Grid costs revive renewables concerns

The market operator only on Friday resolved a technical problem in the West Murray region that kept five large solar farms at half capacity for about seven months because of their combined impact on system stability in a remote area of the grid.

AEMO last week revealed a huge escalation in the costs incurred in operating the electricity system in the March quarter to a record $310 million, mostly due to three grid "separation" incidents.

The most significant was the South Australian one, caused by storms knocking out transmission towers in Victoria. It was responsible for the bulk of a record $227 million of costs for frequency control and most of $33 million incurred through directing gas power stations to run.

It also led to record curtailment levels of renewable energy, including six wind farms that were shut down for all 18 days of the transmission outage.

'Essential' coal fills the breach

In an analysis of generation in South Australia and Victoria in the weeks preceding and after the separation, Delta found that in the lead-up, intermittent wind and solar power made up 80-90 per cent of South Australia's generation.

Victoria's coal plants met 70 per cent of the demand in the Victoria-SA region, supporting the stability of the renewables-dependent SA system.

But in the week after, gas had to provide much of the synchronous generation, while much solar and wind generation was curtailed, incurring the extra costs.

It concludes that the incident "demonstrated the real limitations for Australia to meet excessive near-term renewables targets, let alone net-zero emissions" in the absence of either nuclear power, more baseload hydropower or connections to electricity systems in other countries.

Delta, which owns the Vales Point coal power generator in NSW, noted that the direct cost of invervention to maintain security of supply in South Australia – of $93 million for a system equivalent to 7 per cent of total NEM generation – is equivalent to about $23 billion a year for the entire NEM if all baseload coal was replaced with wind and solar plus gas.

It argues that low-cost coal-fired power generation "will be an essential part of Australia's electricity primary energy source mix for decades to come" and that Delta would be a part of that "for at least the next three decades".

Mr St Baker, who has previously spoken out on the risks involved with a rapid adoption of renewables, said he has raised his concerns with Energy Security Board chairman Kerry Schott as well as with AEMO chief executive Audrey Zibelman.