The ‘SA Energy Crisis’ Is A Myth Peddled By Liars

protesting crowd

If you repeat a message long and loud enough many people will accept it as true.

At the start of the month I wrote that South Australia’s grid was in disarray.  I warned that more blackouts were inevitable as soon as summer rolled around again or adverse weather struck.

With my warning I wanted to give people a sense of perilous urgency on the need to do something about the dilapidated state of the grid that we depend upon for our jobs, our well being, and civilization itself.

But that was on April Fools Day.

I wasn’t serious.

There is nothing wrong with South Australia’s grid.  Not physically, at least.  To be precise, there is nothing materially more wrong with it than normal.  Despite what you may have heard, the fact that over half the electricity generated in the state now comes from wind power and rooftop solar1 has not reduced the grid’s reliability.

The SA grid is just as capable of meeting supply as it was last year, 5 years ago, or 10 years ago when the state had almost no renewable generating capacity.  But despite this, there are many people think SA’s grid is crumbling faster than a biscuit umbrella in a tsunami.

But it is now widely accepted that 3 separate blackouts in SA last summer were due to:

These events should have prompted:

  • a discussion on whether we need to make the grid more storm resistant
  • an announcement by the state government, fully supported by the federal government, on how they are changing the way electricity is sourced from generators.

Because that’s why we have government.  To make things work better.  It’s not just for its entertainment value.

But we didn’t get that.

Instead we got a chorus of harpies consisting of Coalition politicians2 backed by incumbent generators and fossil fuel interests who insist every problem is the fault of renewables and that the South Australian grid is going to pieces so fast people are being hit by the shrapnel.

But when coal-dominated Queensland had blackouts as a result of cyclone Debbie not one Coalition politician blamed fossil fuels.  And when 22,000 Melbourne homes lost power due to storms in October and another 22,000 Victorian homes were blacked out this month due to bad weather, not one of them condemned Victoria’s dirty brown coal power.

Just to be perfectly clear, politicians who blame renewable generation for the problems the South Australian grid has experienced over the past 6 months are lying.  While solar and wind power are not magically perfect sources of energy, gangs of roving wind turbines and solar panels have not been running around pushing over transmission towers during storms, convincing power companies not to turn on gas power stations in the middle of a heatwave, or damaging an interconnector with Victoria.

The AEMO Says SA’s Grid Can Meet Demand

The Australian Energy Market Operator, or AEMO, runs the longest synchronized electricity grid in the world from Cathedral Rocks in South Australia to Port Douglas in Northern Queensland.  They have stated South Australia has enough supply to meet the demand for grid electricity and that will be the case for the next 10 years.  To quote the executive summary of their latest South Australian Electricity Report, which was published in August last year:

“Based on current industry-announced closures and committed new projects, AEMO’s 2016 National Electricity Market Electricity Statement of Opportunities (NEM ESOO2) indicates that South Australia has sufficient supply to meet the NEM reliability standard over the next 10 years.”

This doesn’t mean they expect the South Australian grid to work flawlessly in that time, but it does mean South Australia’s ability to reliably supply grid electricity is no worse than in the past and no worse than before South Australia started generating large amounts of electricity from wind and solar.

If The Grid Can Meet Demand Why Hasn’t It?

South Australians reading this may be thinking, “If the grid can meet demand, then why the hell hasn’t it?”

Well, there are two main reasons why those long wires connected to people’s homes haven’t always been filled with electricity juice and they are:

  1.  It can be cheaper to repair the grid after an extreme weather event than to make it tough enough to survive unharmed.
  2. Electricity generation is a for profit business and the companies that own power stations operate them in a way that provides the most benefit to them.  When the interests of the generating companies and the people differ, the people lose.

A Properly Designed Grid Breaks Down Every Now And Then

Many people find this a difficult concept to grasp, but a grid that never breaks down is a poorly designed grid.  This is because the more reliable it is the more it costs to build.  Or as the great grid designer P. Diddy put it:

“Mo’ reliability, mo’ money.”

