The economics of transmission constraints on wind farms: some evidence from South Australia

The impacts of transmission congestion and network investment on the development of the Australian wind energy industry have received growing attention from wind farm developers as well as relevant policy stakeholders such as the Australian Energy Market Commission (AEMC). There are many potential wind farm sites across the country with excellent wind regimes yet only limited transmission capacity. At least one wind farm in South Australia has spent a period following construction where its output was curtailed by transmission constraints (NEMMCO, 2009). Current market rules do not guarantee dispatch to an existing wind farm as more wind generation connects to the same transmission. Given the expense of transmission network extension and augmentation, there are interesting questions of what economic impacts such constraints might have for wind farm operators. This paper examines this issue in the context of the South Australian region of the Australian National Electricity Market (NEM). The State currently hosts almost half of total Australian wind generation capacity and has significant transmission capacity limitations for further development. Half hour wholesale electricity spot prices were used along with generation data from nine South Australian wind farms over the 2008-9 and 2009-10 financial years to assess the potential impact that transmission constraints might have had on wind farm revenue. Results showed that a number of the wind farms would have suffered only very limited revenue reductions from having significantly greater wind farm capacity than the rating of their transmission connection to the NEM. Importantly, some wind farms could be limited to a maximum power output of half their rated capacity and still achieve higher capacity factors then other already existing unconstrained wind farms. The key reasons for this are that wind farms do not generate at rated capacity for a great deal of the time over the year, periods of high wind generation appear to be associated with lower wholesale prices and there is significant variance between the wind farms capacity factors. Our findings suggest that there may be circumstances where wind farm developers might benefit from installing more wind turbines than the capacity of their transmission connection.Integration, market price, NEM, South Australia, Wind, Environmental Economics and Policy, Farm Management, Resource /Energy Economics and Policy,

Renewable energy integration into the Australian National Electricity Market: Characterising the energy value of wind and solar generation

This paper examines how key characteristics of the underlying wind and solar resources may impact on their energy value within the Australian National Electricity Market(NEM). Analysis has been performed for wind generation using half hour NEM data for South Australia over the 2008-9 financial year. The potential integration of large scale solar generation has been modelled using direct normal solar radiant energy measurements from the Bureau of Meteorology for six sites across the NEM. For wind energy, the level and variability of actual wind farm outputs in South Australia is analysed. High levels of wind generation in that State have been found to have a strong secondary effect on spot prices. Wind generation's low operating costs will see it displacing higher operating cost fossil-fuel plant at times of high wind. At the same time, the increased variability of wind may impose additional challenges and costs on conventional plant which will also be reflected in wholesale spot market prices. It is shown that this is proving particularly important during high wind penetration periods, which are contributing to an increased frequency of low or even negative prices. The solar resource in South Australia is shown to be highly variable; however, as seen with wind power, geographical dispersion of generators can significantly reduce power variability, even with as few as six sites. The correlation of the solar resource with spot prices also appears to be superior to wind generation. Modelling using the Adelaide solar resource showed that, for electricity sold into the spot market, two-axis tracking solar generators would achieve an average price that is over twice that received by wind generators over the year 2008-9 analysed. Of course, significant solar generation deployment might drive similar price impacts as seen with wind generation, thereby reducing this advantage. Considering the potential implications of both major wind and solar generation within South Australia, the solar and wind resources within the State appear, on average, to be non-correlated for the magnitude, and the change in magnitude, across half an hour. The analysis shows that solar and wind resources within the NEM have key characteristics that can markedly impact on their energy value within the wholesale electricity market. High levels of renewable electricity are already affecting spot prices, highlighting the need for low bidding renewable generators to attain power purchase contracts and for developers to consider this effect when choosing a site location for renewable generators. Other generators within the NEM may also be significantly impacted by major renewable energy deployment. The long-term success of renewable generation will likely depend on maximising the energy value that it contributes to the electricity industry.Energy value, Integration, NEM, Solar, Variability, Wind, Environmental Economics and Policy, Resource /Energy Economics and Policy,

The economics of transmission constraints on wind farms: some evidence from South Australia

