Will the lights go out in Victoria or just industry?

The government of Victoria has a target of 40 % renewable electricity by 2025. This would require the construction of new wind farms with a total capacity of some 7000 to 8000 MW. A more modest approach is taken here by analyzing the consequences of an extra 4000 MW of wind power, about the equivalent of removing the Hazelwood power station, and looking at what might happen following the example of South Australia.

There are two difficulties, intermittency and the same winds blowing across state borders causing correlated variations in the supply of wind power.

Victorian generators are presently supplying the balancing power to the South Australian electricity market with as much as 800 MW and in return very occasionally South Australian wind farms send their surplus back to Victoria. This can be seen in Figure 1 where the two interconnectors, Heywood and Murraylink, can be seen supplying power when there is little wind in South Australia.

Figure 1:30 minute supply from South Australian wind farms and two Victorian interconnectors, Heywood (600 MW) and Murraylink (200 MW), for part of September 2016. At times, usually in the early morning, wind power is sent into the Victorian electricity market (as shown by the negative-going excursions in the Heywood and Murraylink curves above).

There is a clear correlation of wind farm output between South Australia and Victoria. In statistical terms it is 40% and given the already wide geographical spread of the present wind farms in Victoria then building more there should not make a significant difference to this correlation.

Figure 2:30 minute wind farm power output for September 2016 for South Australia with 1576 MW of installed capacity, and Victoria with 1242 MW of installed capacity.

So if Victoria increases its wind farm capacity what might be expected for the physical and economic performance of coal burning base load power stations?

Firstly, the present performance, shown in the table below, indicates that wind farms generate on average only some 30% of their rated capacity and even this value varies through the year. Secondly, the fossil fuel using generators have a very different utilisation in South Australia compared to Victoria. Base load generators that deliver low cost power need to operate for most of the time and this is the case for Victoria. But the large supply of power from wind farms has destroyed the ability of the gas fed generators in South Australia to act as base load suppliers of power and so require higher prices for the delivery of power.

So the impact of more wind farms in Victoria can be assessed by using the example of South Australia. This is best examined by looking at the 24 hour pattern of demand and the accompanying wind farm supply. This pattern for 30 minute intervals is shown in Figure 3 for September 2016. The average wind output for South Australia is about 50% of the lowest demand in the early morning while for Victoria wind supply is less than 10% of the lowest demand.

Figure 3:Average demand and wind supply in 30 minute intervals for 1 – 27 September 2016 for South Australia and 1 – 30 September for Victoria.

There appears to be a position for base load power in South Australia but this is closed off by the intermittent wind farm output. This is best shown by looking at the average demand and the wind farm maximum and minimum output plotted in Figure 4 where wind output can exceed demand on occasions as noted in Figure 1 where power is exported from South Australia to Victoria. These exports are at times of low demand in the early morning and serve to disrupt base load operation in Victoria.

Figure 4:Weekday and weekend demand and maximum and minimum wind supply for 1576 MW in 30 minute intervals for 1 – 27 September 2016 for South Australia.

For Victoria if a further 4000 MW of wind farms is added to supply then a situation similar to that of South Australia is possible as is shown in Figure 5. The maximum wind farm output is nearing the demand minimum and in addition the interconnectors to South Australia will add an extra intermittent need for power.

Figure 5:Weekday and weekend demand and maximum and minimum wind supply for 1242 MW and 5242 MW installed capacity in 30 minute intervals for 1 – 30 September 2016 for Victoria.

So for Victoria variations of supply will approach the situation in South Australia for load following. This would require the Victorian generators to cope with correlated variations in South Australia and Victoria with variations of as much as 3000 MW. Although the installed capacity of wind farms in New South Wales is only some 500 MW, these will also have a degree of correlation with the southern states so the system will need to be able to handle 4000 MW variations. This is the key question as load-following generators were developed to handle demand changes of 10's of MW per minute but, with the projected increase in wind farm installed capacity, the short term supply changes may increase to a requirement of 100's of MW per minute. The creation of more interstate transmission lines may not help when simultaneous variations in wind farm output occur in all the States.

The conclusion for the proposed Victorian increase in wind supply is that it will very much reduce the ability of the base load generators to supply low cost power but the government intention is to drive coal burning generators from the electricity market. This will add to industry costs and may drive some to seek lower cost power elsewhere. Worse may follow from the inherent instability of a system with a large supply of renewable energy. Industries needing reliable power may not be confident of its delivery or long term costs and as a consequence not establish or expand their operations in Victoria.

The real distortion to the system is the treatment of wind generated power. It is described as non-dispatchable (although some wind farms are now termed semi-dispatchable) as it must be used when generated. Wind farms do not bid a price into the wholesale market but rather take what is on offer and in addition collect a legislated subsidy of around $70 to $90 per MWh from distributors who pass this cost on to the users. The consequence of this is a distortion of the market that drives out high priced generators, such as the cleaner gas-fired plant, whose actual operating costs are less than the subsidy paid to the wind farms.