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Energy Prices Skyrocket in South Australia (yahoo.com) 269

Slashdot reader sycodon quotes an article from AFR: Turmoil in South Australia's heavily wind-reliant electricity market has forced the state government to plead with the owner of a mothballed gas-fired power station to turn it back on. The emergency measures are needed to ease punishing costs for South Australian industry as National Electricity Market prices in the state have frequently surged above $1000 a megawatt hour this month and at one point on Tuesday hit the $14,000/MWh maximum price...
"A planned outage of the Heywood Interconnector to Victoria, coupled with higher than expected gas prices and severe weather conditions have contributed to large-scale price volatility in the energy spot market in recent days," said South Australia's energy minister, Tom Koutsantonis. The Australian Associated Press adds that "The state Labor government has invested heavily in wind and solar energy at the expense of baseload power, a move critics say has left the state exposed during poor weather. Mr. Koutsantonis has described the energy volatility as a failure of the national energy market because a lack of interconnection means South Australia often produces more renewable power than it can sell into the grid. But opposition spokesman Dan van Holst Pellekaan said the government had been too hasty to invest in renewables."
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Energy Prices Skyrocket in South Australia

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  • hmmm, maybe they could become the leaders in renewable energy storage? the world needs such tech badly, just sayin'

    • by Luckyo ( 1726890 )

      You could be the best one on the planet, and it will do pretty much nothing on the scale needed here.

      It's not about being leaders. It's about technology not existing, and not being easy to invent.

      • by dbIII ( 701233 )
        Total capacity in this case is only 2 GW. There are single hydro projects that size let alone other storage solutions.
        Perhaps it's time to give up instead of going on about "technology not existing" when off the top of your head you should have thought of one that could have done the job decades ago.
    • Re: (Score:2, Insightful)

      by rtb61 ( 674572 )

      Ahh, the sweet, sweet profits of privatised energy. Fuck society, fuck the community, more, More, MORE, profits now. Yeah, everyone knew but corrupt government and voilÃ, bullshit exposed as bullshit. Privatisation is not about saving anything, it is about squeezing more profits out of society, up to it's death or the peasants revolt (they don't care, as long as they are rich and powerful right now, aftermath somebody else's problem). They desperately trying to come up with excuses, you know like, too

      • Nobody controls the wind or the sun. You can be independent of evil energy companies.

        Have at it!

        • Nobody controls the wind or the sun. You can be independent of evil energy companies.

          Have at it!

          Except when it's calm and cloudy.

          • by dbIII ( 701233 )
            Go ask granddad about windmills pumping water. Calm days didn't make people give up on a good idea, they just made them plan for the future.
        • Nobody controls the wind or the sun.

          Tell that to Cobra Commander.

      • Profit has little to do with it. This is a purely mathematical response - the profit (or loss when there's excess supply) is representative of the disparity between supply and demand. If there's excess demand, prices go up encouraging more buildout of supply (unless that's being blocked by government). If supply exceeds demand, prices go down encouraging the shutdown of less-efficient or unnecessary production.

        Putting it under the umbrella of government regulation doesn't change the underlying cause a
        • I find it amusing that some of the same people that cheer renewables' role in driving negative pricing jump to conspiracy theories when the swing is in the other direction. Both are indicators of structural issues, both market structure and/or physical generation, transmission, distribution structure. In the real world its typically a mix.

          Spot market pricing is difficult when dealing with a instantaneous demand/supply/response market. The highs and lows are naturally extreme, and volatility is to be expe
        • If there's excess demand, prices go up encouraging more buildout of supply (unless that's being blocked by government). If supply exceeds demand, prices go down encouraging the shutdown of less-efficient or unnecessary production.

          That only works on a long-term sense, not on an hour-by-hour or day-by-day scale. Electricity price changes or gasoline price changes on the spot market don't do anything for "encouraging buildout of more supply".

          There is also the pesky asymmetry in most (all?) industries where e

        • If you fix the prices and there's a shortfall of supply, instead of prices going up you get shortages.
          No you don't.
          As the law demands that you supply the power.

          Pretty easy. Done all over the world, just not in fucked up countries like yours.

      • by johannesg ( 664142 ) on Sunday July 17, 2016 @02:03AM (#52527215)

        Renewables are not a reliable source of energy: their production levels vary as whatever natural phenomenon they depend on varies. This was known well in advance, as was the necessity to maintain classic plants for base load. A political choice was made not to maintain sufficient plants for base load, and since production through renewable sources does not have sufficient capacity at all times, an allocation scheme for times of tightness was needed - a market, so customers with very high requirements for reliable energy could simply pay more for that privilege while customers with lower requirements could choose to lower their consumption at times when production was insufficient.

        So far, it looks to me like everything is working exactly as designed. So what exactly are you complaining about? Blackouts? Those were a known and expected feature of having a high level of renewables without enough classic plants. Varying prices with high peaks? Those were _also_ a known and expected feature of the technology! Or is it simply that you wanted to 'save the planet', as long as it didn't inconvenience you personally with high prices and blackouts?