Eventually a point is reached where it makes more sense to spend the money on something else such as flu vaccinations, safer roads, or beating Portugal on internet speed3.

On average, Australian homes suffer from around 3.5 hours of blackouts a year, which means the grid works 99.96% of the time.  That doesn’t seem so bad, but compared to other developed countries it is4.  We do a little better than the United States, but that’s not exactly something to be proud of, as we pay a lot more for electricity than they do.  The only developed countries that are worse are Lithuania and Portugal.  (Suck on that Portugal!  You may have 25% faster internet, but we average 70 minutes a year more grid electricity than you!)

It will probably come as no surprise that South Australia’s grid reliability has averaged the worst in Australia over the past 5 years.  But because these figures bounce up and down a lot on account of whether or not there has been extreme weather, you may be surprised to learn that South Australia was the most reliable in 2015.

There are two main ways to increase grid reliability.  The first is to make transmission more resistant to damage from storms or other natural disasters and from faults in equipment and operation.  The second is to increase generating capacity so there will be enough power to keep everyone’s air conditioner running even in the middle of an extreme heatwave – provided of course that capacity actually gets turned on.  The South Australian government is taking the second approach with their plan to build a new gas power station.

Did Wind Power Blackout South Australia?

After the huge storm and statewide blackout in September, it would have been very reasonable to have a discussion on whether or not South Australia’s grid should be made more storm resistant.  But instead we got a slew of Coalition politicians attempting to blame wind power for the state blackout instead of powerful winds.  The winds were so powerful they not only downed power lines, they bent transmission towers over until they were lying flat on the ground.

The damage to transmission resulted in wind farms shutting down to prevent further damage to the grid, exactly as they were meant to do.  Analysis after the fact by the AEMO has shown that the blackout could have been avoided if wind farms had responded differently when power lines were downed and their software has since been adjusted so they won’t act in the same way in the future.

But this doesn’t mean wind power caused the blackout, it means the AEMO screwed up.  They operate the grid and have overall responsibility for making sure it is resilient to storm damage, but they failed to take the response of wind farms into account in their modelling of what would happen during a major storm.  This is particularly embarrassing because in Europe they recognized the problem and fixed it a decade ago.

So wind power did not cause the state grid to crash.  The wind farms would have been capable of riding through the disruption with different settings and now, with a just a few software changes, they are.  It was the fault of the people whose job it is to make sure the grid is resilient to storm damage.  Grid operators have a difficult job and it is impossible to avoid all mistakes, but it is important to see where the fault actually lies so we can learn from mistakes and prevent them happening again.  Blaming wind power does not help with this.  There have been plenty of times coal and gas generation have shut down due to safety systems tripping unnecessarily, but no one has ever suggested we should stop building fossil fuel power stations as a result.

Should SA’s Grid Be Made More Storm Resistant?

The September storm that blacked out the state was the most powerful of the century and has been described as a 50 year storm.  It is possible that severe weather events are increasing in frequency due to global warming, but in practice it is difficult to be sure, as it requires decades of observations to gather enough data.

Whether or not the weather is getting worse, there are two other main arguments for shoring up the grid.  Firstly, South Australians are richer than they used to be, so the cost of having an hour of work or relaxation ruined by a power failure is effectively higher than it was.  And secondly, the cost of borrowing money is very low at the moment so improving infrastructure costs less now than in the past.

On one hand I think the grid should probably be made more storm resistant, but on the other hand, under our current system improvements are likely to be expensive and provide little bang for our buck.  A major reason why electricity is so expensive in Australia has been unnecessary improvements in transmission capacity.  So I suggest any increases in the grid’s ability to take a hit from a storm should be made gradually and cost effectively and we should cross our fingers and hope we won’t be hit by any extreme weather for a while.

