Market Dynamics

Energy demand is down, emissions are down, generator outages have increased, gas supply is up, and prices are still high: so concludes AEMO in its quarterly energy market report covering the three months to June 30.

Despite the large increase in solar PV generation (which helped push down NEM average operational demand by 362 MW) wholesale electricity prices in the National Electricity Market remained high, with a rise of 8 per cent compared to the same time last year.

The generation mix influenced wholesale electricity prices: a reduction in brown coal which came in at 573 MW less than Q2 2018 due to increased planned and unplanned outages, as well as hydro generation, and steeper gas prices of around 16 per cent, according to the quarterly report.

April 27 was significant in South Australia, when at 1.30pm a new Q2 minimum operational demand record was set with a drop to 749 MW, with rooftop PV contributing approximately 600 MW of output.

At the other end of the scale the state exceeded its Q2 maximum operational demand record at 6.30pm on 24 June 2019, reaching 2,564 MW.

The good news in AEMO’s Quarterly Energy Dynamics Q2 2019 report was the fall in NEM emissions for the quarter to the lowest on record, due to lower brown coal-fired generation, increased variable renewable energy output, and lower NEM demand.

Between the second quarters of 2018 and 2019, average large-scale wind and solar generation increased by a significant 47 per cent and made up one tenth of the supply mix compared to 7 per cent recorded in Q2 2018.

Over the quarter, new projects representing almost 1,500 MW of capacity (1,020 MW wind and 427 MW solar) came on line, almost half of which was located in Queensland.

Over in the west, compared to Q2 2018, the Wholesale Electricity Market electricity supply mix revealed a 56 per cent increase in wind output, while coal and Gas powered generation both decreased by 7 per cent.

VPPs

Staying with AEMO, in late July registrations opened for participation in AEMO’s virtual power plant demonstration program that will test the potential for consumers’ distributed energy resources (rooftop solar systems, battery storage and controllable load devices) operating in a VPP, to provide scalable energy and network services traditionally performed by large-scale, conventional electricity generators.

The initiative contributes to unlocking new value for Australian consumers with DERs, including an estimated two million rooftop solar systems, benefiting all energy users through a more efficient and affordable power system.

AEMO’s Emerging Markets and Services EGM, Violette Mouchaileh, said that the demonstrations come at a time when the energy sector is experiencing unprecedented change, moving towards a decentralised generation model.

“Australia’s energy landscape is rapidly transforming, faster than most developed economies, creating power-system operation and design challenges, as well as presenting opportunities to create a future world-class power system,” said Ms Mouchaileh who is a keynote speaker at the upcoming Queensland Smart Energy Conference in Brisbane.

“As the independent energy system and market operator, we believe DER growth can empower consumers to contribute scalable value to our future energy system by joining virtual power plants that actively participate in Australia’s electricity markets.”

AEMO is encouraging VPPs to register to accelerate the shared learning on how to safely and efficiently integrate, operate and regulate emerging technologies into the NEM.

Prominent grid-connected examples include the 36 MW Next Generation Energy Storage Program with more than 5,000 batteries in Canberra homes (see previous article) and the South Australian public housing tenants’ VPP.

If commercialised, the SA VPP could reach up to 50,000 public and private property installations, making it one of the biggest in the world.

For more information on the VPP demonstrations program and to register, visit www.aemo.com.au

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