What do we want? Expensive energy!

[classical_hero]

http://www.abc.net.au/worldtoday/content/2016/s4500493.htm

NICK GRIMM: The South Australian Government has been forced to ask a power station to produce more energy because some of the state's biggest businesses were facing temporary shut downs in the face of wild fluctuations in electricity prices.

The state's treasurer says a range of issues have contributed to the problem including delays to an upgrade of an interconnector with Victoria.

South Australia is more reliant on other states for base load power after its last coal-fired power station closed down earlier this year.

The Opposition has blamed the state's reliance on renewable energy for the soaring prices, something the Government there rejects.

No baseload power leads to this situation of massive price fluctuations that will basically ruin business, which has already happened in the state.

TOM KOUTSANTONIS: Well, there is some dramatic fluctuations in pricing. The pricing can go somewhere between minus $1,000 where they're being paid to take electricity up to $1,600 a megawatt hour.

Now no business can run on that type of fluctuation of nearly $2,600.

So to manage their demand and their supply, they needed to have consistent pricing across a whole range of times rather than just the spot price.

But how can you "manage" the situation without a proper base load strategy, but their reliance on renewable energy is at fault. But even then the numbers are peaking at terribly high numbers such as $14,000/MWh

NATALIE WHITING: But the Opposition has blamed the state's reliance on renewable energy.

The last coal fired power station closed earlier this year, in part because it couldn't compete with renewable energy.

The Opposition leader, Steven Marshall, has taken aim at the state's large solar and wind supply.

STEVEN MARSHALL: The Government's complete and utter obsession with renewable energy has left us in a very vulnerable state without a workable energy strategy.

I mean continuity of energy supply is absolutely critical, and what we've done is we've driven out base load power in South Australia because of this obsession that the Labor Government has had with renewable energy and we haven't been able to put that certainty, that continuity into the equation.

Welcome to a world that relies on unreliable energy that is renewable energy. It's a mad world we are living in.

 

[Old Hippy]

http://www.abc.net.au/worldtoday/content/2016/s4500493.htm


No baseload power leads to this situation of massive price fluctuations that will basically ruin business, which has already happened in the state.


But how can you "manage" the situation without a proper base load strategy, but their reliance on renewable energy is at fault. But even then the numbers are peaking at terribly high numbers such as $14,000/MWh

that's what happens when conservative right wing governments sell off state assets to Chinese brothers one of whom was jailed for corruption in Hong Kong they don't invest in the long term infrastructure required or actually lodge Australian tax returns this attitude can ruin business which CL notes is already happening due to these shonky privatisation sales

the same can be seen with SA water still owned by the Gov. but run by this mob due to right wing conservative ideology in 1999

United Water is a consortia of three companies:
• Veolia Water - the world's largest water services company and is the water division of Veolia Environment.
• Thames Water - the UK's largest water company, providing water and wastewater services to 13 million people in Southern England and 43 million people worldwide.
• Halliburton KBR - a leader in engineering, planning and project management in the Asia Pacific region.
its making record profits another thing that impacts on business nowadays

 

[Gigaz]

There are a number of practical solutions for the problem or energy price fluctuations, which all basically come down to saving the energy for later when it is cheap. So I'm confident that the Australians can make that happen.

 

[Arwon]

It's cute how they're pretending the South Australian electricity market was more stable before the penetration of wind power. Used to be the critical peak pricing periods were all caused by very hot days, of course.

 

[Kaitzilla]

It's cute how they're pretending the South Australian electricity market was more stable before the penetration of wind power. Used to be the critical peak pricing periods were all caused by very hot days, of course.

If a utility is scrambling to restart a mothballed power plant, isn't that even a tiny indication that there might be a problem?


Also, if you look at some price history, the era of coal power did have more stable prices.
http://www.aemo.com.au/Electricity/Data/Price-and-Demand/Average-Price-Tables

June 2006 (South Australia)
Regional Reference Price ($/MWh)
http://www.aemo.com.au/Electricity/...ly-Price-Tables-0505to0708?year=2006&month=06

June 1st 32.66 (This is 3.266 cents per kilowatt hour I think)
June 2nd 34.89
June 3rd 29.12
June 4th 29.83
June 5th 41.28
June 6th 37.39
June 7th 42.45
June 8th 36.29
June 9th 35.23
June 10th 33.96
June 11th 31.72
June 12th 32.57
June 13th 41.08
June 14th 49.51
June 15th 50.83
June 16th 46.81
June 17th 37.99
June 18th 34.53
June 19th 52.72
June 20th 51.62
June 21st 45.94
June 22nd 37.40
June 23rd 36.28
June 24th 32.82
June 25th 30.74
June 26th 41.27
June 27th 46.47
June 28th 37.81
June 29th 41.87
June 30th 43.40

June 2016 (South Australia)
Regional Reference Price ($/MWh)
http://www.aemo.com.au/Electricity/...-Tables/Daily-Price-Tables?year=2016&month=06