Heatwave Blackout Caused By Not Turning On Idle Generators

On the 8th of February at 6:40 pm, as grid electricity consumption was near its peak in the middle of a heatwave, around 90,000 Adelaide properties were left without power for around 45 minutes due to a shortfall of approximately 100 megawatts.  This wasn’t because there wasn’t enough generating capacity to meet demand, it was because Engie decided not to turn on 250 megawatts of idle gas generating capacity it had sitting around doing nothing and because AGL decided the middle of a heatwave was a good time to withdraw 120 megawatts of gas capacity for maintenance.

Clearly this was not a problem with renewable energy, this was a problem with fossil fuel generating capacity not being turned on.  The solution to this is not to blame renewable energy, it’s to turn an idle gas power station on.  Despite this, our Prime Minister suggested on national television that South Australians were too stupid to realize there is usually not much wind during heatwaves and they hadn’t planned for that.  I was very upset by this because he should have instead suggested we were too stupid to turn on our gas power stations.

Neither South Australians or the AEMO are morons who are unaware of the fact that heatwaves and low winds normally go together.  There was more than enough generating capacity to meet demand.  The problem was that the private companies that own the generators decided not to turn them on and the AEMO did not act to make sure they did.

Power Companies Game The System To Raise Electricity Prices

The Engie power company has 250 megawatts of gas generating capacity at Pelican point that is sitting idle because if it was put into service it would lower the price its other generators receive.  In addition, across Australia, generating capacity keeps mysteriously requiring maintenance at exactly the time its removal greatly increases wholesale electricity prices.  Australia’s fossil fuel generating capacity is getting old and so some of that maintenance will be genuine, but it happens far too often to be occurring solely by chance.  Like my grandfather always used to say, if it walks like a duck and it quacks like a duck, then it’s probably a power generator withholding supply to force up wholesale electricity prices while disguised as a duck.

There are a several things the state government could do to make sure generating capacity is turned on, ranging from changing the way wholesale electricity is paid for all the way up to renationalizing the grid, but none of the options are politically easy.  The fact the state government has decided the best way it can maintain a reliable electricity supply is to install a large-scale battery system and build an unnecessary new gas power station indicates how difficult the other options are.

Rooftop Solar Improves Energy Security And Reduces Blackouts

Back in 2009, during a record breaking heatwave, South Australia suffered from rolling blackouts over a number of days.  This was back when a South Australian grid failure did not automatically result in renewables being blamed.  While the state had far less renewable generating capacity back then, the main reason was because the Coalition was not in power and was not yet possessed by a unslakeable thirst for opposing renewable energy.  While the Coalition has never been enthusiastic about renewables, John Howard did introduce Australia’s original Renewable Energy Target back in 2001.

But one thing that was similar to the blackout on the 8th of February this year is back then AGL also decided the middle of a heatwave was an excellent time to do maintenance.  By withholding part of their supply they caused wholesale electricity prices to soar for the rest of their generating capacity and caused rolling blackouts to occur from around early to mid afternoon.

But now, 8 years later, South Australia is mostly immune to blackouts during heatwaves for a large part of the day.  This is thanks to rooftop solar providing a large part of electricity demand on sunny days from mid-morning to mid-afternoon.  Currently over 30% of South Australian homes have rooftop solar and the state has 750 megawatts of solar generating capacity, with the large majority of it on roofs.  At times solar has provided 38% of the total electricity consumption in the state.

Electricity produced by rooftop solar means it is now easy for the grid to meet demand on hot summer afternoons when electricity consumption is at its peak.  It’s only when rooftop solar production falls off later in the day there is a problem meeting summer demand.  The blackout on February the 9th, when power companies decided not to turn on their generators, didn’t occur until around 6:40 pm Adelaide time when solar output had fallen to a low level.

By making it easy to meet demand for much of the day, rooftop solar also improves reliability by reducing the amount of time other generation has to run at high capacity.  This reduces the chance that something will go wrong and result in a blackout from a power station having to go offline when there is no spare capacity to take up the slack.

But despite Coalition politicians always going on about energy security, not once can I recall any of them ever thanking solar power for increasing grid reliability.

