From scourge to saviour: How the sun powered the grid through a heatwave
SOURCE:ABC Australia|BY:Daniel Mercer
For so long, the pounding sunshine of an Australian heatwave was the grid's biggest threat. It has now become its greatest asset.
On Wednesday, as the temperature soared into the 40s across large parts of southern Australia, the country's biggest electricity market stayed eerily quiet.
Spot prices — a key sign of the balance between supply and demand across the national electricity market serving Australia's eastern seaboard — were subdued.
The Australian Energy Market Operator, which keeps the lights on across the NEM, was issuing few warnings about the risks to supply.
And the commentators and pundits so attuned to the vagaries of the electricity system were somewhat muted beside their keyboards.
Geoff Eldridge, an electrical engineer who runs consultancy Global Power Energy, said the whole episode was striking for what was not happening.
"Hot summer days have long been a stress test for electricity systems," Mr Eldridge wrote in a post on Substack.
"High temperatures drive demand upward, air-conditioners run hard and supply margins are scrutinised closely.
"This week's heat has again pushed demand toward record levels.
"Yet the system response has looked noticeably different.
"There were no Lack of Reserve notices, no calls for emergency reserves, and prices were largely stable through the middle of the day."
Australia's biggest grid has held up remarkably well in the heatwave. (ABC News: Andrew O'Connor)
Heatwave a turning point
Mr Eldridge said this week's heatwave marked a turning point for Australia's energy transition.
In the past, he said extreme heat "placed continuous pressure on supply throughout daylight hours".
To ensure supply, coal and gas plants had to "run hard from morning until evening, with little respite".
As recently as 2019, during another heatwave, he said this historic precedent was largely true.
But he said the events of this week — when underlying demand surged to a record high of more than 40,000 megawatts — suggested that picture was now fundamentally changed.
The pounding sun was no longer a liability, he said, but rather an asset.
"Looking across recent summers, the most notable change is not that demand has eased — it has not," he wrote.
"Peak [underlying] demand is higher than it was in 2019, and summer heat remains a defining challenge.
"What has changed is how the system absorbs that challenge. Solar now carries much of the heat-driven load during the day."
Indeed, solar at its height on Wednesday was providing more than 60 per cent of the power being used in the NEM.
About two-thirds of that was coming from rooftop solar installations.
This refers to the practice of throttling back or switching off generators because of insufficient demand or technical requirements.
Winter, not summer, the risk
Bruce Mountain from the Victoria Energy Policy Centre said the significance of the shift was hard to overstate.
In essence, he said the explosive growth of solar power in particular had diminished the risks of blackouts during heatwaves caused by supply shortfalls.
Bruce Mountain says the grid is now under more strain in winter. (ABC News: Sean Warren)
By contrast, he said the risks were now becoming much more severe in winter, when demand for electricity can be extremely high but output from solar is much lower.
"I think summer peak daily production, other than in evening hours, has become a complete non-issue," Mr Mountain said.
"We're increasingly moving to at least full grid supply winter peaking system when solar is low and demand is relatively high.
"I've seen this over the last three or four years — much more of the strain is happening in winter than in summer now."
Despite the improved outlook for the grid in summer, Mr Mountain said big risks remained.
For starters, he said, while solar power helped take much of the sting out of daytime supply concerns, it was much less helpful in the evening.
He also said the critical time for power grids during summer in Australia was typically from late January, once schools had resumed and industry was back up and running.
"So after the 25th of January, if you have three or four days of 40-degree temperatures in Victoria and other states … that's the time to look," he said.
What's more, Mr Mountain said the apparent ease with which the market sailed through the heatwave this week was still thanks in large part to coal plants.
Take them out of the equation, he said, and the pressure on supplies and the security of the system would bear down once again.
"As long as we've got the existing coal generators in the market, which are desperately needed at those times, it's not a problem," he said.
According to the AEMO, a large chunk of the eastern states' coal plants are forecast to retire in the coming decade.
Stresses 'haven't disappeared'
Geoff Eldridge from Global Energy Power made similar observations.
He said stresses on the system had not simply vanished because of solar but rather moved.
According to Mr Eldridge, most of the pressure on the electricity system — including during heatwaves — came in the evening peak when the Sun had set.
During those times, he said coal was indispensable.
"Coal still provides scale and firmness," Mr Eldridge wrote.
"It remains essential overnight and into the evening."
Coal plants like Eraring in NSW are still vital, particularly outside of daylight hours. (AAP/Greenpeace)
He said this constant balance between daytime abundance of energy caused by solar and scarcity in the evenings was a condition of the new, emerging system.
Even though Wednesday was extraordinary in some ways, with the highest underlying demand ever recorded in the NEM, he said it was also an ordinary demonstration of the condition.
Mr Eldridge said spot prices were "broadly stable through the middle of the day" and even negative at times as low-cost solar power flooded the grid.
Volatility, however, returned in the evening as the Sun went down and more expensive sources of generation, such as gas, hydro and batteries, were called on to meet demand.
Both Mr Eldridge and Mr Mountain said batteries would — and already were to an extent — help bridge the daily gap between abundance and scarcity.
On Wednesday, for example, they helped meet about 10 per cent of demand during the evening peak.
A wave of new big batteries is starting to help bridge the daily gap. (ABC News: Clint Jasper)
Mr Mountain, for his part, said batteries would come to dominate evening supply as their number and capacity grew.
He said many of the batteries would be profitable in their own right, buying cheap power in the middle of the day and selling in the evening when prices were higher.
Others needed for back-up for the system during periods of stress, such as heatwaves or low renewable energy output, would need some form of public support, he ventured.
"That's not terribly different from the electrical system that we've got now, where that backup supply has had public support, always has," Mr Mountain said.
A glimpse of the future?
For Mr Eldridge, the events in the market this week were momentous in what they said about the state of Australia's energy transition.
Though far from complete, he said the transition had come remarkably far and this week was a glimpse into what the country's energy future would look like.
"Evening peaks remain difficult, storage is still limited, and extreme weather will continue to test the system," Eldridge wrote.
"But taken together, these patterns offer an early glimpse of a grid shaped less by fuel scarcity and more by timing, coordination, and flexibility.
"Sometimes the most important transitions are visible not in moments of crisis, but in moments where crisis quietly fails to appear."