Rapid uptake of rooftop solar changing WEM paradigm
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June 15, 2017 - 8:00 AM
The uptake of rooftop solar continues to impact operational and peak demand, accelerating a paradigm shift for the energy industry, according to an Australian Energy Market Operator (AEMO) analysis.
Rooftop solar is estimated to have reduced 2016-2017’s peak demand in the SWIS by 265 MW or 7.2 percent to 3,670 MW on 1 March 2017, the lowest summer peak observed in the South West Interconnected System (SWIS) since 2009, AEMO’s 2017 Electricity Statement of Opportunities (ESOO) for the Wholesale Electricity Market (WEM) has found.
“The rapid adoption of rooftop solar is not only slowing annual operational consumption growth but also eroding the mid-day grid demand and shifting peak demand to later in the day,” said AEMO’s Executive General Manager – Western Australia, Cameron Parrotte.
“With the strong growth in rooftop solar installations anticipated, AEMO expects demand in the middle of the day to shrink further, resulting in a rapid increase in demand in the lead up to the evening peak once the sun sets,” said Mr Parrotte.
Typically known as the “duck curve”, this type of load profile requires generation to start and shut down more often in a very short space of time to meet demand.
“The ‘duck curve’ is a factor that may contribute to a shifting market paradigm where thermal generators are facing higher operational costs alongside reduced demand. Market and system reforms will need to be put in place to maintain system security and enable this transition at the lowest cost to consumers,” said Mr Parrotte.
Consistent with previous years, the Individual Reserve Capacity Requirement (IRCR) saw its highest IRCR response observed to date, further contributing to the lowest summer peak in the last seven years. A total of 53 customers, incentivised to reduce load during high demand periods, reduced load by 124 MW on 1 March 2017.
The 2017 WEM ESOO determined the Reserve Capacity Target (RCT) for the 2018-2019 and 2019-20 Capacity Years to be 4,620 and 4,660 MW respectively.
“While the current WEM is functioning, we need to plan ahead holistically in anticipation of a low carbon future with increased intermittent generation from renewable sources.
“AEMO continues to support the ongoing review of the Wholesale Electricity Market, working closely with policy makers and regulators to ensure future market reforms address this new reality,” said Mr Parrotte.
About the WEM ESOO
The report determines the RCT, the amount of generation capacity required to meet the forecast peak demand in the SWIS for the 2018-19 and 2019-20 Capacity Years. The RCT is an important input to determine the Reserve Capacity Price, the price paid to capacity providers in the WEM.
It presents longer-term electricity peak and operational consumption forecasts for the SWIS over a 10-year forecast period from 2016–17 to 2026–27, and provides information on generation and demand side management capacity operating in the SWIS, as well as planned capacity, capacity requirements and network development opportunities.
To view the full report, please click here.
For a PDF version of this media release, please click here.