Solar power is incontrovertibly having an impact on the Australian electricity market. For renewable energy advocates, the performance of the nation’s ‘people’s power plant’–now spread across nearly 2 million roofs–over the past few days of extreme temperatures is proof of how distributed solar PV technology can benefit the electricity grid and ultimately save all electricity consumers money on power bills. It should be reality check for those who see widespread uptake of renewables as more threat than opportunity.
Here’s a short summary of what happened: On Wednesday last week, AEMO issued a warning that, due to extreme temperatures particularly in SA and Victoria and the associated increased usage of power-hungry AC units, electricity demand was would spike dramatically in the early afternoon, with an estimated 290MW deficit in electricity supply, causing AEMO to call issue a call for “Emergency and Reserve Trader Contracts”–an ‘extremely rare event’ according to the WattClarity website. The anticipated level of demand was expected to break the National Electricity Market’s (NEM’s) all-time high.
In the end, demand peaked at just under the previous record, and analysis published by Kerry Burke as well as the WattClarity website point to the rise of rooftop solar over the past few years as one of the reasons for this. In Victoria, as John Grimes of the Australian Solar Council points out, rooftop solar shaved about 2.8% off of what would have been the peak demand. In South Australia this number was closer to 10%, and around 9% in WA and Queensland. In NSW it was around 3.5%.
WattClarity notes that emergency demand response (load shedding) among other factors also played a crucial role in averting a new peak, but this drives home the fact that the extra, distributed capacity in the grid (i.e. solar) helped to keep the peak from going higher. On Wednesday, wholesale electricity prices skyrocketed as reserve generation capacity grew scarcer. They would have been even higher if not for the solar capacity.
Meeting ever-escalating peak demand is expensive for all electricity consumers–even if peak demand events only happen on occasion. The cost of building this capacity ends up being spread across all power bills. Solar PV, by generating electricity during parts of the day when it is frequently needed most during peak events–in early to late afternoon–cuts down on the need for conventional centralised power plants to ramp up production.
“As a community we should be congratulating those people who have made a significant personal investment in installing solar PV, which is now paying dividends for the entire community,” said Mr Grimes of the Solar Council. “Because solar PV produces electricity where it is used, and does not need vast network infrastructure, the power that is produced is all being used to best effect, which adds up to a big saving for solar.”
The story is of course more complicated that this–subsidies for solar power mean that solar PV system also drive up the cost of electricity for everyone who is connected to the grid. But it also goes to show that 1) distributed solar can and does play a useful role in Australia’s electricity market, and 2) the benefits that the technology brings are shared by all electricity consumers–not just those who have solar panels.
One online commenter summed up the situation for solar PV system owners rather blithely: “Yesterday, the wholesale price of electricity in SA reached $13.00 per kWh due to the heatwave. Our solar system exported 30kWh to the grid. This was worth about $300 at wholesale prices. My retailer paid me $7.25 for it. Who is subsidizing who exactly?”
Top image via the Australian Bureau of Meteorology
© 2014 Solar Choice Pty Ltd
He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.
James lives in Newcastle in a house with a weird solar system.
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