Future of the Australian Electricity Market

[Warb]

It is not an easy balancing act and investors want to go with the easy money.

I understand. What I don't understand is how we will ever transition to renewables under those circumstances. As you say, solar is for a limited time each day, and (from experience) on a cloudy day the production is minimal. Wind might (?) be more reliable, and can work at night, but again for much of the time it is probably nowhere near 100% nameplate capacity and sometimes near zero. Then there are long periods where neither is producing any significant power. That seems to mean that we need, as I said, a massive oversupply of generation and distribution capacity - but most of it won't be doing anything for much of the time. That's simply not profitable......

Storage could cover the shortfall, but that requires sufficient storage to cover a worst-case scenario, which in turn requires a sufficiently oversized generation system to both supply the user load AND recharge the now depleted storage (quickly enough to cover further poor generation periods). So both generation and storage sit idle until required by circumstances. That's not profitable either!

So, how's it going to work? I can't see how private investment, driven by profit, will ever build enough capacity. As soon as the $ income isn't reliable, surely they'll stop investing?

[FenceFurniture]

I would suggest that the Amber company's system that Fence Furniture uses could be much more widespread over the next few years (providing they still remain viable).

Well, I have an update on that, which I was going to post about earlier when you posted about yesterday's prices.

Amber sent me a text at 19:09 warning of a price spike. We had both split aircons going, and the problem was that I was in the shower getting ready for the Skype call, coupled with Amber being 39 minutes too late to warn of $1.78 /kWh for 30 mins from 18:30. Apparently that isn't a price spike worth texting about.

Then the proper spike happened at 19:00 (so the text was still late) and it was $4.73 pkWh, then a whopping $9.30 at 19:30, $2.65 and then $1.34 at 20:30.
That meant that we used 11.7 kWh yesterday where we normally use 5-9 per day, and yesterday's usage price was $14.42 for general usage. That is sick!

This is the graph so far this month:
Capture.JPG



For the first two months Amber was less overall than Origin's "We love you so much, we'll run you at a loss":
Sept 18.7% less, Oct 15.2% less
Then, as things got warmer, that changed:
Nov 8.4% more, Dec 4.5% more.

Origin's "We think you're an ignorant idiot" rates are always 22-28% more than their "We love you" rates.

To sum up, given that Origin's rates haven't gone up for six months, it's watch and see. Two months don't make a trend, and one bad day isn't a deal breaker. We'll see.

[Bushmiller]

I understand. What I don't understand is how we will ever transition to renewables under those circumstances. As you say, solar is for a limited time each day, and (from experience) on a cloudy day the production is minimal. Wind might (?) be more reliable, and can work at night, but again for much of the time it is probably nowhere near 100% nameplate capacity and sometimes near zero. Then there are long periods where neither is producing any significant power. That seems to mean that we need, as I said, a massive oversupply of generation and distribution capacity - but most of it won't be doing anything for much of the time. That's simply not profitable......

Storage could cover the shortfall, but that requires sufficient storage to cover a worst-case scenario, which in turn requires a sufficiently oversized generation system to both supply the user load AND recharge the now depleted storage (quickly enough to cover further poor generation periods). So both generation and storage sit idle until required by circumstances. That's not profitable either!

So, how's it going to work? I can't see how private investment, driven by profit, will ever build enough capacity. As soon as the $ income isn't reliable, surely they'll stop investing?

Warb

Yes to all of that. As I said, transition is a balancing act which nobody has come close to getting right so far, primarily because there is no co-ordination through the various governments and certainly not from the private investors. We have to remember that at the moment the solar farms enjoy a guaranteed price of $40/MWhr. I am not sure if wind also gets this guaranteed subsidy. Without this, renewables may well have been a non-starter. In fact, the subsidy has only relatively recently been reduced.

It is not a level playing field yet.

Regards
Paul

[FenceFurniture]

While I was assembling that post I noticed that the price had gone negative (-34c) and then changed to -17c a few minutes ago. Apparently it will still be -38c from 19:00 to 19:30.
So I went around and turned on every light, mini-oven big oven, desk hi-fi just idling (nah, bugger it I'll play some tunes – something with heaps of bass to get the sub cracking), aircon to 25°, down to the shed, all lights on, thicknesser, dusty, all running. I am determined to claw back some of yesterday's fiasco!

How king ridiculous is that eh?

