The situation in north-west Victoria has been at the center of many discussions over the last fortnight, particularly in light of the West Murray Technical Forum held by AEMO.
Back in September 2019, issues with system strength saw five solar farms have their output curtailed by up to 50%. At the time, voltage fluctuations were cited and later the problem statement included thermal capacity limitations as well. In December 2019, AEMO launched a tender for system strength services in the area; almost confirming that without increased synchronous output in the area (via synchronous condensers or other means) the curtailments on those solar farms may not be lifted in the short term.
While the tender is likely to provide an interim solution, significant network infrastructure upgrades are likely to be required to increase the capacity to provide system strength to the area and by extension allow for increased asynchronous generation. This however isn’t expected until EnergyConnect (2023-24) or VNI West (formerly KerangLink 2026-27) come into service.
As noted by AEMO, the currently identified thermal limit for the West Murray region is around 1.7 GW. Installed and commissioned generation in this zone as at February 2020 is already 1.7 GW with around 1.2 GW committed and about 3 GW in the application phase. AEMO has also noted that it will not be possible for many of these projects to connect or generate at full output ahead of significant investment in network infrastructure. When combined with news that detailed modelling is now essential for weak areas of the grid and that AEMO is proposing to perform these assessments sequentially, it is inevitable that the assessment process (and subsequent commissioning) will be a lot slower than participants or the market initially anticipated.
This raises some key questions. When will the current curtailments be relaxed? Which projects will be fully commissioned, when do they come in and at what capacity? These questions predictably lead to another – to what extent does this situation impact the achievement of the VRET?
While wind is expected to form the majority of renewable generation in Victoria in 2025, solar still plays a significant role in achieving the VRET. Our generation forecast underpinning our Benchmark Power Curve, suggests that meeting the VRET may be tighter than earlier anticipated. Assuming that the projects under construction, commissioning and existing operate as expected (unconstrained), we anticipate the VRET to be met in 2025; however only just (42%). If projects face significant delays, or curtailments persist in their current form, there is a risk that Victoria may fall short of the 2025 target. Particularly if larger solar projects (like Kiamal Stage 2) do not go ahead as anticipated due to connection issues or the decision is made to not proceed.
The Victorian Government in a recent media release have also flagged that they are taking action to enable urgent upgrades to the energy transmission network, including fast-tracking priority projects. Details of which projects will be prioritised remains to be seen however we suspect that VNI West will be front-of-mind. The earlier build out of transmission capacity through the Bendigo-Kerang-Darlington Point corridor should improve system security in the state but will also support the expansion of the West Murray REZ, unlocking additional renewable capacity into the supply mix.