SA batteries paid to charge as solar sends electricity prices negative
Marija Petkovic
Founder & MD at Energy Synapse | Energy market software for utility-scale project developers
Batteries in South Australia have been paid to charge throughout September and October 2021 due to a record number of negative price intervals. Wholesale electricity prices were negative almost 40% of the time.
The chart below from the Energy Synapse Platform shows the average intraday generation and price profile for South Australia in September. The lowest prices occur in the middle of the day, due to an abundance of solar energy (particularly rooftop solar). Solar creates a "duck curve" not only in the demand profile, but also in the price profile. This sends a signal for energy storage to soak up excess solar, and discharge the power at more valuable times (such as the evening).
Batteries normally incur a cost when they purchase wholesale energy to charge. However, as can be seen in the Energy Synapse Platform , "charging costs" were a positive revenue line item for the Hornsdale Power Reserve and Lake Bonney battery in South Australia. The 150 MW Hornsdale Power Reserve earned more than $300k from charging over the two months, while the 25 MW Lake Bonney battery earned over $100k.
Negative energy prices were certainly a welcome boost for batteries. However, it is important to note that frequency control ancillary services (FCAS) remain the dominant revenue stream.
Solar farms without batteries face an economic limit
As more solar is added to the grid, daytime prices get lower and lower. This places an economic limit on how much solar (without storage) can be deployed in a market.
The Tailem Bend solar farm in South Australia has a modern PPA structure, which requires it to turn down to avoid negative prices. This is known as "economic curtailment". Tailem Bend was also subject to multiple physical grid constraints, which limited its output. We can see the significant impact this had on the operation of the asset during September in the Energy Synapse Platform . The net result was that the average capacity factor was drastically cut to around 20% in the middle of the day when the natural output of the asset would have been the highest.
领英推荐
Apart from building more big batteries, there is also an opportunity to encourage more demand side resources to "flex up". This can come from a wide variety of technologies such as hot water systems, residential batteries, and even new industries like green hydrogen.
Marija Petkovic is the Founder and Managing Director of Energy Synapse. She is a leading expert in wholesale energy markets and has worked internationally across Australia, New Zealand, and the United States.
Marija is a highly sought after industry expert, having advised some of the biggest ASX listed companies as well as state and federal government bodies. You will see her speaking regularly at major energy conferences and providing commentary in media such as ABC News, Sydney Morning Herald, RenewEconomy, Ecogeneration, and many more. Marija has a deep passion for the transformation of the electricity grid and guiding organisations towards a sustainable and profitable future.
This article was originally published on the Energy Synapse blog .
Renewable Energy specialist EPEC group
2 年That’s the way it should be ??
Fantastic article! This could be a crystal ball for other regions as renewable generation grows. Clear demonstration and explanation of why generation should be met with investment in energy infrastructure and flexibility (such as batteries).
Vice President @ bp | Digital Innovation, Low Carbon Solutions
2 年Angelos Gkanoutas-Leventis David Hill
Director Systems Engineering
2 年I cannot resist to suggest a bit optimization here.??? With Australia stretching over 3 timezones the provinces West Australia, South Australia, Victoria, New South Wales and Queensland could increase the construction of large scale solar and the? interconnectivity of the energy grid running through Australia's biggest cities Brisbane,? Sidney, Melbourne, Perth as well as Canberra and Adelaide. That would mitigate the storage issue? and flatten the peak use of liquid fuel triggered by the energy maxima of the duck- curve.
Solutions Engineering at Fluence
2 年Nice article Marija. Not only are some of the NEM's batteries getting paid to charge in some months, but in some months a battery's revenues from charging have approached or even exceeded its revenues from discharging. In the month of September 2020, the public data suggests the Lake Bonney battery earned more spot revenue from its charging (about $42k) than its discharging (about $22k) - this despite round trip efficiency losses! How's that for responding to price signals...