Footnote: From 19:00 the price was supposed to still be -ve but it changed to 53c so I had to race around and turn everything off.
Well that lasted for about 3 minutes and it went back to -ve again, so off I raced again.
I swear they must be doing this just to wear me out. That's the last I'll be doing that though – it's a dumb game.

[FenceFurniture]

transition is a balancing act which nobody has come close to getting right so far, primarily because there is no co-ordination through the various governments and certainly not from the private investors.

Yeah.
And we're minimum 10 years behind where we should be.

[havabeer69]

the old Munmorah Power Staion is in the background:

Attachment 534651 P.

ummm I'm pretty sure you'll find that's the 4x gas units of the colongra power station in the background (built at the back of the station and sold for around 230mill a hand full of years ago after costing around 500mill to build) it was basically built a huge insurance policy if the rest of the stations couldn't meet their demand

ironically that gas plant can only run for about 12 hours max (at full load) as it taps off the main gas line from newcastle to sydney. its basically has a big set of pipes underground that loop back on its self as storage... the problem is if they ever want to top it up or for some reason run longer then 12 hours they have to ask the transmission company as it would drain off the pressure in the mains causing mass gas problems in sydney.... so it actually takes around 12 hours to fill the thing back up again.

[FenceFurniture]

ummm I'm pretty sure you'll find that's the 4x gas units of the colongra power station in the background

I think this might be spot on. If you have a look at Maps aerial view, the four gas units match up, AND the picture in Graeme's post show the units in almost total broadside, so the battery must be south-west of the old PS. That means the old PS has been eliminated from that pic (or it's to be built right on top of it....possible?).

[havabeer69]

I think this might be spot on. If you have a look at Maps aerial view, the four gas units match up, AND the picture in Graeme's post show the units in almost total broadside, so the battery must be south-west of the old PS. That means the old PS has been eliminated from that pic (or it's to be built right on top of it....possible?).

well yeah the decommission of Munmorah started in like 2012... I know this because I did 6 months there as an apprentice... decommissioning it. (mainly draining oils from things nothing overly exciting.)

[Bushmiller]

well yeah the decommission of Munmorah started in like 2012... I know this because I did 6 months there as an apprentice... decommissioning it. (mainly draining oils from things nothing overly exciting.)

HAB

Apprentices rarely get the plumb jobs!

Thanks for the demolition video. Most interesting.

Just for comparison, the video referenced the "massive" nature of the units. There were 4 x 350MW generators. I consider the two units at Millmerran small being only 425MW each. Times change. One interesting aspect of Munmorah was that the boilers were unusual. We called them "upside down" boilers.

Regards
Paul

[Bushmiller]

There is a little more information on Munmorah in this article

Munmorah Power Station - Engineering Heritage Australia (engineersaustralia.org.au)

In terms of geographical size from the above:

" Not including the ash disposal and associated coalmines the Munmorah site covered approximately 570 hectares. "

So not really that small. I am sure BobL was correct when he said he thought the locals would be pleased it is gone and substituted by solar panels.

Regards
Paul

[russ57]

While I was assembling that post I noticed that the price had gone negative (-34c) and then changed to -17c a few minutes ago. Apparently it will still be -38c from 19:00 to 19:30.
So I went around and turned on every light, mini-oven big oven, desk hi-fi just idling (nah, bugger it I'll play some tunes – something with heaps of bass to get the sub cracking), aircon to 25°, down to the shed, all lights on, thicknesser, dusty, all running. I am determined to claw back some of yesterday's fiasco!

How king ridiculous is that eh?

Footnote: From 19:00 the price was supposed to still be -ve but it changed to 53c so I had to race around and turn everything off.
Well that lasted for about 3 minutes and it went back to -ve again, so off I raced again.
I swear they must be doing this just to wear me out. That's the last I'll be doing that though – it's a dumb game.

In Vic, although pricing is in 5 min intervals, billing is still in 30m intervals. I now ignore negative prices unless they are really neg( eg 40c or more) and sustained. (more than 30 minutes) what I believe happens is they go neg, some generator says sod this and removes supply. So then price goes up again quite quickly.
As far as spikes go, you can set a threshold for notification in the app, i set it at 1.00
(i also now run off battery from 3pm to at least 9pm which both avoids nearly all spikes, and primarily avoids ausnet peak network charges)

[Warb]

How king ridiculous is that eh?