        Don't pretend it is all an evil plot to extort money. You made this bed, now lie in it. I'm just sad to see the people who wanted other options (nuclear, for example) having to suffer with you.

        • by dbIII ( 701233 )

          Don't pretend it is all an evil plot to extort money

          If this was the only symptom you'd have a point, but unfortunately you do not and it really is a ridiculously stupid system of a pointless middleman driving up prices Enron style right across Australia and not just in South Australia. Similar problems have cropped up in Queensland and New South Wales where renewables are close to non-existent and coal plus some gas provides just about everything.
          Nuclear is not worth considering in this situation - it is n

          • I find it hilarious when the people who shoved alternative energy down our throats all of a sudden discover "short term problems". We were supposed to think long-term, remember? It's all about the planet, not about you? Please remember that when you sit in the dark, with no airco, next time.

            As for your assertion that -somehow- the market is responsible for pricing peaks - what alternative do you propose then? There is scarcity, so an allocation must be made in some fashion. Would you prefer it to be done th

        • r natural phenomenon they depend on varies. This was known well in advance, as was the necessity to maintain classic plants for base load. A political choice was made not to maintain sufficient plants for base load
          Please stop using the term "base load" until you have read up and understand what it means. Base load plants are rapidly replaced by renewables.
          You mix up load following and peak load plants with base load. Hint: the name indicates exactly what base load is: it is nothing special.

    • by ganv ( 881057 ) on Saturday July 16, 2016 @09:22PM (#52526643)
      That is an insightful article. Hopefully we can keep this conversation at a high level. The usual thing when energy supply in transition runs into a rough patch is for many to argue that we should just keep depending on coal and natural gas. But any time you do something new, there is trial and error. Hopefully more of the forseen problems could be avoided, but humans seem to have to make mistakes before they can learn from them. As integrated wind, solar, transmission, and storage systems become more mature, we can run a stable energy system with mostly renewables and much less damage to the ecosystems we depend on. But there will be a learning curve.
      • But there will be a learning curve.

        There is not a single real technical issue at play here. It is not about energy supply, it's about manipulating the market, pure corruption.

      • Re: (Score:2, Insightful)

        by knightghost ( 861069 )

        Hope is a lie.

        This was foreseen but not avoided because it didn't follow the marketing lies of the politicians and self deceiving voters.

        It's also foreseen that an integrated system of many energies will still fail because it doesn't even out. You're exasperating peak load with least production.

        We have a perfectly good solution for carbon free economical electricity: nuclear. Even better, it only emits 1% the radiation that coal fire plants do.

        • by AmiMoJo ( 196126 )

          Other countries are doing just fine with their transitions, particularly Germany and Denmark. Energy there isn't insanely expensive, in fact it's actually a lot cheaper [europa.eu] than other dirtier EU countries. Sure, they throw some tax on top to speed the process along, but in the longer term things are really looking good for them.

          What you have in South Australia is commercial companies manipulating the market to make massive profits and try to resist the transition. What they need to do is fix the market and reig

        • We have a perfectly good solution for carbon free economical electricity: nuclear. Even better, it only emits 1% the radiation that coal fire plants do.

          Good thing carbon is the only thing we have to worry about, huh? [theguardian.com]

      • It's not really trial and error if you get the expected result, now is it? The learning curve always was "learn to enjoy sitting in the dark waiting for the lights to go back on", but since nobody seemed to care about that at the time ("I'm sure it will happen to other people"), here we are now.

        And it's just hilarious to see how the whole mess now gets blaimed on "corruption". The sad truth is that if prices were artificially lowered, demand would quickly outstrip production, and the whole system would come

    • It was predicted [imdb.com] even longer ago than that.

      It's all about the guzzoline, mate. Better learn to drive fast and hard if you want to survive.

  • by Anonymous Coward
    Corruption in the power industry has been driving up prices

    http://www.smh.com.au/business... [smh.com.au]

    Despite this Australians keep re-electing the corrupt Labor and Liberal parties anyway, so serves them right. You get what you vote for.
    • Compulsory voting + laissez-faire attitude to politics + ignorance = same government doing same shit over and over.

      Our voting system is an absolute joke. No one has any idea who or why they are voting, unless you're a xenophobe then there's the Hanson clan, but they are all just suit wearing knobs and the one who has the most charismatic appearance during the campaign wins.

    • They do say that power corrupts, especially if also exposed to moisture.

  • This kind of thing is going to happen until someone invents a viable storage system to allow renewables to cover base load.

    • This kind of thing is going to happen until someone invents a viable storage system to allow renewables to cover base load.

      what, you mean like a battery system that can scale up to the size of warehouses? [wikipedia.org]

      • While it's cool that it's scaleable and and made from widely-available non-toxic materials, salt-ion batteries have a pathetic energy density (even compared to other batteries, which are already pathetic), about 1.4 MJ/kg. Even lithium-ion, among the "best" rechargeable batteries, top out at around 2.6 MJ/kg. As a comparison, gasoline has an energy density of around 34 MJ/kg.

