“The data is striking and the trend is unmistakable,” IEEFA’s director of energy policy, Australasia Tim King said yesterday.
He said data from the Australian Energy Market Operator showed SA’s overall installed capacity of renewable generation in the state consistently exceeded electricity demand already.
Residential rooftop solar in South Australia is expected to reach 28% penetration and the state has the most installed wind generation in all of Australia, with 1473 megawatts of onshore wind capacity, representing 25% of total generation capacity with an additional 2963MW of wind projects are planned.
The shift spells the end, sooner or later, of coal-fired generation, a reality that is already unfolding in Australia, King said.
“In June, Alinta Energy – which has 800,000 customers nationally – made news with the announcement that its sub-critical Flinders Operations Northern [554MW] and Playford B [240MW] power stations and its Leigh Creek coal mine would close by March 2018, maybe sooner,” he said.
“All three outfits had become increasingly uneconomic.”
The aging Playford B was always expected to be shuttered as it was the oldest coal-fired generator in the National Electricity Market.
The newer Northern station, however, was expected to be kept, although Alinta had incurred losses of $100 million over the past few years, while spending an additional $200 million in operations.
It was obviously a formula, the company acknowledged, that was unsustainable.
“The decline in demand for energy, as households have become more efficient and the number of industrial customers has declined, combined with policy settings designed to support significant growth in renewable energy generation have together had the effect of causing a significant oversupply of power available to South Australia,” King said.
Coal has gone from generating 13% of SA’s power demands to none today, however, gas is responsible for almost half of electricity generation, even with recent announcements that 719 megawatts of gas-fired generation will be withdrawn, likely to be replaced by wind and solar, which will rise from 35% of the market to 48%.
As AEMO notes, rooftop solar generation has already changed the shape of South Australia’s load profiles, with more demand being offset during the middle of the day, resulting in the minimum-demand time shifting from morning to midday.
Strong growth in rooftop solar is likely to continue in the state.
AEMO’s mid-case scenario forecast has it tripling over the next decade.
By 2025, output from rooftop solar is seen as exceeding consumer demand at midday on a minimum-demand day.
“Collectively, these trends suggest substantial periods in future years when coal-fired generators will not operate, perhaps having been mothballed or even permanently decommissioned,” King said.
“South Australia’s electricity, in other words, will be supplied predominately by renewable energy sources.
The expansion of the capacity of the Heywood Interconnector from 460MW to 650MW, which is scheduled for completion by mid-2016, will allow excess capacity from wind and solar generated electricity to be exported into Victoria.
Victoria gets more than half of its electricity from aging coal-fired plants, burning mostly low rank brown coal.
In the absence of any meaningful battery-storage gains, the key risk in these developments is in energy security.
The AEMO has concluded, however, that the SA power system could operate securely and reliably with a high percentage
of wind and rooftop-solar generation as long as either the Heywood Interconnector was operational and/or sufficient synchronous generation was connected and operating on the South Australian power system.
“The new-energy economy is unfolding quickly, and South Australia is setting an example
for the world,” King said.
There is, of course, movement on the storage front. Last week Tesla announced it was fast-tracking the roll-out of its battery storage product.
Australia will be its first market for the 7kWh household units.
The first deliveries had not been expected until well into 2017.
While Telsa is not the only battery storage maker in the market, or the cheapest, it is the best known brand, and its arrival could herald the biggest change to Australia’s electricity industry for decades.
Australia is a plumb market for Tesla, with 1.4 million homes boasting solar panels, with a combined 4400MW of generative capacity.
South Australia Power Networks boss Ron Stobbe said last year that the push to battery storage and the move to micro-grids could make centralised generation virtually redundant in Australia.
AGL has also announced plans to expand its battery storage business to retail and industrial customers.