I swear they must be doing this just to wear me out. That's the last I'll be doing that though – it's a dumb game.

Just a thought.... I believe Amber has an API to access their current price (and historical, forecast etc.). If the prices are now regularly going -ve, could you not leverage that API, using Home Assistant or some other automation system, and just switch on an old electric heater or three at any time it becomes profitable to burn power?

Obviously the ideal solution would be to have a battery/charger/inverter and be paid to store the power, then use it when the price goes +ve again, but that would require capital to set up. Home Assistant (free, last I checked) running on a Raspberry Pi (cheap) with a cheap switch (like a TP-Link Tapo, as long as Home Assistant supports it!) would enable automated "unnecessary power usage"...

For the common good, we need people like you to use the excess power, make the generators profitable and thus encourage the building of more renewable power plants. Err... I think....

[FenceFurniture]

The problem is, that as Russ points out, the pricing is in 5 minute intervals and then averaged for a 30 min billing block. Within that 30min block it can be +ve, -ve, etc. On the day in question it was -ve then 53c, then -ve again snaking back towards +ve, then 2c.

TBH, I think any capital investment in a Pi or anything else would take a fair while to break even, and that was the first time in 5 months that I've seen it -ve. No doubt it has been before but I must have been doing something other than staring at the Amber page! (I only happened to see it the other day because that page just happened to be the selected tab).

[Bushmiller]

While I was assembling that post I noticed that the price had gone negative (-34c) and then changed to -17c a few minutes ago. Apparently it will still be -38c from 19:00 to 19:30.
So I went around and turned on every light, mini-oven big oven, desk hi-fi just idling (nah, bugger it I'll play some tunes – something with heaps of bass to get the sub cracking), aircon to 25°, down to the shed, all lights on, thicknesser, dusty, all running. I am determined to claw back some of yesterday's fiasco!

How king ridiculous is that eh?

Footnote: From 19:00 the price was supposed to still be -ve but it changed to 53c so I had to race around and turn everything off.
Well that lasted for about 3 minutes and it went back to -ve again, so off I raced again.
I swear they must be doing this just to wear me out. That's the last I'll be doing that though – it's a dumb game.

FF

Welcome to the antics of the wholesale market.

In fact you are better off than us in so far as you can switch off and turn on a device at 186,000 miles/sec. Well, you yourself might not be quite as quick as that, but the switch is (once activated). We ramp at speeds a lot less than that. It might take us half an hour or an hour to change significant load.

You may need to invest in a few more of those point and click on/off devices I seem to remember you had.

Having said all that, AEMO quoted yesterday how prices for Q4 in 2023 had almost halved compared to Q4 2022.

AEMO renewables down for last quarter.png

That sounds fairly encouraging, but don't go out and buy your Ferrari just yet. I did a quick calculation on the spot market averages this year so far.

The Spot price has averaged $155/MWhr for the 25 days of January despite negative prices at some point on most (but not all) days. The spot price became noticeably elevated around 8 January. Up until then the average was $53. The next 18 days averaged $195/MW hr.

I should point out that AEMO were quoting national figures while I have quoted QLD prices. However, QLD tends to have the lowest prices of the Eastern states so probably not too far off the money. It remains to be seen how prices this quarter compare to Q1 2023. Averages for the Q1 in 2022 and 2023 were about $80 and $75 respectively (interpreted from AEMO's graph). On that basis we have a way to go even to only be twice as expensive as previous quarters. We should also remember that any change in pricing tends to have a long period before it filters down to the consumer. Retail prices might not increase, but whether they reduce is something on which I am not prepared to wager body parts. I feel that retailers will be hedging their bets for some time yet. Price reductions will only eventuate by changing providers.

I have the impression that AEMO are not reckoning on the great unwashed looking closely at the figures.

Regards
Paul

[ian]

I presume that the market for this stored electricity is largely in Sydney which is about 100 kms away, with inherent transmission losses. If the battery farm is commercially viable, would it not be even more viable if located closer to its market?

Have you studied Sydney land prices recently?

Almost all land south of Munmorah is either national park (i.e. don't event think of developing a battery farm on it) or residential (existing or potential).
The cost of transmitting power from Munmorah to Sydney is less then trivial compared to actually trying to get approval -- let alone purchase the land required -- to locate the battery closer to it's market.