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Time for honest discussion about energy in South Australia says Clean Energy Council

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The Australian Clean Energy Council (CEC) has called for a national summit on energy market reform to set the record straight about clean energy in South Australia.
Time for honest discussion about energy in South Australia says Clean Energy Council

The aim of the summit would be to discuss what is actually happening in South Australia and initiate a mature conversation about practical reforms to support the continued transition to clean energy in the state.

The CEC announcement followed the publication of an article in The Australian newspaper suggesting that wind turbines in South Australia were using more power than they generated during the state’s electricity crisis. The piece by Michael Owen, Adelaide Bureau Chief at the paper, said that “the sapping of power by the turbines during calm weather on July 7 at the height of the ­crisis, which has caused a price surge, shows just how unreliable and ­intermittent wind power is for a state with a renewable ­energy mix of more than 40 per cent”.

Responding to the article, a spokesman from CEC said that it is a frustrating issue:

“Everyone with an axe to grind against renewable energy has been taking a swing, and no-one seems to want to understand the issue before covering it. It followed on from a week of wild weather in one of our states when the link with the eastern states was down for maintenance, gas prices were really high and electricity prices spiked too because of low competition.”

The spokesman went on to say that the article was not accurate, but that it was obviously damaging for the industry.

The CEC weren’t the only ones to be sincerely annoyed at The Australian’s piece. According to Giles Parkinson, editor of RenewEconomy, it appears that the inaccuracies in the article were based on information from the South Australian opposition Liberal Party, a vociferous opponent of wind power. The Liberal Party appears to have obtained data from the Australian Energy Market Operator and then spectacularly ‘stuffed the numbers up’ before passing on the flawed information to The Australian.

RenewEconomy pointed out on Wednesday that the figures quoted by the paper were not only incorrect but were also completely non-sensical, citing figures that were nearly four times total capacity. These figures were later changed but are still not entirely correct.

“The claim in the original article” said Mr Parkinson “…went from this: “While all wind farms in South Australia were producing about 5780MW between 6am and 7am, by 1pm the energy generation was in deficit as the turbines consumed more power than they created. By mid-afternoon, energy generation by all wind farms was minus-50MW”, to this: “While all wind farms in South Australia were producing about 189.72MW between 6am and 7am, by 1pm the energy generation was in deficit as the turbines consumed more power than they created. By 2.20pm, energy generation by all wind farms was minus -2 MW.”

RenewEconomy has also noted that in Northern Territory, Liberal Party chief minister Adam Giles, having included renewable energy as a major issue in his re-election campaign, has quoted figures about solar costs that RenewEconomy concludes are totally absurd. It has also pointed out on numerous occasions that “there is very little correlation with the increased uptake of renewable energy and high electricity prices in South Australia, which are caused by its long-standing reliance on gas-fired generation and limited competition in the market.”

In a press announcement released today, CEC Chief Executive Kane Thornton said that recent reporting of the energy situation in South Australia and the misunderstanding of many commentators demonstrates the complexity of the matter and the broad range of vested interests involved.

(Graph below shows correlation between wholesale gas and electricity price trends in South Australia. Courtesy of Clean Energy Council (CEC) via RenewEconomy)

“We have been calling for several years for a more strategic approach to energy market reform that can deliver a 21st century energy system driven by renewable energy” said Mr Thornton. “Unfortunately it has taken recent events in South Australia to highlight the importance of long-term strategic energy planning. We are calling for major stakeholders, industry and government representatives to come together and lay the groundwork for sensible and considered changes in the energy market that will serve power users better. It is unfortunate that the complexity of this issue has resulted in some commentators settling on renewable energy as the root cause of all the challenges in South Australia. This is simply untrue.”

The CEC has also today released a new report entitled The rise of Renewables in South Australia: Current state of play which examines recent trends, including power prices, reliability, system security and the key factors affecting each of these. The report includes new analysis showing that wind power output correlates with lower wholesale power prices in South Australia, in contrast to a strong correlation between the price of gas and electricity prices.

“Gas has always been the strongest indicator of electricity prices in South Australia, and the analysis shows that very clearly” Mr Thornton added. “At some points last week gas prices were four times their usual rate, and this coincided with very high power prices. Another clear challenge is the limited competition in the state’s energy market. Stronger competition and diversity in energy technologies is key to keeping electricity prices low in South Australia and throughout the country.”

Mr Thornton further stated that reliability remains strong in South Australia, with the Australian Energy Market Operator (AEMO) recently confirming that the SA system is still meeting its reliability requirements of 99.998 per cent of power demand supplied. The current issues therefore relate to fluctuating prices while the interconnector is down and gas is in increasingly shorter supply.

As the transformation of the South Australian energy system continues, a range of clear market and system solutions need to be carefully considered to both reduce the reliance on gas-fired generation and drive greater diversity and competition in the market. These matters are complex and there is no single solution. There are however a range of technologies that can together overcome these challenges and ensure a reliable, secure, low-cost and low-carbon energy supply.

These technologies could include energy storage at customer and network scale; further diversified power generation such as commercial and utility scale solar, bioenergy and wind power; strengthened interconnection with other states in order to increase the diversity of the electricity supply; demand response through reform of the current market and regulatory framework, and refining standards relating to the integration of renewable energy generation to promote more sophisticated network and system support services and interaction with the grid.

The CEC believes that although these solutions vary in their complexity, it is crucial that key stakeholders, including technology suppliers, networks, industry bodies and regulators, engage in a mature discussion around implementing and reforming these measures.

Image: Creative Commons Flickr Lawrence Murray

For additional information:

Clean Energy Council

The rise of Renewables in South Australia: Current state of play (CEC Report)

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