AEMO Technical report on wind integration

Hi there, I’m Jervis Whitley. Today is Friday, 4th of October, and you’re listening to WindFront, the weekly roundup of the wind industry from Australia and around the world. Today, I’m going to tackle my 2nd report into wind integration, and I’ll go through the weekly top three earners.

Big takeaway from AEMO’s 2nd report into wind integration in the NEM, the National Electricity Market in Australia, is that there is a lot of wind coming. AEMO’s predicted a further 9 gigawatts of wind to be installed over our current 2.7 gigawatts of wind. Now that represents a fourfold increase in the wind over the next 6 years. Let’s put those levels in the context, our minimum demand is currently around 15 gigawatt, and the total installed wind will be over 11 gigawatt. So they’re beginning very close there. For AEMO, the most concerning aspect is that both South Australia and Tasmania’s wind installation rates will be far above the minimum demand in those regions. Installed levels are already higher than minimum demand in South Australia right now.

In 5 minutes, an individual wind turbine output can sometimes vary by quite a lot. At a wind farm level, the aggregated variation due to wind is less because the turbines are spread over a wide area. And at the state level, the wind output variation is, again, less. And finally, if you look at a NEM-wide level, the variation in wind output over a given 5 minute period is much lower again. AEMO have put some numbers next to these variations. They show that at the wind farm level, at 5 minute variations, it can be up to 10% quite regularly. At the state level, this drops to around 3.5%. And finally, at the NEM drops down to 2%.

If 9 gigawatts of additional wind were to be installed, our power system can handle it under the current regime. AEMO suggests that the stability could be resolved through the use of constraints at times of low system inertia. The report by link suggests that from 10 to 30% of wind energy could be constrained, though. Now the constraint types are twofold. The most binding constraint, or the most active constraint, which would limit wind, was one where there’s so much wind produced that the system could not export at all, and so that there’s a thermal constraint. The lesser constraint was one due to stability issues caused by the wind.

So where do we build wind farms in the future then? I find it difficult to imagine that we’re going to have 9 gigawatts of wind cramming themselves into the same areas of the state, because that’s where the wind resource map is telling them to build. At some point, someone needs to look at other planned and existing wind projects, and the capacity of the system itself to handle their production. So my bet’s on the market sorting themselves out to the greatest extent. New South Wales, Queensland, other parts of Victoria. Perhaps the eastern, rather than the western parts, will become more attractive to developers that are looking to find their own unconstrained slice of the network.

And as to AEMO’s use of constraints to solve the stability issue. It’s technically feasible, but extremely difficult to build a business case around. Some of these wind farm projects sit on a knife edge in their profitability. They can’t afford a 10% reduction in energy output because of constraints. What’s better is an upfront plain English obligation on developers, something they can include in their business case. As we saw last week, it’s hard enough getting generation investment in the NEM without the risk of future constraints eating up profit margins.

So my big question this week: where would you build a wind farm and why?

The top 3 wind farms this week. You would note it was a very windy week in Victoria. Macarthur up $1.7 million. Waubra, $670,000 in Musselroe around about the same. Until I see you next week, keep buying those green electrons.