Market operator says grid can accommodate more wind & solar with the right regulation

The Australian Energy Market Operator has denied claims Australia cannot accommodate any more wind and solar, and says the main challenge will be in designing the appropriate market signals and regulation.

“Rules and regulations that govern this industry have been designed in a different era,” said Frank Montiel, executive officer of markets at AEMO at a conference hosted by the Energy Networks Association in Brisbane last Wednesday.

“So we need to adapt. We need to see where the new technical solutions may lie, and ensure that the framework is flexible enough to accommodate them.”

Montiel says there are numerous possible solutions to accommodate wind and solar, including battery storage in homes and at grid level, using wind farms to provide frequency control and other ancillary services, as they do oversees.

“We are convinced that the potential technical solutions are about. But it is difficult to encourage them if we can’t change regulations.”

Montiel’s comments echo those of leading economist Ross Garnaut, who said that grid-scale battery storage technology is ready to go in Australia.

What has not yet been unlocked in the Australian market is the value of storage to the wholesale energy market, and providing the ancillary services to keep the grid stable as more coal generation is retired and gas-fired plants become too costly to run.

This is the subject of various rule changes being considered by the market regulators, such as the switch to 5 minute settlement from 30 minute settlement  to encourage fast response technology – though this particular rule change is being resisted by the owners of coal and gas generators.

AEMO is to release an update on its analysis of the sort of market and regulatory mechanisms needed to encourage the technology to address these issues.

© 2016 Solar Choice Pty Ltd

Jeff Sykes