Aug 22 2019

Blowing hot and cold: Weather impacts on the NEM

With the energy transition underway in the National Electricity Market (NEM) it is expected that it will become more and more dependent on and subject to weather conditions. Previously the main impact from hot or cold weather was its direct impact on demand – either for cooling or heating homes. But an increased distribution of higher temperatures and more extreme heatwaves, as well as changes in the generation mix, are expected to have an impact on the NEM in a number of ways.

Based on analysis of performance data for the NEM over the past 20 years a Generator Report Card has been produced by Paul McArdle, from WattClarity, and Jonathon Dyson, Greenview Strategic Consulting. This has highlighted the potential impacts of the increasing influence of weather on our power supply. We take a closer look.

Impact of Higher Temperatures

Periods of higher temperatures will continue to drive up demand, particularly through our use of air conditioners, and supporting this peak demand will require lots of dispatchable generation. High temperatures reduce the performance of most types of generation, as well as the carrying capacity of the networks.

In terms of higher temperatures and its impact on different large-scale generation technologies, the report notes that:

  • Thermal plant (coal, gas and diesel) - all see their maximum capability limited due to reduced cooling efficiency at increasing temperatures. This is a more significant issue for air-cooled plants like Kogan Creek and Millmerran than it is for water-cooled power stations.
  • Solar PV – experiences an efficiency loss at higher temperatures, although based on the analysis this appears to have been mostly mitigated by over-sizing inverters and additional panels relative to other electrical components, such as transformers at the site.
  • Wind farms - have displayed some degradation in performance at higher temperatures because:
    • Some wind farms (particularly European designed) still have default high temperature cut-outs in place or may not have had additional cooling systems installed.
    • Localised transmission congestion has occurred, often when temperatures are high.
    • In some regions there is a strong correlation between high temperatures and low wind speeds resulting in lower output.
  • Battery storage – particularly large-scale lithium-ion requires its own cooling systems and at higher temperatures the power loads these systems will need to draw from the battery will increase.
  • Hydro – its maximum capacity is least affected by higher ambient temperatures

There has been additional concerns about increased unreliability of coal generators when temperatures are higher and over the past few summers there has been increased commentary and a higher focus on the performance of coal units on hotter days. The Generator Report Card looks at the past three years (2016-2018) to see if there is an indication of additional unit trips at higher temperatures (see figure 1).  The data pulled together “does not generally support the hypothesis that generation trips occur more during hotter weather”, although the authors note that there is still a strong and growing need to continue to monitor these types of metrics moving forward.

Figure 1:  Percentage of plant trips (black/brown coal) at Various Air Temperature Groups

Source: 2018 Generators Report Card

Note the difference in the shapes between black and brown coal shown in figure 1 is mainly just a reflection of the warmer average temperatures in Queensland/New South Wales compared to Victoria/South Australia.

Overall the report card notes that while there are well understood effects of high temperatures on plant outputs, it does not appear that plant failures as indicated by unit trips are disproportionately occurring at higher temperatures, contrary to some public commentary.

But given the consequences and impact of a plant trip is higher in hotter weather given higher demand, there is a greater focus on unit performance during times of heat stress. And in the case of coal and other more traditional plant this is likely to be compounded by the reductions in the amount of dispatchable plant available in the NEM.

Other Weather-Related Issues

High temperatures are not the only weather-related conditions the power system needs to be aware of and account for, the report card notes.

Drought and water management will be critical. The impact of recent droughts include:

  • The Millennium Drought 2000-2009, which impacted all the NEM’s hydro generators and led to some Queensland and NSW black coal stations being either restricted or placed into “mothballed” status, while Victorian generators also needed to carefully monitor and manage cooling water supplies.
  • The 2015 Tasmanian drought, when record low spring rainfall was compounded by a 6 month outage of the Basslink cable.
  • The 2017-2018 drought across much of NSW and south-eastern Australia which resulted in lower storage levels.

Wind and Solar

With over 6000MW of the NEM’s 8000MW of hydro capacity shared between Snowy Hydro and Hydro Tasmania,  their careful management of storage levels is critical.

The importance of wind and solar generation to both wholesale prices and power system forecasting in the NEM has been well understood for nearly 10 years, but will continue to increase, the report notes.

“In order to understand wind generation, wind speed, direction and humidity are combined with plant availability to produce an estimate of what can actually be delivered at any point in time. Similarly, wind turbines will generally commence operations at approximately 3 m/s wind speed and will need to cease operations between 23 – 28 m/s of sustained wind. Both humidity and wind direction can alter the efficiency of the wind harvesting process.

“For solar generation, time of day, time of year, humidity and irradiance are the key weather factors that must be well understood before energy production parameters from the panels or inverters can be considered.

“It is this continual understanding that the level of production from a wind or solar plant is so temporally linked to the prevailing weather conditions, that is both the opportunity and risk associated with renewable generation. While this may seem obvious, it reinforces the general lack of control of the primary energy source which is why many power systems around the world have struggled to integrate renewable generation.”

It reinforces the need for correct market structures. The report comments that even if battery storage is added to facilities, it is likely to provide backup only in the order of several hours rather than days.

Forecasting Becomes More Critical

The Generator Report Card notes that our forecasting of future events becomes increasingly weather-input related.

“Traditional methods have previously revolved around forecasting demand (with typical ‘feels-like’ temperature profiles), generator unit commitment (based on typical operating cost) and then matching supply and demand (given the above ‘energy-is-stored, ready-to-use’ suppliers) to determine an expected price given the prevailing network constraints. Random numbers were often added to calculate unknown forced outages for generators.”

This traditional method of forecasting is already starting to breakdown with a need for more sophisticated forecasting. The authors argue that the new method of forecasting should take into account:

  • weather and temporal conditions that will determine the likely level of rooftop solar PV and the maximum potential level of utility solar PV and wind generation;
  • the temporal ‘feels-like’ temperature based the prevailing weather, which will then be used to forecast likely demand and then need adjusting for the level of solar PV;
  • other less time-critical fuel source considerations such as gas availability and coal supply; and,
  • other seasonal impacts of weather such as maximum solar harvesting and rainfall patterns for run-of-river hydro, etc.

Finally all these parameters will need to be churned through forecasting models to determine likely spot outcomes, which in turn inform the contract market and risk profiles.

More on the Generator Report Card can be found here 

Related Analysis


Finding a better energy deal: It's easy to switch

Engaging with the retail market is remarkably easy, and for people with a smart meter on the eastern seaboard of Australia, choosing a new electricity retail offer can be a simple choice.

Nov 25 2021

Electricity price trends: Breaking down the costs

The AEMC’s residential electricity price trends report shows the ongoing fall in power prices for households. We take a look at the report, what’s behind the price reductions, and break down costs across the states.

Nov 25 2021

Are EVs an election battleground?

The Prime Minister Scott Morrison recently announced the Federal Government’s ‘Future Fuels and Vehicles Strategy’, which commits to spending $250 million on electric vehicle charging infrastructure as part of the push to net zero by 2050.

Nov 11 2021
Do you have a question or comment for AEC?

Send an email with your question or comment, and include your name and a short message and we'll get back to you shortly.

Call Us
+61 (3) 9205 3100