In recent weeks, there has been plenty of discussion about the need to invest in new peaking power stations to balance out wind generation. Much of this discussion ignores the facts about how the National Electricity Market works. Here are the facts you need to know:
- Wind is a variable energy source. A wind farm over the course of a year is likely to have a capacity factor of around 35-45%. In other words, on average 35-45% of the rated capacity produces output at any point.
- The system operator, the Australian Energy Market Operator (AEMO), in forecasting the availability of plant in the market only allows wind capacity to contribute around 10% towards peak demand due to this variability.
- Accordingly, rather than building new peaking power stations, the contribution of wind is to displace combined cycle gas and coal at times of baseload demand.
- AGL and other modelling results confirm this. AGL’s most recent modelling shows that the addition of 10,000 MW of new renewable capacity reduces the amount of new gas-fired capacity required by 1,700 MW due to these impacts.
good insight!
Role of wind (and other renewables) prior to ETS should be understood. Media reports $47billion investment over next 5 years for distribution improvements to cope better with current and future peak ( increasing load factor). Use of wind and other sources to address some of this need is a great intersection of current and future strategy.
A similar finding was recently published by New Scientist on 26th July 2010.
http://www.newscientist.com/article/mg20727704.900-all-power-to-the-wind–it-cuts-your-electricity-bills.html
Wind does provide tangible benefits because of the way companies bid to produce energy in the market.
Some questions regarding your modelling.
10,000MW of wind is providing the capacity equivalent of 1,700MW of gas turbines, but is producing ~3,500MW energy equivalent. How should one interpret the gap? Does it lead to the gap of ~1,800MW being built as peaking plant rather than baseload plant, in a conceptual framework where the 10,000MW of wind is built progressively to meet load growth? Or does it mean that the energy output of the equivalent of ~1,800MW existing (fossil fuel) baseload plant is substituted by the wind energy?
Also does the ratio of 1,700MW to 10,000MW remain constant if it were 5,000MW of wind capacity or 20,000MW of wind capacity?
Just saw this one.
In terms of the low dependability of wind output (in terms of meeting peak demand) there are some surprising charts in Jonathan Dennis’ final report following his ES Cornwall scholarship here:
Jonathan Dennis’ final report http://escornwall.com.au/reports/final-report-jonathan-dennis.pdf
Jonathan looked at coincidence of wind right across Great Britain and found a great degree of correlation.
Recent data from South Australia demonstrates that there can be spikes in the spot price when wind generation is less than 100MW and the demand spikes. Demand spikes by an average of 200MW at he 11:30pm to midnight trading interval when the off-peak hotwater load is picked up. Compouding the issue is the mothballing of Playford B and Northern power stations (displaced by the impact of wind investment and falling demand). While Northern is scheduled to be opened during the spring/summer period Playford B is likely to remain closed unless spot prices are consistently high enough to justify firing the station up, given that it takes somewhere between 4 to 8 hours to boot up, the high spot prices may well and truly be over by the time the station is ready to generate or generate at maximum capacity.
The reality is that if the wind don’t blow the power don’t flow and given nice still 40 degree day wind is unlikely to do anything to reduce spikes in the spot price especially for those operations directly connected to the transmission system taking the spot price.