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May 09 2016

South Australia - The accidental experiment continues

South Australia leads the world in the integration of renewable energy into large electricity grids, bringing with it lower greenhouse emissions, increased risks and higher costs, the energy industry said today.

The Northern Power Station at Port Augusta has been rendered uneconomic by more than 40 per cent of new renewable energy now operating in the State.

Australian Energy Council Chief Executive, Matthew Warren, said the plant closure was the latest step in the “accidental experiment” occurring in South Australia.

“South Australia has become a global test case for what happens when around 41 per cent of electricity generation comes from intermittent sources like wind and solar, displacing older, 24/7, high emissions power stations,” Mr Warren said.

“Although renewables penetration in South Australia is the product of both State and Federal Government decisions, policymakers did not plan to have such a high level of integration concentrated in one region of the grid so quickly.

“Technologies like wind and solar do not work in the same way as conventional power stations.  It is not a like-for-like replacement.  Modern electricity grids still need to have enough energy to meet highly fluctuating demand throughout each day and each year, and to be able to manage a stable and safe power quality as all of these fluctuations occur.

“The closure of Northern means South Australia is now more reliant on fewer sources for these important functions – namely its remaining fossil fuel generators and the interconnector to Victoria.  We are also seeing higher baseload prices into the future as you would expect when one of the major suppliers exits the market.

“Integrating renewables safely and reliably into the grid is an important technical challenge that we must solve if we are to decarbonise our energy systems.  But it is not without risks or costs.”

 

About the Australian Energy Council

The Council represents 22 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.

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