electricity demand in the state was a little over 1800 MW, with nearly half of it being supplied by wind farms, and of the rest about a third came from gas-fired generators, and the other 600 or so megawatts came through the interconnectors from Victoria. The main Heywood connector was approaching its operating limit. Short circuits to the transmission lines, caused by lightning, were the probable proximal cause of the blackout. Thirteen wind farms were in operation at the time, and eleven of them experienced ‘voltage dips’. What happens in these circumstances is that ‘fault ride-though’ responses are invoked. However, nine of the eleven farms had a lower pre-set limit for the ride-through response to proceed, and after a number of dips those nine wind farms cut their connection. The other two had higher pre-set limits and continued operation.
Canto: Ahh, so those preset limits were set too low?
Jacinta: Maybe – that’s one for further investigation. So the lack of generation from the wind farms caused an overload on the Heywood interconnector, and it was disconnected as per protection systems, resulting in frequency failure on the grid, and blackness fell upon all the land.
Canto: Right, so how did things get restarted? What’s the normal procedure?
Jacinta: Well, there’s this contracted service, called the System Restart Ancillary Service, which in SA is contracted to two major electricity generators (unnamed in the report), who can supposedly restart regardless of the grid situation, and provide power to the transmission network, but these servers failed for unexplained reasons, and power was finally restored through the Heywood interconnector together with the Torrens Island power station.
Canto: Okay, so now the fallout. How could things have been done differently?
Jacinta: Some near-term fixes have been implemented already. Firstly, having to do with frequency rates which I won’t go into here, and secondly in relation to wind farms. Five of them have made changes to their fault ride-through settings, and AEMO is looking at this issue for wind farms across the NEM. The Australian Energy Regulator, another bureaucratic body, will have completed a full analysis of the blackout by early next year to determine if there were any breaches of regulations. Obviously it’ll be looking at the conduct of AEMO throughout, as well as that of the transmission operator, ElectaNet. It’ll also look at these fault ride-though settings of wind farms and the failures of the System Restart Ancillary Service. It all sounds as if everything’s being done that can be done, but the major problem is that grid security as it stands can only be provided by large generators. The report again mentions gas-fired generators as the best solution, at least in the short to medium term.
Canto: So, as the grid, and the general provision of electricity, undergo these transformations, we’ll no doubt experience a few more of these hopefully minor setbacks, which we can learn from as we develop security for a more diverse but more integrated system…
Jacinta: Greater integration might require less squabbling about the future of energy. I can’t see that happening in the near future, unfortunately.