South Australia experiences dramatic fall in energy costs after gas deal
South Australia’s renewables-heavy electricity market has been turned upside down, moving from importing power to exporting it, and from having some the most expensive wholesale prices in the country to having some of the cheapest.
And all that appears to be a result of one gas deal secured by a generator that was blamed by many as a major cause of a blackout in South Australia in February.
Dylan McConnell, an energy expert from the University of Melbourne who produced the analysis, says the switch is a result of the closure of the huge Hazelwood coal power station in Victoria. But the delay between its closure in March and the extra generation in South Australia coming on in July shows the need for a more orderly transition from fossil fuels, with more notice of closure required.
Renewables-heavy South Australia has been at the centre of national debate over energy policy after a number of blackouts last summer. In one of those blackouts, the state did not have enough supply to meet demand, and to protect infrastructure, the Australian Energy Market Operator ordered transmission be cut to 40,000 homes.
All through that blackout, one of the two generators at the Pelican Point gas generator – one of the newest and most efficient in the country – sat idle, despite repeated requests from Aemo for generators to come online to meet the demand. By the time Aemo considered ordering the plant to generate electricity, it was too late, and “load shedding” was required.
In the six months before that, and the year following, South Australia had energy prices that were among the most expensive on the mainland. A price spike in July 2016 led to calls for a national inquiry into the amount of renewables in the state. Those calls came despite half of the generation units at the Pelican Point gas generator continuing to be mothballed and bigger price spikes in other states including coal-heavy Queensland being mostly ignored.
But since July South Australia’s fate has changed. Prices in the state have been dropping, first dipping below coal-rich Victoria’s prices, and then becoming the second cheapest on the mainland (after Western Australia) for the past two months.
McConnell examined the state’s generation profile over the past year, and found the shift appears to be caused by Pelican Point doubling its output after securing a gas deal to operate its second turbine.
Before June, Pelican Point was almost exclusively running just one of its two units, and operating that one only intermittently to supply peak demand. From around the middle of the year, it began operating its first unit consistently, and began regularly operating the second unit too.
Plotting the average output of Pelican Point by the day of week, McConnell found the station was producing between two and three times as much electricity in the second half of the year.
About the same time, McConnell found, the interconnector that transfers electricity between South Australia and Victoria switched from mostly importing power to South Australia to mostly exporting it.
McConnell said the increased supply from Pelican Point was probably the most significant factor pushing prices down in South Australia.
The operation of Pelican Point’s second generation unit was enabled by a gas supply deal struck between its owner, Engie, and Origin Energy in March.
The deal came amid significant pressure from the federal government, which claimed credit for the deal, but it had reportedly been under negotiation for months.
McConnell said it was likely that the only reason Pelican Point could profitably run the plant was because of the closure of Hazelwood in March, which withdrew a huge amount of supply from the market. But the fact that it took until July for that power to be supplied showed it was important to get some sort of measure in place forcing more notice of closure.
“In the case of Hazelwood shutting, which quite directly affects South Australia, if that was announced six months before it actually closed … that extra capacity could have been ready,” he said. “It shows the need for having some sort of plan in place to manage the withdrawal of capacity like Hazelwood.”
The federal government has said it accepted a recommendation in the Finkel review, which called for a three-year notice period of closure for large power plants.
( 译者：吴广慧 审校：国依依 )