The State Government’s New Gas Generator Isn’t Required

The state government’s solution to private gas generators not being turned on and market manipulation pushing wholesale electricity prices sky high is to build large scale battery storage and a new $360 million gas power station with 250 megawatts capacity.  That is the same amount of capacity that is currently owned by Engie and sitting unused at the Pelican Point Power Station.

While the new power station is physically completely unnecessary and will cost South Australians around $212 each, if it reduces average wholesale electricity prices and provides a secure electricity supply it could be well worth it from the state’s point of view.

I strongly suspect South Australia and the world would be better off overall if the money were spent differently, such as on increased solar capacity, but I would be very interested in sitting down with the people responsible for the state government’s plan and finding out just how they intend to use the new power station5.

We Can’t Improve Reality Until We Recognise Reality

South Australia does not have a problem with physically meeting electricity demand.  Its ability to do so is no worse than in the past, as the AEMO has clearly stated.  What has caused disruptions in South Australia’s grid supply over the last 8 months are:

  1. Extreme weather events and AEMO’s failure to correctly model the effects of storm damage.
  2. An equipment fault in Victoria causing the Heywood interconnector to fail.
  3. Generators withholding supply to push up electricity prices and the AEMO’s failure to get them to meet demand during a heatwave.

Not one of the interruptions in grid supply was the direct result of generating a large portion of the state’s electricity from wind turbines or solar panels.  South Australia’s wind farms were quite capable of supplying power on September the 28th but could not because they were configured to shutdown under the conditions they experienced and they did exactly what they were supposed to do.

The Coalition continuously attacks renewables and declares them to be responsible for anything that goes wrong with the South Australian grid.  They don’t care if the cause was a devastating storm, a fault in Victoria, or the failure to turn on idle fossil fuel generating capacity.  They have created the myth that South Australia’s grid is in crisis.  They have done this because they represent the interests of incumbent generators and fossil fuel industries and they know if they repeat their message long and loud enough many people will accept it as true.

But no matter how many people they convince it is true, it won’t make it true.  While politics has never been 100% grounded in reality, ignoring the truth on serious issues has serious consequences.  In the United States it has led to Donald Trump being in charge of nuclear weapons and in Australia it has resulted in greater greenhouse gas emissions and more health problems from coal pollution.

Getting this stuff right is important.  In order to improve reality we must first recognise reality.

That is not what the Coalition is doing when it comes to renewable energy.

Footnotes

  1. Some reports have stated that over half the state’s electricity consumption is now supplied by renewables, but this is not the case. Because South Australia imports more electricity than it exports and most of what it imports is generated from dirty Victorian brown coal, the state’s electricity isn’t 50% renewable yet.  But it is getting there.
  2. To be fair, Nick Xenophon also opposes wind power, but while fossil fuel interests are behind Coalition opposition, I suspect Nick may be doing it for free.
  3. Portugal’s nomial GDP per capita is around $26,500 while Australia’s is around $69,000.  Despite Australia being far wealthier their average internet speed is 25% faster.  Maybe we’ll be able to afford internet as fast as theirs when we are three times richer than they are instead of only 2.6 times richer.
  4. This information is from 2013 which makes it more dated than I’d like, but as far as I am aware, there has been no large change in Australian grid reliability since then.
  5. If I manage to pull this off, I’ll let you know about it
About Ronald Brakels

Many years ago now, Ronald Brakels was born in Toowoomba. He first rose to international prominence when his township took up a collection to send him to Japan, which was the furthest they could manage with the money they raised. He became passionately interested in environmental matters upon his return to Australia when the local Mayor met him at the airport and explained it was far too dangerous for him to return to Toowoomba on account of climate change and mutant attack goats. Ronald then moved to a property in the Adelaide Hills where he now lives with his horse, Tonto 23.

Comments

  1. Max Bourke AM says

    Only thing I would disagree about this post was the assertion that it was “bad luck” that the weather event caused a blackout in SA. It is about time that people started considering weather events like this the new normal under of man-mad cliamte change, get used to it, not ‘bad luck’.

