By: Giles Parkinson
South Australia is not just likely to have already met its target of 50 per cent renewables some eight years ahead of time, it is now heading for an extraordinary penetration rate of 80 per cent wind and solar by 2021.
That, at least, is the presumption of the Australian Energy Market Operator in a series of scenarios that it prepared for its submission into the Tamblyn review on the proposed second link from Tasmania to the mainland.
AEMO considered three different scenarios to assess whether that new link to Tasmania would be a good deal, and translated those into its own estimates of how much wind and solar would be built in each state over the next 5, 10, 15 and 20 years.
South Australia was an important factor in the AEMO’s deliberations on the extra link to Tasmania, because it suggested that it would make more sense if there was an extra link to South Australia, to take advantage of that state’s growing wind and solar output.
In two of the scenarios that it contemplated – the neutral one (above) based on current policies, and the ambitious climate goal of a 45 per cent reduction in emissions by 2030 (below) – South Australia’s wind and solar capacity doubled over the next five years, before coming to a halt over the following 10 years.
Consider what that means. Its current capacity of around 1,600MW of large-scale wind energy meets just over 40 per cent of total state demand, and the 720MW of rooftop solar adds another 7 per cent. When Hornsdale 2 is completed later this year, that percentage will go beyond 50 per cent.
AEMO’s forecasts suggest the capacity of wind and solar (now that it is cost competitive with wind) will double to around 3,100MW by 2121/2022. Given that the state’s rooftop solar installation is also expected to soar, this suggests at last 80 per cent of the state’s electricity demand could be met by wind and solar.
That’s not necessarily something to worry about, if properly managed, given that the CSIRO and the Energy Networks Australia canvassed a similar scenario in their Future Grids work, which they said would not affect system reliability, although they were suggesting it would happen more than a decade later.
However, it should be noted that AEMO’s forecasts were completed before the state government unveiled its energy security target, which requires that 36 per cent of its local demand be met by local dispatchable resources, and 50 per cent by 2025 – which suggests that wind and solar will need to come with storage attached.
That looks achievable, given that the state is already holding one tender for 100MW/100MWh of battery storage, and many of the new solar proposals are coming “battery ready”. One developer, Reach Solar, says solar and storage is already cheaper than gas and will be “well below” $100/MWh – the current level of wholesale prices – within a few years.
AEMO has already canvassed the likelihood that rooftop solar, alone, could account for 100 per cent of minimum demand on some occasions within the next five to six years, a situation that is likely to be repeated in Western Australia and Tasmania. Even north Queensland is building so much large-scale solar and wind that its capacity will equate to minimum within a few years.
The only scenario where South Australia’s large-scale wind and solar capacity did not double was in the “low demand” scenario, where much of future demand is met by “distributed energy”, primarily rooftop solar and storage, and energy efficiency.
But this scenario’s impact on wind and solar construction over the next five years is a little hard to understand, given that the “low grid demand” is unlikely to be evident to all within the next few years.