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Renewables in South Australia Grid Leap from 0 to 60% in Just 14 Years

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  • Jun 14, 2021

The breakaway success of the South Australian electricity grid, which literally took renewable energy from zero to 60% of total demand in just 14 years, points the way for other jurisdictions to rapidly decarbonize their power supplies, the Institute for Energy Economics and Financial Analysis writes in an analysis published last week.

The state phased out coal in 2016, is aiming for 100% renewables by 2025, has already proven “that 100% solar generation is possible during the daytime to meet users’ energy demands,” and plans to establish itself as a renewable energy export superpower by mid-century, producing enough clean power to meet its own needs five times over, IEEFA writes in a release.

“The fast initial uptake of renewables in South Australia was driven by market features including strong wind and solar resources, historically high residential electricity prices, and historically high wholesale electricity prices,” the institute adds, noting that the “increasing proportion of low-cost renewables” has driven wholesale rates down 65% since 2017. The state has emerged as a leader in rooftop solar, with panels on 40% of homes supplying 13% of total electricity demand.

IEEFA summarizes South Australia’s plans to drive investment, jobs, and economic growth by exporting the green hydrogen and other end products it derives from its future green power surplus. The SA grid is already connected to the neighbouring state of Victoria, and a A$2-billion interconnector to New South Wales has received regulatory approval, with the added transmission capacity expected to increase grid security for all.

South Australia has also been an early leader in storage, after its big Hornsdale battery saved consumers $150 million in its first two years of operation. The state has also introduced a series of “productive innovations” in power distribution networks to take advantage of its world-leading adoption of rooftop solar, said study co-author and distributed energy resources specialist Dr. Gabrielle Kuiper.

The net result is that “South Australia’s network operator is now managing 40% rooftop solar household penetration using less than 1% of its regulated network revenue,” she added.

IEEFA lays out seven “vital lessons” the South Australian experience can offer for energy and grid planners elsewhere:

• Variable wind and solar can meet more than 60% of annual electricity demand, and hit 100% at some times of day. (For now, South Australia is filling the gaps with gas peaker plants.)

• Government policies and power market design can drive up renewable energy adoption.

• Ambitious renewable energy plans can drive economic growth.

• Adding wind and solar to the grid drives down wholesale electricity prices.

• A high-renewables grid can still be reliable and secure.

• Utility-scale and behind-the-meter batteries can contribute to system reliability and security.

• Local distribution networks can innovate to manage rising adoption of rooftop solar.

Matt Chester's picture
Matt Chester on Jun 14, 2021

Impressive jump, and as they say-- it's just getting started! Some like to point to this as slow growth, but it's growth that will stick around (and existing energy sources had a few decade head start to begin with)

Nathan Wilson's picture
Nathan Wilson on Jun 15, 2021

Except that South Australia does not have a separate electric grid (they are strongly connected to the National Electric Market, and particularly the much larger predominantly coal-powered Victoria grid), so it is very mis-leading to characterize this as an example of high renewable penetration. 

They are like the Australian version of Iowa (which had a 2019 wind energy generation equal to 53% of its total electricity consumption, but they are plugged into the MISO regional grid which only had 8.5% wind penetration, according to LBNL Wind Tech report 2020).

Specifically, South Australia has 1.7 GW of average demand, and about 0.8 GW of transmission to Victoria.

It is also interesting that their wholesale electricity price volatility has greatly increased in recent years, and prices were negative 6.8% of the time in 2019/2020. 

See here and here.

Matt Chester's picture
Matt Chester on Jun 15, 2021

But in the case of Iowa or South  Australia, isn't that all that the leaders in those regions can control? If I'm a regulator in Iowa or a political leader running on energy issues in South Australia, all I can control is the penetration of these energy sources in my jurisdiction. I suppose ambitiously you can look to continue to grow those sources so you're able to send more of those clean energy sources out to the wider connected grid, but it's still a reasonable measure as long as you recognize the broader context of energy systems that you point out

Nathan Wilson's picture
Nathan Wilson on Jun 16, 2021

Sure.  But my intent was really to point out  how weak these renewable success stories really are.

Australian greens may look with pride on the South Australian example, but Australia's national average electricity emission intensity is among the dirtiest in the developed world, due to the high usage of coal.

There are still no existence proofs for the viability of high penetration renewable grids (in contrast to the examples France, Sweden, and Switzerland, which prove that deep decarbonization is possible using nuclear and hydro).  Every time an enthusiast points to a renewable example, the details tell a far more pessimistic story than the headline.

Renewables are sold to the public as a drop-in replacement for electricity from fossil fuel and nuclear, but the price volatility hints at a deeper problem with variable renewables.  The variability will result in symptoms that inevitably get passed on to end-users.  Those prices will likely need to be exposed to end-users in the name of demand-response.  This will make it harder for the poor to afford air conditioning on the hottest days and heating on the coldest days.  The system itself will introduce new vulnerabilities to cyber attack.

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