  2. Surely the problem is down to privatisation, blind freddy could see this outcome.
    Don’t tell me you would turn on a generator if you owned the assets and withholding the power would be a nice little earner for your share holders.
    I think the gas generator is a bit like the nuclear deterrent to the companies and it’s guvt. optionable operation may persuade them to do the right thing as you can only persuade after you have sold the farm.
    This will have to do in the meantime before we can all afford panels on our roof and batteries with a mains independent inverter which I predict is many years down the track.

  3. At the core of any issue you analyse you will find that it is all about money. Who is going to pay for what and why. Electricity is only produce to meet real time demand generate it now consume it now. Batteries and Pumped Hydro can provide base load power immediately on demand within seconds. Pretty sure that is not the case with a Coal Fired Power station idling. So if Pumped Hydro can supply power now and it takes Coal Fired Power a greater time interval to come on stream who pays the cost of the start up time interval amortised over the cost of the actual coal fired power generated, consumed and paid for by consumers?

    • Ant, the electricity market allows generators to bid proving two classes of fast start services. Large steam turbine in coal fired plant can carry significant amounts of inertia classed as spinning reserve. This can be dispatched almost immediately and often occurs after a large unit abruptly trips offline. This gives fast starting hydroelectric and open cycle gas turbines time to spool to correct frequency until other plant can make up the shortfall.

      If generators have bid this service they are remunerated if used.

  4. Ronald, once again well researched and written. Only a couple of points to add.

    1) The statewide cascading failure was indeed caused by control systems operating that wasn’t anticipated, although I feel it’s a little unfair to blame AEMO entirely for this. Certainly there’s a component but the wind generators also have a responsibility to provide reliable generation (wind permitting). Fortunately this has been addressed and subsequent frequency and voltage disturbances on the transmission network have shown the retrofit to be a success with wind generation riding through.

    2) The reason why Engie had the second GT unit idle was twofold. One, it wasn’t economic to operate normally so withheld due to market conditions. Secondly, they lacked the gas contract to allow the unit to operate. This has since been rectified and when market conditions have allowed Engie has had both GT units online (this also allows the HRG to operate more efficiently)

    The increase in spot prices is also good for renewable energy. Sustained higher prices will spur more renewable projects, much in the same way sustained high oil prices spur increased drilling.

  5. Colin Spencer says

    If the South Australian network is working fine, it should be capable of operating without input from the Heywood interconnector. Supply from Victoria will be highly unlikely from now on due to the closure of Hazlewood Power Station. If the South Australian network was as capable as it is touted to be, how come South Australians pay the highest prices for electricity in Australia? It can’t be down to privatisation either, Victoria was the first state to privatise the entire system, and it has always had the cheapest electricity of all states.

    • Ronald Brakels says

      Collin, the South Australian grid is quite capable of operating without input from Victoria. That was demonstrated in September. If Victoria has trouble supplying electricity, then South Australia will help them out by exporting electricity to them like this morning and, looking at current state electricity prices, probably at the moment. But even now that old Hazelwood is closed, South Australia will still import plenty of electricity from Victoria. This is because they are quite happy to send it over whenever doing so is profitable.

      The cost of electricity in South Australia has always been higher than in other states for two main reasons. Firstly, South Australia has no convenient deposits of low cost coal to exploit or hydroelectric potential, unlike the eastern states. As a result, up until just recently, most electricity generated in SA has come from gas rather than coal. Secondly, the lack of industry in South Australia makes the grid very peaky. That is, there is a large difference between minimum and maximum demand.

      Another problem is the lack of competition in SA. This is an issue throughout Australia, but in SA it is particularly acute. Fortunately wind and solar help with this as they are (usually) price takers and at times they push wholesale electricity prices down to zero or less. Fortunately, this will happen more often in the future as their capacity continues to expand.

      • Colin Spencer says

        The reason low cost reliable coal fired generators have been closed down, according to Alinta Energy is because of falling demand, and renewable energy supplies making the operation of those facilities uneconomical. Quote: “On 9 May 2016 Alinta Energy closed Flinders Operations, which encompassed Augusta Power Station (Northern and Playford B Power Station) and Leigh Creek Coal Mine in South Australia.

