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Both AGL, Origin warn renewables threaten grid, create chaos, drive off baseload, cause higher cost

Another Hazelwood-size batch of renewables coming on line in Australia by 2020.

Wind turbines

That’s 1600MW of random subsidized energy dropping into a market that is artificially priced to value weather-changing potential over reliability. Now, even the bosses of two gentailers which both benefit from renewables subsidies are warning things are chaotic, going to get turbulent and more expensive. Why do they admit this? Probably because they want the government to add another layer of policy interference to reward “firm capacity” which they both also own.

Instead, lets get the government and the RET octopus off our grid. Surely we can set up a market that allows players who want electricity at 9am tomorrow to pay more for generators which can actually guarantee to be there. All the market players who don’t care when or if electricity arrives can buy the unreliable energy. Which businesses, industries or homes can use electricity that arrives at midday and random other times, remembering that wind power drops to 5% of capacity for days sometimes:

Renewables threaten volatile power supply, says AGL, Origin bosses

Perry Williams, Matt Chambers, The Australian

Power giants AGL Energy and Origin Energy have raised concerns over a surge of wind and solar generation creating a new wave of volatility in Australia’s electricity grid due to a lack of firm capacity to back it up.

“I think there is increasing risk within the national electricity market because the lack of a good mechanism means the firming generation that’s needed is not being built as quickly as the renewable generation is being built,” AGL’s interim chief executive Brett Redman told The Australian.

“That does start to drive towards a lot of volatility in the market and volatility is the enemy of existing baseload generation.”

Solar Farm, photo.

Solar Farm, Canberra

Brett Redman — AGL’s interim chief —  says there is a risk things will get “choppy” in the next ten years:

“And choppiness or turbulence is a different way of saying higher cost.”

Origin Boss, Frank Calabria said $10b in new solar was already approved, which could be built in 18 months:

…this was a problem because it had not been coupled with a policy that recognised the intermittency of renewables, as recent problems in South Australia had illustrated.

Spot the contradiction, renewables are “low cost” but the turbulence they add brings “higher cost”. Our market is screwed:

“Lower-cost renewables tend to push the higher-cost sources of dispatchable power – coal and gas – out of the market early,” Mr Calabria said.

“Today, we see several markets where the prices are hollowing out, sometimes to zero, in the middle of the day …this is exactly what we say as a lead-up to (the closure) of ageing plant like Hazelwood and Northern.”

They want more government interference to compensate for too much government interference:

“Until the politicians realise that to get to those targets they need a firm firming capacity – and they are nowhere near that at the moment – the market will be in chaos and that’s where it’s at.”


Grid at Sunset on the road to Queanbeyan, Jo Nova 2018

Photos copyright Jo Nova 2018

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