Electricity Prices, Reliability and Ideology

So, apparently we will have electricity prices reduced by a cap on the price of gas and coal and by installing more renewables, and we will have more reliability by installing more batteries and hydro.  And Chris Bowen says anyone who denies renewables are cheaper is a liar “This crisis is caused by gas and coal prices, anybody who says it’s caused by renewables is lying..”

Time for a reality check.

All data has been downloaded from OpenNEM.

Figure 1 shows the fluctuation in daily generation of electricity for the National Electricity Market for the year from 3/12/2021 to 3/12/2022, as supply kept up with demand:

Figure 1: Daily electricity generation, NEM

There is a weekly curve with less demand on weekends, showing as the down spikes.

Figure 2 shows how generation was provided by all fossil fuels and all renewables including hydro and batteries:

Figure 2: Daily electricity generation, NEM, fossil fuels and renewables

(Renewable energy advocates will point out how renewable generation rose at the end of October to record levels.  Bully for them.)

Figure 3 shows the daily price of electricity for the same period:

Figure 3: Daily price of electricity

Note prices began to rise sharply in April and fell back again at the end of July, and there were several large spikes that had nothing to do with the price of gas or coal, but the realities of supply and demand.

So are renewables cheaper?  Well yes, apparently some are.

Figure 4: Average daily price of electricity ($ per GigaWatthour)

Clearly, diesel powered generators are by far the most expensive so are only used for small scale or emergency generation.  Black coal is in the middle, and solar power is cheapest.  Chris Bowen and other renewable advocates will NOT be happy to learn that brown coal is cheaper than wind.

The maximum price of electricity is reached when demand is high but supply is struggling to keep up- those spikes in Figure 3.

Figure 5: Maximum daily price of electricity ($ per GigaWatthour)

Renewables are cheapest, with coal next.  All others including hydro are above a million dollars a Gigawatthour.  Diesel is the stand out.

But how much of each is actually used?

Figure 6:  Average daily electricity generation

Coal is king.

Figure 7:  Maximum daily electricity generation

For short periods wind overtakes brown coal.

Figure 8:  Minimum daily electricity generation

The backbone producers of the NEM are the only ones visible- the others are backup only.

The next figures show plots of data at half hour intervals for the first week of December (1/12/22 to 8/12/22).

Figure 9:  Price per MegaWatthour by time of day (in an average early summer week)

This is the daily picture of supply and demand.  Maximum prices are reached in the early evening – 6 pm to 8 pm- and prices are lowest in daylight hours.  Notice that prices are frequently negative between 6.30 am and 4 pm.  Some generators are paying up to $50,000 per GWhr for the NEM to take their power.  They have to make up these losses when demand is higher.

How does this match with generation?

Figure 10: Total generation by time of day

Demand is highest in afternoons when air conditioners are working hard.  Demand is still above 17,000 Megawatts in the early morning hours.  That is baseload.  (The bottom two rows are Saturdays and Sundays, when people sleep in.)

Here is the problem for Chris Bowen and our energy ministers: how long until renewables plus storage can keep the lights on?

Figure 11: Total generation and renewables + storage by time of day

Not for a very long time, even on an average summer day, let alone if the wind fails, or there’s heavy cloud, or extremely hot or very cold weather.  What’s the point of “cheap” electricity if it can’t do the job?

Here’s why.

Figure 12: Solar generation by time of day

Most solar farms have panels that track the sun, so they quickly reach near maximum capacity.  Rooftop solar, being fixed, follows the irradiance curve.  But note that while solar electricity is cheapest, it cannot be bought for any price at night.

Figure 13: Wind generation by time of day

Solar power is predictable compared with wind, which can vary from less than 1,000 MW to over 6,000 MW.

In a fit of ideological fantasy, Chris Bowen and our energy ministers think they can firm up renewable supply without using coal or gas.  Figure 14 shows hydro, battery, and biofuel generation on a typical early summer day:

Figure 14: “Green” firming by time of day

You can forget about batteries and biofuel (that’s mostly from burning bagasse in sugar mills during the crushing, so is only available for about eight months).   Hydro is the only source worth considering.

Figure 15:  Fossil fuel generation by time of day

Fossil fuels do the heavy lifting, 24 hours a day, helped by hydro. 

Figure 16:  Gas generation by time of day

Gas helps maintain supply when renewables fluctuate because generators can ramp up relatively quickly.  A lot of the time they are on standby, so have to make money when demand is high.

Figure 17:  Coal generation by time of day

Black coal generation can vary by nearly 50 percent in a few hours, every day.  They’re not designed to do that forever.  Break downs are more likely.  Brown coal is not as flexible as black coal but keeps up a reliable supply 24 hours a day.

There is a huge gap- about 10,000 MW- before renewables and storage can begin to provide for our needs.  Excluding coal and gas from firming supply- to maintain electricity supply when time and weather won’t co-operate- will make the task impossible.  Fossil fuelled generators have to make up for losses or lack of income when solar and wind supply is abundant by higher prices when demand is higher.  Supply and demand is the main reason for high electricity prices- but Chris Bowen and Albo have never run a business.

There is nothing but pain ahead, and things will get worse before they get better.

I’ve bought a generator.

(Source: OpenNEM)

Tags: Australia, Energy, NEM