June 1st 189.42
June 2nd 213.16
June 3rd 198.15
June 4th 151.36
June 5th 110.15
June 6th 102.95
June 7th 120.67
June 8th 89.80
June 9th 54.25
June 10th 53.81
June 11th 87.44
June 12th 99.60
June 13th 106.21
June 14th 110.51
June 15th 101.85
June 16th 99.26
June 17th 126.09
June 18th 71.05
June 19th 103.53
June 20th 128.58
June 21st 63.46
June 22nd 73.58
June 23rd 81.61
June 24th 100.24
June 25th 165.16
June 26th 142.52
June 27th 226.37
June 28th 288.02
June 29th 110.24
June 30th 123.96


Coal use appeared to be 35% or 36% of total power generation in 2006 for South Australia.
https://yes2renewables.files.wordpress.com/2011/12/sa-energy-breakdown_from-aemo.jpg

Today it is 0%.
http://reneweconomy.com.au/2016/las...nerator-in-south-australia-switched-off-88308

 

[Senethro]

It always astounds me how conservatives disregard property rights with their being pro-pollution, and refuse to include clean up costs in their pricing of anything.

As if things just clean up themselves with no effort!

 

[Arwon]

Oi Kat, You're aware June is the middle of winter right? Check out January 2007 where there's days the average daily price hits $800 and $1300 due to heat induced demand in a shallow and easily cornered market that let generators bid literally the wholesale price cap whenever the days got quite hot. Now the only times prices hit critical peaks are periods of zero wind. Those tend to be rarer.

I would also suggest Northern might reopen because Alinta see some profit in it where previously they didn't. Although Alinta have been pretty categorical that there's no long term place in the market for an old and inflexible brown coal power plant, maybe until the interconnect is upgraded they still see a bit more money to be made. Who knows? South Australia has always been a relatively isolated and easily cornered market ever since the NEM started.

As for right now, the prices have spiked all across the NEM which kind of torches the "blame wind power" theory. One big culprit is that the east coast gas market is newly hooked up to export terminals in Queensland. This means domestic gas supply on the east coast is now connected to the world market where natural gas is twice the price as the domestic price previously was.

 

[Kaitzilla]

Oi Kat, You're aware June is the middle of winter right?...

Doh!

Even still, in the winter there should be less demand spikes, so why are the prices all over the place in winter 2016 and not winter 2006?
I suppose price turbulence from natural gas opening up to world market forces could be some of it.

 

[Arwon]

They're up all over the NEM. As I said above, natural gas becoming connected, via the new Gladstone export terminal, to the world market is one huge factor. SA is connected to that market through the Moomba exchange so will be feeling that competitive pressure like the eastern states.

There has also been a shedding of surplus capacity around the country because over the last few years electricity demand has unexpectedly peaked and flattened then declined over recent years. So closures of old plants have happened because generator companies (who mostly own many assets) are hoping their remaining assets can turn a profit if supply is more constrained.

In Queensland they're also talking about the concentrated duopolistic ownership that's been allowed to occur pushing prices up via their bidding behaviour.

And in SA particularly there's been delays to the interconnect upgrade that leaves the market there more isolated than everyone would have been expecting.

 

[Cutlass]

Doh!

Even still, in the winter there should be less demand spikes, so why are the prices all over the place in 2016 and not 2006?
I suppose price turbulence from natural gas opening up to world market forces could be some of it.

Volatility in energy markets is the norm, not an exception. Unless it's heavily price regulated.

 

[Arwon]

And it should be noted the wholesale electricity market is not price regulated. Daily and monthly average prices represent what the market participants collectively agree to sell at (ie, the level at which they make money) with a given level and distribution of demand.

Also, a look at what the components of electricity bills for households actually are:

In this thread we're purely discussing the dark blue "cost of energy" component. The spiking prices on individual days grab the headlines, but it's the monthly and yearly weighted averages which actually drive overall energy costs. Retail market participants - ie those who have to purchase the electricity in order to sell it - are generally well protected by insurance arrangements and futures market positioning against the inevitable critical price spikes that have always occurred due to weather (formerly on hot days due to high demand, now on low wind days due to low supply).

(Network costs have actually settled down after years of regulator-approved spikes, so that's good news and actually offsets the anticipated energy price increase.)

 

[Samez]

The company I work for is locally a big electric power user and the pricing of our power consumption is only by a small margin determined by the current prize but is mainly dependent on the frequency and altitude of our power consumption peaks. I.E. small and few deviations from average power use result in lower prices
So in the end the industry /companies don't see the price peeks directly but the average price sets the price range.
The question therefore is if a smart grid will be able to get high power output (renewable energies) and high power consumption (industry high load phases) on one track without influencing production cycles and giving away too much corporate data.

 

[Arwon]

I've got the strong impression that over the next decade the progressive integration of storage technologies and spreading of smart grid technology are going to render that almost entirely a data processing exercise rather than a technical challenge.