Improved transparency of grid-scale solar and wind to ease grid constraints

Under the new rule released by the Australian Energy Market Commission (AEMC), the developers of grid-scale wind and solar assets will have access to better and more up-to-date information about what new generation projects are in the pipeline. The network rule maker’s determination will allow the Australian Energy Market Operator (AEMO) to provide certain information to the developers to help make better investment decisions on where to locate new generators and assess project viability with an eye on grid congestion and connection challenges.

An unprecedented level of renewable energy projects’ connection inquiries is being placed with transmission network service providers and AEMO. According to AEMC, there are more than 50 GW of new wind and solar projects in development, which is roughly equivalent to the National Electricity Market’s (NEM) entire current capacity. Most immediately, an additional 5 GW of committed new solar and wind generation is expected to connect to the NEM by 2021. However, under previous rules, broad visibility of these assets was limited by confidentiality obligations.

As a result, a number of utility-scale projects across Australia have suffered connection delays or unexpected dent in revenues, such as worsening Marginal Loss Factors (MLFs). Some projects have received massive blows with their output downgraded by more than 10% as a result of changes to MLFs. Last year, AEMO warned against significant curtailment for projects located in an area with not enough grid strength. In order to improve this, developers were faced with a choice of installing additional components, such as costly synchronous condensers, as done by Total Eren on the 256.5 MWp Kiamal Solar Farm in Victoria, or simply waiting for a network upgrade, which could take years.

Currently, as part of the grid connection process, developers provide transmission network businesses with key project information such as the type of generator proposed, the technology it uses, the maximum power it can generate, and the project’s timing. Now, the final rule requires transmission businesses to share this information with AEMO. The market operator will be then able to publish more detailed, up-to-date data on proposed and existing generators on its generation information page, which can in turn help project developers assess how MLFs could change.

The AEMC’s rule also extends access to key technical information to certain types of developers who are not “registered participants”. This reflects the emergence of new business models where some developers are selling generators before connecting to the grid.

AEMC Acting Chief Executive Suzanne Falvi said the final rule is a good outcome for both developers of new generation and electricity consumers. “More efficient decisions on where to invest in new generation ultimately benefits consumers by promoting reliable supply at lower costs,” she said.

The Commission has set out an implementation timeframe that would enable the key changes to be implemented in stages by end January 2020. In an effort to address grid limitations, which top the list of developers’ concerns in Australia, AEMC also started consultation on two rule change requests from Adani Renewables about how marginal loss factors are calculated and how intra-regional settlement residues are distributed.