SA shatters record: lets talk about the elephant in the room…

As springtime rolls around in the NEM, those with interest in the market are always keeping an eye on South Australia to see just how low operational demand will go and when (not so much if) the record will be broken. This year has not disappointed.

On 11 October 2020 at 12:30, South Australia recorded operational demand of 300 MW, smashing the previous record. Like previous minimum demand observations, the biggest driver was generation from behind-the-meter solar which at its peak contributed 1 GW of output and drove down operational demand. Additionally, there was ~315 MW of grid scale solar generation at that time.

This highlights the significant level of solar penetration in SA, particularly due to the absence of wind generation on the day. However, while we can look favourably on the contribution of VRE in satisfying SA’s local requirement, there is an elephant that cannot be ignored – gas.

At the time of minimum demand (and for most of the midday intervals) generation from gas powered plants was flat at ~270 MW. As many are aware, the issue of system strength during periods of low operational demand are prevalent in South Australia therefore the minimum block of gas-powered output reflects a necessary element to maintain secure operation in the region.

Looking back through historical periods, the lowest we can typically see SA gas is around 200 MW from a combination of Pelican Point and Torrens Island B in most cases. Therefore, there is potential for this operational demand number to be incrementally lower but not much more unless the minimum requirement for gas can be reduced.

If operational demand is to continue its road to zero in SA, there will need to be either sufficient capacity to export to Victoria while keeping gas online or reduce the reliance on gas-powered generation in the SA supply mix to ensure secure operation. Exporting excess VRE to other regions is always an option however, reducing the reliance on synchronous generators is a key challenge facing the NEM as the incumbent generators (for which system strength is a by-product of participating in the energy market) exit the system.

It is also important to note that gas also served a key role in managing the solar drop off between 16:00 and 18:00. SA gas ramped up from ~400 MW to ~1,200 MW in short order to meet the peak demand requirement in the region. As the NEM continues to incorporate more wind and solar, a reliable dispatchable capacity within the region becomes much more important. Yes, interconnection can ease some of this responsibility; however, if the islanding events of this year are anything to go by; states will want sufficient capacity to handle their variability locally.

It will be interesting to determine the role that grid forming batteries and synchronous condensers can have on alleviating reliance on gas in SA. Assuming that these technologies can replicate the system strength provision, then there is increased potential for SA to move away from gas-powered generation. Potentially pumped hydro, which has been flagged for a very long time, may be developed as a replacement to gas reliance – following a similar mould to Tasmania which is really leading the way when it comes to variable renewable integration and management.