Internationally certainly, interstate maybe... but things are done differently in SA!
A few points regarding power supply though.
Electricity suppliers bid to sell their power into the National Energy Market, the prices reflect demand. Like any other bid, the lowest price sells their power first, if there’s still demand other suppliers bids get accepted. A major thing to know here is that all providers get paid according to the highest bid. It sounds dodgy, but it isn’t!
Anyway, years ago, it worked rather well. Coal supplied power 24/7, as you never shut down a coal powered station. Often it sold power at less than cost price, like in the middle of the night when demand is low.
When demand picked up, Northern could sell it’s power at a higher rate and make a profit, and if demand required the more expensive gas power stations to start up, even better, as Northern still got paid the higher rate. It was a system that was reliable and cheap.
All this changed when wind farms started appearing all over the SA countryside. Suddenly they could undercut Northern’s bids as their day to day expenses are so much lower (fully manned power station, rail line, coal mine etc vs a turbine on a hill). This led to situation where wind ate into Northern’s market share, gas turbines were not needed anywhere near as much and the overall price paid to suppliers was lower, Northern didn’t make enough profit and so it shut, years before its use by date.
There’s a fair bit more to this story, but I’ve tried to summarise as much as I can.
If there’s a moral to this story, it would be this is what happens when politicians use the energy market to score points with the electorate!
I believe the SA govt also gave preference to buying wind over coal, not sure of details.
Maybe of interest to some
SA - 2 years 2006-2008, basically before any major wind or solar
GWh % Price
Wind 146 0.5
OCGT 860 3.0 $149/MWhCCGT 8243 29 $60
Gas Steam 5968 21 $73Coal 10280 36 $56
Import 2821 10 $57
Total 27, 507 GWh average price $68/MWh
Exported 819 GWh $62/MWh
SA - 2 years 2014-2015, Prior to closure of Northern, March 2016
GWh % Price
Wind 8635 29 $37
OCGT 942 3.2 $77/MWhCCGT 4940 17 $49
Gas Steam 3930 13 $66Coal 5653 19 $48
Import 4160 14 $56
Total 29, 147 GWh average price $49/MWh
Exported 702 GWh $27/MWh
You can see that with more wind coming in, that nearly 50% of output was lost from the cheapest thermal producers, Pelican and Northern. Gas Steam also took a hit, which is fine, but SA imported twice the amount of power and exported for alot less price wise.
ie wind is progressively killing the viability of the base load producers.
SA - 2 years 2017-2018, 2 years after Northerns closure in March 2016
GWh % Price
Solar 2400 8 $125
Wind 10611 36 $84
OCGT 1002 3.4 $255/MWhCCGT 7361 25 $118
Gas Steam 5423 19 $154
Import 2468 8 $76
Total 27, 289 GWh average price $136/MWh
Exported 1964 GWh $76/MWh
So with the loss of Northern
- The most expensive form of power OCGT, has increased slightly
- The Gas Steam output (also not cheap but an effective backup for the state) is progressively being reduced, which may one day see it close
- The state didn't import as much, likely due to growing solar more than wind
- Cost of wind power doubled
- CCGT output has improved but still not same as before wind.
- Exports increased 3 x,
- but overall the price has increased significantly as the state is now pushed onto more expensive options to compensate for when the wind doesn't blow.
Remember the HV inter-tie into NSW will only provide a greater means for SA to export power rather than cause a domestic surplus and see power prices drop and imports during times of typically high demand interstate as well as SA.
Likely the only way to resolve SA's power price issues is for a home grown base load provider(s) which is ring fenced against the variation of wind output and allow them to operate at their most efficient most of the time. If wind output is therefore forced into a surplus, this will see lower prices while protecting the state during times of low wind.