A new study has revealed that fossil fuel generators could have withheld power at ‘strategic’ times in 2015, causing serious price spikes that led to a staggering $30.3m windfall.
To improve the energy market efficiency, SA should increase its interconnections with other Australian states, or establish energy storage such as concentrating solar thermal, battery storage or pumped hydro.
Australian Conservation Foundation is the body that commissioned the report. Kelly O’Shanassy, ACF’s chief executive said, “South Australia should go further – a big solar thermal plant with storage would deliver power day and night and challenge the monopoly of gas generators.”
O’Shanassy added that the forthcoming Coag energy council meeting; a meeting of state and federal energy ministers is the ideal place to start a strategic and well-coordinated national plan to transform the country’s energy system as well as address the sheer lack of competition in South Australia.
“South Australia’s situation is different from other states, with a lot of renewable power and concentrated market power,” she said. “A coordinated national plan can help clean energy grow while avoiding the price spikes we’ve seen recently in South Australia.
“The clean energy revolution is here and it’s unstoppable. But it needs a plan to avoid disruption, look after communities and stop power price spikes that happen when companies play the market.”
The urgent need for a well-organised transition was suggested by the Australian Energy Market Operator in a recent report. The operator noted “the growing importance of network and non-network developments to securely manage an evolving, lower carbon electricity generation future”.
Mike Cleary, the chief operating officer of Australian Energy Market Operator said: “Possible solutions could include an increased interconnection across NEM regions, battery storage and demand-side management services.”
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AGL’s spokeswoman told Australian Solar Quotes that the recent abnormal spot prices in SA “were driven by a number of factors”.
“With the closure of the Northern Power Station, the state is now heavily reliant on gas generation,” she said.
Snowy Hydro’s spokeswoman said: “Angaston is a diesel peaking generator, which has high fuel costs and limited fuel reserves. As such, Snowy Hydro manages its operations to minimise unnecessary burning of high cost diesel fuel.”
She also claimed that after the 41 price spikes were mentioned in the report, the Angaston generator has since been voluntarily “scheduled”, meaning the generator can no longer switch its electricity supply on or off as it pleases.
“As a scheduled peaking generator, we act to moderate and manage the security and reliability of the South Australian energy market at high demand,” said the spokeswoman.