Originally Posted By: JHZR2
Thanks for that link. Page 7... wow.
Again, it's pretty well spun, but I'll add some Commentary. It's not meant to be political, just how Oz got where we are.
Oz used to have centralised generating bodies for each state. Model was to build new generation baseloaders (bigger and more efficient), and then cycle the older less efficient units until their reliability failed, and retire them....rinse and repeat. It, being centralised was a cost recovery model, and with social agendas in mind provided cheap power for smelters etc. etc.
On that page, Munmorah and Hazelwood were on the way out in the mid 90s.
In the '90s, the new electricity market was introduced, and concurrently breaking up of power station assets into sub groups, and privitisation occured...my State, where there was one generating body got three competing generators.
The market was/is a strange bidding arrangement, where you bid to get in, but get paid for the highest MWh that's scheduled into the grid. So if you have 1,000MW, bid in at $1, and the market needs 1,001, and I'm the next cheapest bid at $100, I get 1MWx$100, you get 1,000MWx$100, not your bid times your capacity...pretty quickly that lead to the understanding that zero bids got you maximum revenue, and one glorious day, enough people bid zero that the hydros pumped all day for free.
(Personally I think your bid should be solid...you get what you bid, not the highest price on the market...)
On days when capacity is constrained, it can go up to $14,000/MWh, and conversely can go to (-) $1,000.
If as a generator, you have a fixed contract with a customer, and a unit trips, naturally the extra capacity to make up for your loss has to be called in, the price goes up, and you have to buy at that price to cover your contract...can get expensive.
So the industry as a whole reacted by "baseloading" the old stations at 80% of their max load (for reliability), and peaking with the new plant...(as an efficiency engineer for part of my career, I can state with assurety that the thermal efficiency of the state dropped markedly during this period...by around 2%, out of 36%).
We had a carbon tax for a while, that skewed things, it's gone, and that skewed things (not political, or that topic that can't be discussed, it was there, gas ruled, then it wasn't)
We had A GFC, and demand crashed, along, obviously with prices in an over supplied market...we lost Wallerawang to the fallout from that.
We've (as a country) oversold naturalgas globally, such that the domestic wholesale price has gone from $4.30/GJ to $10/GJ...my home gas prices are more expensive than unleaded or diesel per MJ...Gas peaking plants (and last summer, some WERE running diesel) set the max MW in on the grid on the day typically.
Now with the renewables...they aren't schedulable, and they bid themselves in at $0, and harvest all of the energy that they can...in a rational engineering sense, that's what they should be, but with market and economics, it's not that easy.
They also get a Renewable Energy Certificate, of around $80 ish (it's it's own market)...so at $100/MWh market price, they earn $180, off a zero bid...the price can go to -ve quite some amount and they still make money.
But they are at the distruptive stage ATM...
There's enough capacity to crash the price to zero or below, which gets the thermals running at negative cost (loss), and makes them non viable..they close down, like Northern did, with very short notice as owners/investors can't live losing money for the common good...new legislation is going to require three years notice to close...it's wrong, you can't and shouldn't force a business to stay in operation...if you elected to trade insolvently, you'd go to jail.
There's not enough capacity for them to carry the grid. For every 1,000MW of thermal that you close down, you need 3,000 to 4,000MW nameplate of solar/wind to harvest the same amount of energy in a 24 hour period, plus somewhere to put it until you need it...that's not there.
End result is that higher cost traditional generators exit the market, the wholesale price goes up during peaks and low wind day, and the media and interest groups slam the remaining generators for the costs...and there's blackouts, and that's what South Australia is trying to manage, while maintaining their appearance, thus the spin.
This is the stage where the "orderly transition" is supposed to be taking place, and in a system driven by a (flawed) market system rather than policy, we are getting nonsensical outcomes.
Hope that I've kept everything on the right side of the R/S/P rules in trying to inform, without adding some of my felt emotions.
. Positively prehistoric! If memory serves I think that Solar picked up the small backup turbine business from Allied-Signal before it merged with Honeywell. Those were for small business I believe and usually powered by naural gas but they had fuel flexibilty to some extent. Any idea what those tiny, air bearing turbine generators sell for on the market?
