Comments on the Finkel Report

This post documents some commentary on the “Finkel Report” for the Australian government on the future security and market operation of the NEM electricity system of Eastern Australia, available here:

http://www.environment.gov.au/energy/national-electricity-market-review

The Finkel Report is part of a consultation, and I urge Australians (and others) to read it and to make submissions about it, instructions for doing so are provided at the above link, with a closing date of 21st February 2017.

I believe that there is a need to challenge some incorrect statements in the report, which may lead to insufficient electricity capacity if those misleading statements remain. In several places the report talks about wind and solar generators replacing coal generators, which might be excused as sloppy language (it would be OK if the word generation replaces the word generators), but then on page 25 there is the following:

“One characteristic of wind and solar PV generators is their intermittency. As a result, their capacity to deliver electrical energy is lower than that of a coal-fired power station of an equivalent size – for wind by approximately half, and for utility-scale solar PV, by approximately a quarter.”

This reader gets the impression that the authors of the report believe (incorrectly) that some large percentage of the highest peak demands can be met by wind and solar, and that the only problems will be related to grid stability and market changes to ensure smooth upward trends in renewables, and smooth but limited downward trends in conventional generators, and improvements in the fuel supply chain for the latter.

The following figure, together with recent LOR2 notices from AEMO, suggests that the downward trend in non-wind supply in South Australia has reached its lowest possible point, and increasing wind or solar power cannot replace any further losses of firm capacity in the foreseeable future:

The figure above shows how a varying wind capacity in South Australia could change the demands placed on non-wind supply, for each of the 8 heatwaves in the summer of 2015/16. There are two key characteristics of SA wind power shown in the figure above:

• Most of the peak demands on non-wind supply were reduced by only several hundred MW, and half of those reductions were less than 160 MW
• Further increases in SA wind power capacity have very little effect, because the existing wind power pushes the highest non-wind demands to times of very low wind power, sometimes on different days of a heatwave

On several 2015/16 heatwaves the current SA wind power pushed peak non-wind demand times to wind minima that occurred after dusk, meaning that further solar power will have no effect on those peak demands. The hottest day of the summer provides a good example of the rapidly diminishing effect of wind and solar power on peak demand:

On 19th December 2015 (the first day shown in the figure above) the existing wind power contributed 300 MW to peak demand, but the time of peak demand on non-wind sources shifted to a deep wind power lull after sunset (see the green wind power line on the figure above).

Conclusions

The Finkel Report does not convey an accurate picture of the very limited ability of wind and solar power to contribute to reducing peak demands on conventional sources of supply, and therefore it fails to identify the precarious position of South Australia, which cannot afford to lose any more firm capacity for the foreseeable future, even with a continuing increase in wind and solar generation.