Winds of Change An analysis of recent changes in the South - - PowerPoint PPT Presentation

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Winds of Change An analysis of recent changes in the South - - PowerPoint PPT Presentation

Jul 24, 2023 208 likes •489 views

Winds of Change An analysis of recent changes in the South Australian electricity market Dylan McConnell Melbourne Energy Institute Australian-German Climate & Energy College 12 th August 2016 South Australia's changing supply mix 16000

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SLIDE 1

Winds of Change

Dylan McConnell

Melbourne Energy Institute Australian-German Climate & Energy College 12th August 2016

An analysis of recent changes in the South Australian electricity market

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SLIDE 2

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2000 4000 6000 8000 10000 12000 14000 16000 Annual Supply (GWh)

Wind Solar Brown coal Gas Thermal Gas CCGT Gas OCGT Distillate Interchange

South Australia's changing supply mix

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SLIDE 3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Duration −500 500 1000 1500 690 MW 1065 MW 2000 2500 3000 Demand (MW) 1115 MW Peak Intermediate Baseload

South Australia's changing demand curve

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SLIDE 4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Duration −500 500 1000 1500 690 MW 1065 MW 2000 2500 3000 Demand (MW) 1115 MW

Demand Demand net wind

Peak Intermediate Baseload

South Australia's changing demand curve

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SLIDE 5
  • 210 MW

1215 MW 1590 MW Peak Intermediate 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Duration −500 500 1000 1500 2000 2500 3000 Demand (MW)

South Australia's changing demand curve

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SLIDE 6
  • 210 MW

1215 MW 1590 MW Peak Intermediate 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Duration −500 500 1000 1500 2000 2500 3000 Demand (MW)

South Australia's changing demand curve

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SLIDE 7

Electricity prices across the NEM

50 100 150 200

  • No. of prices above $300

NSW QLD VIC SA

2002 2004 2006 2008 2010 2012 2014 2016 20 40 60 80 100 120 140 160

  • Vol. weighted price ($/MWh)

Carbon price period Drought affected period

NSW QLD VIC SA

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SLIDE 8

50 100 150 200 250 300 Daily VWP ($/MWh)

Daily Electricity

Jan 2015 Apr Jul Oct Jan 2016 Apr Jul 50 100 150 200 250 300 Daily VWP ($/MWh)

7 day moving average Electricity

5 10 15 20 25 30 Ex post gas price ($/GJ)

Gas

5 10 15 20 25 30 Ex post gas price ($/GJ)

Gas

A gas linked electricity market

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SLIDE 9

2015 2020 2025 2030 2035 2040 2045 2 4 6 8 10 12 14 16 18 20 Price ($/GJ) Previous cost ($4.40/GJ)

Torrens Island fuel costs

AEMO scenario

High Medium Low

A gas linked electricity market

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SLIDE 10

Renewable energy and merit order dispatch

$10 $20 $35 $60 $/MWh $20 MW $60

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SLIDE 11

Renewable energy and merit order dispatch

$10 $20 $35 $60 $/MWh $20 MW $60 $0

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SLIDE 12

2 4 6 8 10 12 14

  • No. events

>$300 >$1000

10 20 30 40 50 60 Price ($/MWh)

Median Price VWP Price 50% quantile

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Duration 200 400 600 800 1000 1200 Wind output (MW)

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SLIDE 13

Capacity cycle

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SLIDE 14

Competition and market power

2012 2013 2014 2015 2016 0.0 0.2 0.4 0.6 0.8 1.0 Pivotal Supply Index

NSW QLD VIC SA

  • Herfindahl–Hirschman Index of the South Australia 3000 – 3400
  • Above the value of 2000 that the ACCC uses to flag competition issues
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50 100 150 200 250 300 350 400 Dispatch Price ($/MWh) 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 2015-09-04 10 20 30 40 50 Output (MW)

Competition and market power

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SLIDE 16

2000 4000 6000 8000 10000 12000 14000 Dispatch Price ($/MWh) 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 2015-08-27 10 20 30 40 50 Output (MW)

Competition and market power

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SLIDE 17

320 340 360 380 400 420 440 460 480

Torrens Island A

17:00:00 18:00:00 19:00:00 20:00:00 21:00:00 22:00:00 23:00:00 7 July 2016 400 450 500 550 600

Torrens Island B

Competition and market power

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SLIDE 18

200 400 600 800 1000 1200 Capacity (MW) 100 100 200 300 400 500 600 700 800 Offer price ($/MWh) (-1001.9) $13826 $14019

140 MW

Torrens Island Offer Curve

Offer curve

June 7 2016 July 7 2016

Competition and market power

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SLIDE 19

200 400 600 800 1000 1200 Capacity (MW) 100 100 200 300 400 500 600 700 800 Offer price ($/MWh) (-1001.9) $13826 $14019

140 MW

Torrens Island Offer Curve

Offer curve

June 7 2016 July 7 2016

Competition and market power

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SLIDE 20

Options for South Australia

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SLIDE 21

Summary

  • Potential for market power to be concentrated as a

consequence of transitional arrangements

  • Diversification of low emission generation and storage

portfolios

  • Alignment of national energy policy across related

sectors, specifically the intersection of gas export markets and the Renewable Energy Target

  • Coordinated system planning of transitional arrangement
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SLIDE 22

Thank you

‘When the wind of change blows some build walls while

  • thers build windmills’
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SLIDE 23

Capacity cycle

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SLIDE 24

Changing supply

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1000 2000 3000 4000 5000 6000 7000 8000 9000 Annual Supply (GWh)

Wind Solar Brown coal Gas Distillate Interchange

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SLIDE 25

Changing supply

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2000 2000 4000 6000 8000 10000 Annualised Supply (GWh)

Wind Brown coal Gas Distillate Interchange

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SLIDE 26

2010 2015 2020 2025 2030 2035 Year 500 1000 1500 2000 2500 Demand (PJ)

ResidentialCommercial Industrial GPG LNG

Gas demand

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SLIDE 27

200 400 600 800 1000 Gas generators 1200 Monthly Emissions ('000 tonnes CO -eq)

2

FY08 9.8 MT FY16 5.5 MT Northern Playford B

Gas demand