Learning our way to 100% renewable energy

SA aust-map-smlSouth Australia is a surprising leader in the world’s journey to 100% renewable energy. Other smaller islands and towns have already hit the 100% target. Denmark and Germany have been in the lead for policies and action for 1 to 2 decades but many people remain surprised when I tell them how much renewable energy we use in South Australia and how quickly it has happened.

The purpose of this post is to document some of the lessons that we can all learn from. It is easy to be wise in hindsight but the best outcome from some of South Australia’s challenges will be that other jurisdictions act earlier to head off potential problems.

Adelaide is the capital city on the south coast of Australia and it has a population of approximately 1 million people. The whole state, despite its vast size only has a population of 1.67 million and a gross state product of around $100bn. So we are a modest sized place, only 7% of the country’s population but an endowment of resources – particularly wind and solar energy. Our energy system uses some 300PJ, roughly a third each for transport, industrial and domestic heat and electricity. The electricity system delivers 3,000MW at peak load and 10,000GWh per year. This is where the story starts.

Over the past decade, South Australia has moved from little renewable energy to over 40% and its current goal is 50%.

We started with a wind boom. The renewable energy target (RET) had been introduced at a national level and South Australia had two key things to attract investors – a welcoming regime with politicians that wanted a clean green state and electricity prices that were slightly higher than the other states. Between the RET subsidy and the market prices that wind output could fetch, there was enough to incentive to attract the first wind farms to South Australia.

Public servants were spurred into action. The planning regime was checked to ensure development laws would allow the building of wind turbines. Investors chased the wind resource to the Eyre Peninsula on our west coast, only to discover that the cost of bringing the energy back onto the main backbone of the electricity system was prohibitive. (We still don’t have a good mechanism to encourage the collective investment that is needed to justify the expense of extending network infrastructure, a challenge our geothermal investors have also faced). It wasn’t long before wind farm investors realised that a poorer resource next to a solid part of the network could become an equally viable investment.

Our solar industry is somewhat more home-grown. For many years South Australian businesses got by with a small market that included off-grid farms and homes and two big corporate customers – SANTOS who needed small amounts of electricity as corrosion protection along its gas pipeline (which runs 800km from the desert to Adelaide) and Telstra which was installing satellite phones in remote locations between Darwin and Adelaide.

The renewable energy target helped with slow growth of solar energy (from 2001) and households could install 1.5kW of solar PV with a RET payment for the first 15 years of solar production. By 2008, we had an estimated 2MW of solar energy, including a showpiece installation at Wilpena Pound of 100kW. Most households optimised their investment in solar energy by using older style meters that ran backwards when the surplus was exported to the grid. South Australia introduced the country’s first feed-in tariff at that stage with much wrangling over the value (44c/kWh), the duration of the scheme (20years), and whether it should be for net exports or gross(net).

No one foresaw how fast the solar landscape could change. The federal government introduced a multiplier in 2009 and solar panel prices were falling. Other state governments rushed to introduce their own solar feed-in tariffs. By 2010 restrictions were introduced on the feed-in scheme and rules to ensure that the retailers paid for the export electricity they were receiving.

South Australia now has some 800MW of solar panels installed across 200,000 households and businesses (but mostly households). This is phenomenal considering we only have 750,000 homes and 100,000 businesses.

renewable capacity

You can see the uptake of wind and solar in the graph from AEMO.

Now that you have a sense of the journey so far, lets consider some of the lessons.

Subsidies: The subsidy environment for solar (in particular) has given the industry a number of quick cycles of boom and bust. I don’t have any answer for this problem but for those who work in the industry, life has been very difficult at times and some have lost significant money. It doesn’t help that state governments introduced different feed-in tariffs around the country and the federal government introduced a multiplier to increase its subsidy. The market conditions changed faster than the government regulations so some people made a lot more money than others, even though this would never have been the intent.

Feed-in tariff design: The feed-in tariff was hard to change. It is worth taking a note out of Germany and Spain’s playbook. Both introduced sliding scales in regulations so that the tariff could be adjusted to match the falling price of solar energy and the level of subsidy remained adequate to encourage investment but not lucrative.

Net vs Gross feed-in: I think we made the right decision to have a net feed-in tariff. Many households exported more than anticipated. When the tariff stops, those households enter the market as prosumers, using some of their solar energy and exporting the surplus. By contrast, consumers in NSW (gross feed-in) are trying to get their metering arrangements changed because without the tariff, consumers can’t get top dollar for their electricity by using it themselves. In other words, in SA we connected solar panels in the way that made sense in the long term.

Smart meters: We changed 200,000 meters from old spinning disc meters to import/export meters at the same time Victoria was rolling out smart meters to all its customers. We get a big FAIL for not ensuring those meters were smart, a real wasted investment opportunity.

Scheduling of wind farms: We had to play catch up on managing our wind farms. The capacity quickly reached a point where the market operator needed to be able to turn off some wind capacity at times. These wind farms are now known as semi-scheduled. We also did a lot of work on forecasting in order to predict the wind output in advance. We still have negative price events occasionally where the traditional generators force a cost on the wind turbines if they don’t turn off.

Frequency Services: Wind turbines have never been considered as full players in the market so it is no surprise that they don’t offer frequency control services. Anecdotally, wind farms in Denmark turn off just before the morning peak and then bring capacity online again, just to sell some frequency services into the market. SA has now hit a point where there are few traditional generators online to offer this service during the ramping up of load (particularly as all the solar panels shut down for the evening at sunset, known as the duck curve).

System response to faults and high/low voltage frequency: the protection settings on solar inverters can become a problem if they all have exactly the same settings. A high voltage event can shut down every solar system on the street (for example) and the market operator is still investigating how the inverters will behave in response to other fragile events in the system.

Hot water timers: the majority of our hot water systems are boosted at midnight. This minipeak didn’t used to be a problem but with less synchronous inertia in the system it can be. We should have created diversity in this earlier and as we do it now, we should ask if there is a smart way to do it.

Electricity Act Objectives: Over a decade ago, the Total Environment Centre advocated for environmental objectives to be incorporated into the electricity act. I, for one, believe we would have worked harder on integrating renewable electricity into our grid and planning for a long term energy transition if this had been the case.

Do you have any other lessons this post should mention? please join us in the comments below.

Some of you will be more familiar with elements of South Australia’a energy changes than I am. I welcome corrections and questions to make this story as robust as possible. I am hoping it will be a useful story to tell to people I visit on my Churchill Fellowship travels. What do you think?

 

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About Heather

I am an energy and climate change specialist with a background in industrial energy efficiency and climate change policy.
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3 Responses to Learning our way to 100% renewable energy

  1. Margie Caust says:

    Hi Heather I think it’s a great piece and really useful description of the SA journey. I don’t have any other lessons as far as i know. What would be interesting for me is more of your analysis of the implications – where could we be if different decisions had been made? Where are we now as a result of decisions you describe? Some of your points are worthy of an article in their own right. What does it mean in relation to the new 50% target? Why did we do some of the things we did? Eg why didn’t we go with smart meters when there was the chance? But all interesting stuff – thanks Margie
    PS my computer just cut out when I was trying to post so apologies if I end up posting twice

    • Heather says:

      I think to be fair to everyone involved, many of these decisions didn’t seem important in the context of a trickle, and the lesson is that a trickle easily turns into a flood so we must cast ourselves forward and imagine if our approach is robust enough.

  2. Pingback: Energy Transition, lessons from South Australia’s energy crisis | changing weather by Heather Smith

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