South Australian power consumers have been slugged for a massive $4.5 million price spike for services that stop energy infrastructure from blowing up.
The Australian Energy Regulator released a report on Tuesday night into why prices for services which stabilisethe grid exceeded $5000/MWh in SA on October 18 last year.
It found that for more than five hours, the cost of the services which regulate frequency soared to more than $11,000/MWh, bringing the total cost for the day to $4.5 million.
“In comparison, FCAS (Frequency Control Ancillary Services) costs across all mainland National Electricity Market regions combined are typically around $200,000 per day,” the report stated.
Over the week inclusive of October 18, 40 per cent of the cost – or $1.8 million – was paid for by customers and 60 per cent of the cost was recovered from generators, which The Advertiser understands tended to be wind farms because they cause frequency changes.
The report found that a planned outage on the Heywood interconnector, which connects SA to Victoria, created a risk that SA could cut off from the rest of the network. This creates a higher risk of blackouts.
Since September 2015, to help reduce the risk of blackouts, the Australian Energy Market Operator requires a set level of ancillary services to be sourced in SA to protect the system.
“This is effectively a security mechanism introduced by AEMO to protect South Australia in the event of separation (from the national market),” the report stated.
But the report found that two generators – Pelican Point and the Quarantine Power Station – that provide the service experienced technical difficulties on the day which led to fewer low-priced services being available and, therefore, led to the price spike.
After the statewide blackout in September last year, which was partly caused by a massive drop in the grid’s frequency after the interconnector tripped, AEMO introduced another new rule requiring two gas generators to be on at all times, because until now wind farms had not provided these services.
But the Essential Services Commission of SA has since changed licensing conditions for all new generators that would require them to be able to provide such services.
Energy Minister Tom Koutsantonis said these stability services were required to protect the network in the event SA was separated from the national grid.
“I am advised the price spike was caused by issues with two gas-fired power stations. The cost will be met by both electricity generators and consumers,” he said.
“Our energy plan includes building a new gas-fired power station and Australia’s largest battery, both of which will improve grid security.”
The Government’s proposed $360 million, 250MW power station was not intended to generate power very often but would be switched on most of the time to provide the stability services.
Mr Koutsantonis said ESCOSA’s reforms were also designed to ease the market.
Separate data released by the regulator yesterday shows that SA energy consumers had the highest average electricity debt in the country, were the most likely to be on a hardship program and most likely to have their electricity disconnected due to non payment.
A total of 2412 residential electricity customers had their service disconnected in the last quarter of 2016, and 656 residential gas customers.
Almost 20,000 gas and electricity consumers are on hardship programs, with almost one in every 50 electricity customers on a program – again the highest in the nation.
Opposition energy spokesman Dan van Holst Pellekaan said South Australians had been caught in a “pincer movement of rising prices”.
He called on the AER to immediately raise the level of debt that triggered a disconnection, saying the current $300 threshold was too low.
No sunshine on jobs in renewables
By Adam Langenberg
THE number of South Australians employed in the renewable energy sector has plummeted in recent years, new statistics show.
Australian Bureau of Statistics data shows 710 South Australians were employed in a fulltime capacity in the industry in the last financial year, a huge drop-off from almost 2300 six years ago.
Solar is the main contributor to the drop, with jobs falling from a peak of 2010 in 2011-12 to just 470 last year.
Jobs in wind power were at a high of 690 in 2010-11, and fell to 120 last year.
Opposition energy spokesman Dan van Holst Pellekaan said the data showed Premier Jay Weatherill “talks a big game on renewables but doesn’t deliver when it comes to actual jobs”.
But Energy Minister Tom Koutsantonis said the peak in solar power jobs coincided with the State Government’s solar feed-in tariff.