        According to your link, a shipping container sized battery from Aquion can store 2.88 MWh. Based on this [wikipedia.org], average worldwide power cons

        • by Zuriel ( 1760072 )
          For this type of installation, size is much less important than price. All those batteries don't need to be inside the city, put them near the power stations where land is usually dirt cheap. MWh / $ is the number you need to look at.
    • Used automotive batteries. Once they have been depleted to ~80% of their original capacity they are replaced. The old batteries can be recycled or reused in applications where weight and size are not as important as when used in automobiles. Storing excessing solar power appears to be an ideal application. One can only assume that this is why Tesla is getting into the home battery business. But Tesla does not make many cars. Once the big auto makers start releasing more electric vehicles there will be
  • This is actually perfectly normal behavior from real-time priced power markets. There's a certain point where the consumers are going to become non-responsive (you'll pay $1000/MWh if it's 90 degF in your house as the sun is setting) and that non-responsive load exceed the available generation. There needs to be enough dispatch-able generation (like the gas generator in the article) to cover all of the non-responsive load, or you get "market failures" like this, where the effective spot price climbs to in

    • Re: (Score:2, Informative)

      Exactly. Pricing in an instantaneous supply and demand market is naturally highly volatile. It just doesn't work very well even when there is a big swing on either side. You can have negative pricing at times, and spikes at other times. The high price numbers thrown out there sound crazy, but in reality its typically very short duration. The market structure doesn't yet account for all instantaneous demand/supply scenarios optimally.
      • As the people of California already know, one picture [wikimedia.org] explains it all. These are the kinds of things that justify calling for early elections to make at least a feeble effort at correcting the problem. And I hope this time the lessons of privatization fall on fertile ground.

    • This is actually perfectly normal behavior from real-time priced power markets. There's a certain point where the consumers are going to become non-responsive

      However, the end consumer doesn't get the price in real time, do they? I think the bill comes once per month. Consumers need a way to know the price in real time in order for this model to work properly.

  • by Macfox ( 50100 ) on Sunday July 17, 2016 @02:10AM (#52527235) Homepage
    Transmission and generation was privatised in South Australia in the 90's.

    The conservative government of the time provided the transmission lessee a 99 year lease with a guaranteed return. Failures in the agreement have permitted the lessee to "gold plate the network" to their advantage/profit as the cost is recovered from consumers.

    Electricity have since steadily increased to a level 2-3 times, where it's often cited as the most expensive in the world. Going off grid might work short term, but as that gains popularity, the burden of the transmission lease on the remaining few, will force the government to charge every property a supply charge.

    The subsequent price increases, combined with the (national) RET scheme, have driven a massive adoption of solar in SA. The RET also fueled a massive increase in wind farm investment, but it's important to understand that scheme is a national scheme.

    The third factor is the main interconnector to Victoria is being upgraded and presumably offline or running at reduced capacity.

    The four factor is the recent shut down of the pt Augusta Coal plant that one served the majority of state. It was switched off last month.

    Fifth factor is recent cold weather has increased demand.

    It's important to appreciate the it's a combination of all these factors that have put the state in this predicament. Not just an abundance of renewable electricity.

    Why it's only now made the news is because industry and retailers that normally get it wholesale for $50/MWh and lockin consumers at 30-40c at KWh [600-800% markup] are now losing money as these spikes get bigger and more common.

    As the current treasurer pointed out, the markets are failing as there is no incentive to put on more transmission capacity and that has largely protected the remaining duopoly baseload generators who are cashing in.

    SA just needs transmission capacity. Either interstate or to the northern geothermal sites.

    • Glad to see someone here thinks rather than just jump to conspiracy theories. Most don't appreciate the relevance of line capacity, nor the need to maintain reserve. If people want large percentage of wind and solar, they need to also pay for maintaining reserve, but that is not quite as popular politically.
  • by dbIII ( 701233 ) on Sunday July 17, 2016 @02:52AM (#52527285)
    Nothing to see here - the pricing mechanism is an insanely reactive stockmarketeers wet dream and not something that should have been implemented.
    All it has taken is a cable outage to sent prices through the roof.
    Prices going through the roof due to such an insane pricing construct reacting to an outage is given some one issue idiots an excuse to once again complain about windmills.

    So all up it's about an extreme reaction to something trivial.
  • by DMJC ( 682799 ) on Sunday July 17, 2016 @06:13AM (#52527663)
    South Australia needs to bite the bullet and get either geothermal, solar thermal, or both types of plants built and running. They have the technology. The resources, and the need. I grew up in Adelaide. The state is very forward thinking/progressive. They need to prioritise fixing this as a matter of urgency. There have been plans for about 10 years now to build a Solar Thermal plant in Port Augusta.

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