The impacts of transmission congestion and network investment on the development of the Australian wind energy industry have received growing attention from wind farm developers as well as relevant policy stakeholders such as the Australian Energy Market Commission (AEMC). There are many potential wind farm sites across the country with excellent wind regimes yet only limited transmission capacity. At least one wind farm in South Australia has spent a period following construction where its output was curtailed by transmission constraints (NEMMCO, 2009). Current market rules do not guarantee dispatch to an existing wind farm as more wind generation connects to the same transmission. Given the expense of transmission network extension and augmentation, there are interesting questions of what economic impacts such constraints might have for wind farm operators. This paper examines this issue in the context of the South Australian region of the Australian National Electricity Market (NEM). The State currently hosts almost half of total Australian wind generation capacity and has significant transmission capacity limitations for further development. Half hour wholesale electricity spot prices were used along with generation data from nine South Australian wind farms over the 2008-9 and 2009-10 financial years to assess the potential impact that transmission constraints might have had on wind farm revenue. Results showed that a number of the wind farms would have suffered only very limited revenue reductions from having significantly greater wind farm capacity than the rating of their transmission connection to the NEM. Importantly, some wind farms could be limited to a maximum power output of half their rated capacity and still achieve higher capacity factors then other already existing unconstrained wind farms. The key reasons for this are that wind farms do not generate at rated capacity for a great deal of the time over the year, periods of high wind generation appear to be associated with lower wholesale prices and there is significant variance between the wind farms capacity factors. Our findings suggest that there may be circumstances where wind farm developers might benefit from installing more wind turbines than the capacity of their transmission connection

The economics of transmission constraints on wind farms: some evidence from South Australia

The impacts of transmission congestion and network investment on the development of the Australian wind energy industry have received growing attention from wind farm developers as well as relevant policy stakeholders such as the Australian Energy Market Commission (AEMC).There are many potential wind farm sites across the country with excellent wind regimes yet only limited transmission capacity. At least one wind farm in South Australia has spent a period following construction where its output was curtailed by transmission constraints (NEMMCO, 2009). Current market rules do not guarantee dispatch to an existing wind farm as more wind generation connects to the same transmission. Given the expense of transmission network extension and augmentation, there are interesting questions of what economic impacts such constraints might have for wind farm operators. This paper examines this issue in the context of the South Australian region of the Australian National Electricity Market (NEM). The State currently hosts almost half of total Australian wind generation capacity and has significant transmission capacity limitations for further development. Half hour wholesale electricity spot prices were used along with generation data from nine South Australian wind farms over the 2008-9 and 2009-10 financial years to assess the potential impact that transmission constraints might have had on wind farm revenue. Results showed that a number of the wind farms would have suffered only very limited revenue reductions from having significantly greater wind farm capacity than the rating of their transmission connection to the NEM. Importantly, some wind farms could be limited to a maximum power output of half their rated capacity and still achieve higher capacity factors then other already existing unconstrained wind farms. The key reasons for this are that wind farms do not generate at rated capacity for a great deal of the time over the year, periods of high wind generation appear to be associated with lower wholesale prices and there is significant variance between the wind farms capacity factors. Our findings suggest that there may be circumstances where wind farm developers might benefit from installing more wind turbines than the capacity of theirtransmission connection.

Renewable energy integration into the Australian National Electricity Market: Characterising the energy value of wind and solar generation

This paper examines how key characteristics of the underlying wind and solar resources may impact on their energy value within the Australian National Electricity Market(NEM). Analysis has been performed for wind generation using half hour NEM data for South Australia over the 2008-9 financial year. The potential integration of large scale solar generation has been modelled using direct normal solar radiant energy measurements from the Bureau of Meteorology for six sites across the NEM. For wind energy, the level and variability of actual wind farm outputs in South Australia is analysed. High levels of wind generation in that State have been found to have a strong secondary effect on spot prices. Wind generation's low operating costs will see it displacing higher operating cost fossil-fuel plant at times of high wind. At the same time, the increased variability of wind may impose additional challenges and costs on conventional plant which will also be reflected in wholesale spot market prices. It is shown that this is proving particularly important during high wind penetration periods, which are contributing to an increased frequency of low or even negative prices. The solar resource in South Australia is shown to be highly variable; however, as seen with wind power, geographical dispersion of generators can significantly reduce power variability, even with as few as six sites. The correlation of the solar resource with spot prices also appears to be superior to wind generation. Modelling using the Adelaide solar resource showed that, for electricity sold into the spot market, two-axis tracking solar generators would achieve an average price that is over twice that received by wind generators over the year 2008-9 analysed. Of course, significant solar generation deployment might drive similar price impacts as seen with wind generation, thereby reducing this advantage. Considering the potential implications of both major wind and solar generation within South Australia, the solar and wind resources within the State appear, on average, to be non-correlated for the magnitude, and the change in magnitude, across half an hour. The analysis shows that solar and wind resources within the NEM have key characteristics that can markedly impact on their energy value within the wholesale electricity market. High levels of renewable electricity are already affecting spot prices, highlighting the need for low bidding renewable generators to attain power purchase contracts and for developers to consider this effect when choosing a site location for renewable generators. Other generators within the NEM may also be significantly impacted by major renewable energy deployment. The long-term success of renewable generation will likely depend on maximising the energy value that it contributes to the electricity industry

Renewable energy integration into the Australian National Electricity Market: Characterising the energy value of wind and solar generation