        The difficult decision to close the Flinders business followed a detailed strategic review of the assets. This review determined that the Flinders business could not return to profitability due to a significant oversupply of power generation in South Australia as a result of falling electricity demand and significant growth in renewable energy in the state.”

        The past closure of Mitsubishi, the current closure of Holden manufacturing, along with a general decline in demand for electricity in South Australia brings out the reality of the demand and supply equation. The cost of generation for declining demand are directly related to the price of the product. When subsidies for wind and solar installations are removed, the cost of electricity supply for both methods of generation are going to bring down demand from domestic and commercial users. That’s how the market works: You charge more, we use less. In South Australia the problem is paying for the cost of supply of the power not generated by renewables. Transmission losses from Gippsland power stations to South Australia are considerable, as is the cost of providing the interconnector and other capital equipment needed to deliver load on demand. As you point out, the spot price from interstate can be quite high. Well, get used to it, now that Hazlewood has closed, spot prices will be even higher. The good part of this is that it will motivate those who can afford $10k to $20k outlay to go solar systems and Tesla P2 battery systems.

    • Colin, Ronald has already addressed a few good points. Since the closure of Hazelwood SA has been importing less from Victoria. You will find that Victoria exports primarily off peak to SA and TAS and this has the advantage of making the big Latrobe Valley lignite fleet more efficient and slightly less carbon intensive as they are operating at a steady output.

      South Australia has the aging Torrens Island plant that is not only horribly inefficient but uses increasingly expensive gas as its fuel. It does the advance of being very scalable due to eight units and the ability to fire HFO if there’s a gas emergency or shortage.

      Until SA sources a cheaper form of generation I doubt you’ll be finding any relief from prices. The way things are headed a giant transmission line from Cooper Basin geothermal resources could even be feasible in upcoming years.

  6. Ronald: “…politicians who blame renewable generation for the problems the South Australian grid has experienced over the past 6 months are lying….”

    Sadly, not enough Aussies realise(d) this.

    To think we used to vote for the COALition!~

  7. Erik Christiansen says

    All the more reason for going solar – so long as you have islanding capability.
    Note that a certain Tesla-driving ex-Internode-CEO in Adelaide has 10 kw of panels on the roof, 20 kWh of batteries, grid connection, and claims to island:

    https://www.youtube.com/watch?v=4OHstY_kKUY

    Does an islanding system throw an isolating contactor on line failure, or is there some kind of two-port bidirectional inverter between line and internal AC, that anti-islands only on the outside?

    The 600 kWh of batteries at his office is rather impressive, but then he doesn’t pay retail for ’em.

  8. Another excellent post Ronald. I’m in the UK but I would guess that the Oz mainstream media has probably done their part to fan the flames of myth. One of the UK’s largest papers (but total factless, crap) ran an article recently suggesting that the UK would need to build 20 new nuclear power stations in order to move to electric vehicles. The Dutch on the other hand have been installing V2G (Vehicle to Grid) charge points since 2015 to create sort of smart micro-grids which can tap into the wider grid if need be – a bit like SA to Victoria but on a smaller scale I suppose. This combines nicely with Dutch’s relatively high uptake of solar PV.

  9. Steve Charles says

    Further to the recent discussion on the recent feed in limit in SA to 5kW, I have received a helpful response from SAPN about the reasoning behind it. Firstly, this link provided offers some useful background to the issue and potential solutions:
    http://reneweconomy.com.au/rooftop-solar-australias-greatest-opportunity-greatest-risk-86420/
    The letter itself reaffirms SAPN’s support of solar PV and other renewables but points out the difficulties in managing the quality of supply to customers on a network that was not designed for reverse power flows.
    We are all encouraged to contribute to the discussion at:
    https://www.talkingpower.com.au/

Speak Your Mind

*

GET THE SOLARQUOTES WEEKLY NEWSLETTER
%d bloggers like this: