March 7, 2017
Australia

Renewables push will hike up prices, lead to instability, says AEMO

Michael McKenna, Reporter | The Australian | March 6, 2017 | ww.theaustralian.com.au

Labor’s plan to produce 50 per cent of electricity from renewables by 2030 has been dealt a blow by the national power market operator, which has warned that Queensland’s push for the target could lead to higher electricity prices and an unstable network.

In a submission to the Queensland Renewable Energy Expert Panel review, the Australian Energy Market Operator has attacked modelling used by the Palaszczuk government to claim its 2030 target will be cost-neutral to consumers and will not undermine network reliability.

In the leaked submission to the panel – which delivered its final, but unreleased report last year to the state government – the independent energy regulator said better analysis was needed to reflect the “volatility’’ of renewable energy.

It also raised concerns that lower levels of coal-fired power in the system could make the network more susceptible to outages, which could cause blackouts, as when South Australia separated from the national network after a massive storm plunged the state into darkness.

“These attributes are already being experienced in the South Australian power system,’’ AEMO said. “AEMO anticipates that this challenge will emerge in other regions, such as Queensland and Tasmania, that could, in an extreme event, separate from the remainder of the (national electricity market), as the whole system evolves.’’

AEMO warned that Queensland’s proposed renewable energy policy “will at times mean that asynchronous generation (for example, wind and solar PV) will be very high relative to Queensland demand, and conventional energy generation will be displaced. AEMO expects that this will have a large impact on the operational aspects of the network, including security and stability.’’

The doubts raised by AEMO will also stoke Coalition attacks on Bill Shorten’s ambition to produce 50 per cent of electricity from renewables by 2030.

In its submission on the Queensland government policy, AMEO raised doubts about the continued viability of some of the state’s eight coal-fired power stations in the face of the rapid transition, given just 10 per cent of the state’s electricity is now generated by renewables.

The regulator said further modelling could reveal that some of the existing power stations would have to close, and lead to higher electricity prices.

“AEMO notes that if this reveals that the operating regime for some of these generators will be less profitable than conventional modelling anticipates, those plants could close earlier than anticipated,’’ AMEO said in its submission.

“This could have impact on prices, investment and the resulting generation outcomes, not forecast by the original modelling.’’

Late last year, the draft report of the panel, set up by the state government to find ways to meet the target, said its modelling showed the power station revenues would fall by between $600 million and $1.1 billion. Under two of the three models to meet the 50 per cent target, none of the coal-fired power stations were also forecast to close.

URL to article:  https://www.wind-watch.org/news/2017/03/07/renewables-push-will-hike-up-prices-lead-to-instability-says-aemo/