This paper examines how key characteristics of the underlying wind and solar resources may impact on their energy value within the Australian National Electricity Market (NEM). Analysis has been performed for wind generation using half hour NEM data for South Australia over the 2008-9 financial year. The potential integration of large scale solar generation has been modelled using direct normal solar radiant energy measurements from the Bureau of Meteorology for six sites across the NEM. For wind energy, the level and variability of actual wind farm outputs in South Australia is analysed. High levels of wind generation in that State have been found to have a strong secondary effect on spot prices. Wind generation‟s low operating costs will see it displacing higher operating cost fossil-fuel plant at times of high wind. At the same time, the increased variability of wind may impose additional challenges and costs on conventional plant which will also be reflected in wholesale spot market prices. It is shown that this is proving particularly important during high wind penetration periods,which are contributing to an increased frequency of low or even negative prices.The solar resource in South Australia is shown to be highly variable; however, as seen with wind power, geographical dispersion of generators can significantly reduce power variability, even with as few as six sites. The correlation of the solar resource with spot prices also appears to be superior to wind generation. Modelling using the Adelaide solar resource showed that, for electricity sold into the spot market, two-axis tracking solar generators would achieve an average price that is over twice that received by wind generators over the year 2008-9 analysed. Of course, significant solar generation deployment might drive similar price impacts as seen with wind generation, thereby reducing this advantage. Considering the potential implications of both major wind and solar generation within South Australia, the solar and wind resources within the State appear, on average, to be non-correlated for the magnitude, and the change in magnitude, across half an hour. The analysis shows that solar and wind resources within the NEM have key characteristics that can markedly impact on their energy value within the wholesale electricity market. High levels of renewable electricity are already affecting spot prices, highlighting the need for low bidding renewable generators to attain power purchase contracts and for developers to consider this effect when choosing a site location for renewable generators. Other generators within the NEM may also be significantly impacted by major renewable energy deployment. The long-term success of renewable generation will likely depend on maximising the energy value that it contributes to theelectricity industry.

Fundamental investigation into the design and operation of a high flux sodium receiver

This thesis aims to answer the question: What fundamental information is required to allow successful design and operation of a high flux sodium billboard receiver? The thesis also presents a design and associated analysis for a high flux billboard receiver that is a possibility for being a cost effective alternative to the state-of-the-art CSP power tower technologies based on molten salt heat transfer fluids. The motivation behind the work is to help achieve a solar thermal generation system that can be competitive with conventional generation technologies. Concentrated solar thermal power plants using heliostat-tower technology are expected to provide a path for achieving large-scale deployment of electricity generators that use a renewable resource. However, as yet, current state of the art heliostat-tower systems, have not achieved cost levels that make them competitive with conventional generation technologies.In a heliostat-tower system, the costs largely derive from the heliostat field. Thus, system design must ensure that the heliostats can be a low cost design and that the system efficiency is maximised through better integration of the components. External tubular planar receivers (billboard receivers) using liquid metals provide a possibility for achieving these goals whilst maintaining design simplicity and a low risk design.To assist with the design and operation of billboard receivers this thesis investigates liquid sodium as a suitable heat transfer fluid, and compares its use as a heat transfer fluid to the current state of the art; a nitrate salt, commonly known as Solar Salt. The results show that high heat transfer rates achievable with liquid sodium can greatly simplify receiver geometry and allow for high flux intensities, increasing receiver efficiency.As the melting temperature of sodium is still above ambient temperatures, the risk of solidification of the sodium in the receiver remains an issue. To assist with receiver operation, this has been addressed through a validation of a methodology for the simulation of the melting and solidification of sodium in solar thermal components.To assist with design of billboard receivers a study of the receiver surface temperatures that result from an incident flux from the heliostat field has been undertaken for four different receiver concepts. From this work, a new concept is presented that best mitigates the issues of a non-uniform flux. The studies presented in this thesis provide insights into the design and operation of high flux sodium receivers, with the hope that the contributions will assist in the successful deployment of heliostat-tower technologies

High penetration wind generation impacts on spot prices in the Australian national electricity market

This paper explores wind power integration issues for the South Australian (SA) region of the Australian National Electricity Market (NEM) by assessing the interaction of regional wind generation, electricity demand and spot prices over 2 recent years of market operation. SA's wind energy penetration has recently surpassed 20% and it has only a limited interconnection with other regions of the NEM. As such, it represents an interesting example of high wind penetration in a gross wholesale pool market electricity industry. Our findings suggest that while electricity demand continues to have the greatest influence on spot prices in SA, wind generation levels have become a significant secondary influence, and there is an inverse relationship between wind generation and price. No clear relationship between wind generation and demand has been identified although some periods of extremely high demand may coincide with lower wind generation. Periods of high wind output are associated with generally lower market prices, and also appear to contribute to extreme negative price events. The results highlight the importance of electricity market and renewable policy design in facilitating economically efficient high wind penetrations.Wind power integration Market price Electricity demand