Energy markets and the implications of renewables
South Australian case study
South Australia’s renewable penetration has increased to the extent that both solar and wind are having a material impact on the market.
South Australia finds itself at the cutting edge of contemporary electricity grids. It’s renewable resources are in the form of wind and the sun; resources described as 'intermittent' – they are only available when the wind is blowing or the sun is shining.
There are other regions that have more intermittent renewables, like Denmark and Iowa, but they have strong interconnection to neighbouring regions which facilitate the import or export of electricity equivalent to their peak demand. By contrast, South Australia’s interconnection with Victoria is equivalent to only about 23 per cent of its peak demand.
South Australia sits just behind these two regions in wind per capita and leads the world in solar per capita which puts it some way ahead of the rest of Australia.
This study, commissioned by Energy Supply Association of Australia, analysed the impact that wind and solar generation are having on the wholesale and derivative markets in SA and the potential impact on grid stability. Our analysis looked ahead to a potential future where such technologies provide around 70 per cent or more of the state’s generation and considered how robust the market is to these outcomes.