State election day chills; South Australia hit $9,934/MWh on 19 March

This remarkable wind penetration level, i.e., ~2140MW of total wind capacity, can however occasionally act as a double-edged sword when wind contribution is not as usual in meeting the demand, putting South Australia (SA) in an unpleasant circumstance.

Although enough local and interconnector capacity is in place to save the day and meet the demand in such an event, it can be at a significantly high cost.

In this Chart of the Week, we take a closer look at South Australia’s electricity prices during state election day on Saturday 19 March 2022, where wind generation was very low, resulting in $9,934/MWh of electricity price at 6.15pm.

It was the second time in March that distillate became online with $1811/MWh of average value this time.

The chart below shows SA’s energy balance figures on 19 March 2022, including:

• Left-hand side: a comparison of import, export, and wind generation between Saturday 19 March and the day before, i.e., Friday 18 March.
• Right-hand side: SA’s 5-minute prices, local generation, and import from Victoria on Saturday 19 March, between 4.45pm-7.40pm.

From the left-hand side chart, we can see that the total wind generation has reduced from ~20GWh on Friday to ~9.7GWh on Saturday, which indicates a low generation rate, mostly due to the sudden reduction in wind during the evening time with an average of ~90MW while morning wind generation was on average of ~600MW.

This reduction in wind generation was enough to put SA in a net importer role on Saturday 19 March, importing ~9.7GWh from Victoria through both V-SA and V-S-MNSP1.

This shows the dependency of SA on interconnector capacity when the local wind generation is low. Accordingly, any interconnector constraint can pose a noticeable effect on SA’s prices and its local dispatch in such event.

A great example of such an event is seen at the right-hand side of the chart where the interconnector flow reduced by 40MW at 6.15pm Saturday (regarding export limits from Victoria, while interconnector flow was maxed out), resulting in more local supply being required where distillate becomes online, pushing the price up to $9,934/MWh.

This observation is a great example of SA’s challenge in meeting its demand when wind is installed strongly but dead on some days.

According to the dispatch history, batteries could not do much during this event as the installed battery capacity in SA is not large (only 1.5% contribution in supplying demand on 19 March 2022).

Such observation indicates that it is still necessary to identify methods/technologies to enable cheaper generation capacity (such as batteries) during low wind periods to avoid price spikes.

Author: Mehrdad Aghamohamad, energy market analyst, Cornwall Insights Australia