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Thursday, July 28, 2016

Coal is behind the attacks on wind turbines

First they were supposed to be destroying birds, then sleep. Now wind turbines are being blamed for destroying the Australian electricity market and pushing prices as high as $14,000 per megawatt hour.

As Victoria gives the green light for a massive $650 million wind farm with up to 104 turbines at Dundonnell, 200 kilometres west of Melbourne, and with talk of more wind farms in NSW a Liberal senator has been calling for a moratorium on new turbines until the Productivity Commission examines what they are doing to prices.

"There should be no further subsidies paid for an intermittent and unreliable power source that can be seen as as proven failure," Senator Chris Back is quoted as saying, in an apparent attempt to prejudge the inquiry he is calling for.

On the face of it, it's an odd idea: that adding a new and very cheap source of power should push up prices (wind turbines cost next to nothing to operate). And for the record, it's not true. South Australia has more wind turbines than any other state. They supply more than one-third of its power. Yet a graph prepared by the Australian National University's Hugh Saddler shows that South Australia's average electricity price was much higher when they only provided 10 per cent.

The complaint is about spot prices, those instant short-lived prices the big industrial users have to pay if they haven't insured against sudden movements, as a lot have not. Spot prices did indeed jump into the stratosphere a week or so back when the wind wasn't blowing. The typical spot price facing an industrial customer is $100 per megawatt hour. Suddenly they faced $14,000 – a more than 100-fold increase. Ever since South Australia closed its last coal-fired power plants and mothballed its newest and most efficient gas plant it has had to import extra power from interstate when the wind has been low.

Normally, this isn't much of a problem, but as it happened the main cable used to import power from the eastern states was operating way below capacity when the wind dropped. It was being upgraded from a maximum capacity of 460 to 650 megawatts. That'll mean fewer problems in the future, but it created an awfully big problem at the time. So much so that the South Australian government directed the Pelican Point gas-fired power near Adelaide to get back on line.

It had been closed because the owner could make more money selling its gas contracts to exporters. So South Australia faced special circumstances. The gas export boom had closed one backup power supply and work on upgrading a line had closed another.

But we are forever being told there are lessons for the rest of us. One newspaper refers to South Australia as "the canary in the coal mine". Australia as a whole can't import power, the argument goes, and if it relies on wind as much as South Australia does, its backup generators might go out of business.

The truth is more complicated. The worst kind of generators to run alongside wind turbines are the coal-fired ones. They're extraordinarily bad at switching on and off, which is what's needed to fill the gaps when the wind's not running. The best kind are hydro plants, and combined-cycle gas turbine plants. Moving to wind necessarily means closing redundant coal-fired generators, which is needed anyway in order to cut carbon emissions.

It doesn't mean that at all for combined-cycle gas turbine or hydro plants.

And guess which industry has been most heavily promoting the canary in the coalmine argument? Yes, the coal industry, through the Minerals Council of Australia.

With fewer coal-fired plants, and with wind plants scattered throughout the nation, the system has the potential to work surprisingly well. Energy analyst David Leitch points out that in South Australia most of the wind turbines fire up at the same time, but if they were also placed in northern NSW and Tasmania (where the wind blows at very different times) each would fill the other's gaps.

South Australia and Tasmania overlap only 10 per cent of the time. At other times, the gap would be filled by storage: either batteries or water storage as wind power pumps water up to the top of mountains while the wind's abundant and lets it drop through hydro plants when it's not.

Wind needn't be a problem, regardless of what you've been told. But it does leave very little role for coal, which supplies base load power for which a wind-dominated system would have little use.

Asked to model the cheapest possible way of supplying electricity in the future if Australia needed to cut its emissions by three quarters, Ben Elliston of the University of NSW and Jenny Riesz of the Australian Energy Market Operator came up with a scheme in which 60 per cent is produced by wind, 17 per cent by gas and only 6 per cent by coal.

That's the future facing our traditional generators as more turbines get built. Not blackouts, not big price spikes, but extinction. I reckon it's the real reason their friends are upset.

In The Age and Sydney Morning Herald