These renewable sources require no fuel, and so have
very low operating costs. This allows them to enter the market at low prices (or
even negative prices if production subsidies or generation mandates are in place).
As a consequence, with the current power-generation mix in the OECD (including Australia), dispatchable technologies will suffer due to
lower average electricity prices and reduced capacity factors when a
significant quantity of low-cost renewable energy is available. (That is, dispatchable units will more often be forced to ramp down their output when there are high flows of low-cost renewable energy, yet will still need to be ready to ramp up again when the output from variable renewable generators is not sufficient to meet the total demand across the grid
Renewable Energy's Hidden Costs? - The Energy Collective
So the problem is that the cheap energy is intermittent. Yet we have seen that problem solved in Australia with a 100 MW battery from Tesla. In fact, that battery is going to pay for itself in just the first year of use.
How Tesla's big battery is bringing Australia’s gas cartel to heel
On Sunday 14 January something very unusual happened.
The Australian Energy Market Operator called – as it often does – for generators in
South Australia to provide a modest amount of network services known as FCAS, or frequency control and ancillary services.
This time, though, the market price did not go into orbit and the credit must go to the
newly installed Tesla big battery and the neighbouring Hornsdale windfarm.
The call for 35MW of FCAS – usually made when there is planned maintenance or a system fault on the interconnector between Victoria and South Australia – has become a running joke in the electricity market, and a costly one for consumers.
The big gas generators – even though they have 10 times more capacity than is required – have systematically rorted the situation, sometimes charging up to $7m a day for a service that normally comes at one-tenth of the price.
(You can read reports on how they do it
here,
here and
here, and for a more detailed explanation at the bottom of this story.)
The difference in January was that there is a new player in the market: Tesla. The company’s
big battery, officially known as the Hornsdale Power Reserve, bid into the market to ensure that prices stayed reasonable, as
predicted last year.
Rather than jumping up to prices of around $11,500 and $14,000/MW, the bidding of the
Tesla big battery – and, in a major new development, the adjoining Hornsdale windfarm – helped (after an initial spike) to keep them at around $270/MW.
This saved several million dollars in FCAS charges, which are paid by other generators and big energy users, in a single day.
It would not take a lot of these to reduce the cost of electricity in the EU, and allow the retirement of more coal and gas plants.
Anyone stupid enough to buy into that is in for a surprise.. Speaking of Clueless partisan hacks... Toro sure took that one full stupid...
