SOUTH AUSTRALIAN ELECTRICITY REPORT SOUTH AUSTRALIAN ADVISORY FUNCTIONS

Transcription

1 SOUTH AUSTRALIAN ELECTRICITY REPORT SOUTH AUSTRALIAN ADVISORY FUNCTIONS Published: August 2014

2 IMPORTANT NOTICE Purpose The purpose of this publication is to provide information about South Australia s electricity supply and demand. AEMO publishes this South Australian Electricity Report in accordance with section 50B of the National Electricity Law. This publication is based on information available to AEMO as at 30 June 2014, although AEMO has endeavoured to incorporate more recent information where practicable. Disclaimer AEMO has made every effort to ensure the quality of the information in this publication but cannot guarantee that information, forecasts and assumptions are accurate, complete or appropriate for your circumstances. This publication does not include all of the information that an investor, participant or potential participant in the National Electricity Market might require, and does not amount to a recommendation of any investment. Anyone proposing to use the information in this publication (including information and reports from third parties) should independently verify and check its accuracy, completeness and suitability for purpose, and obtain independent and specific advice from appropriate experts. Accordingly, to the maximum extent permitted by law, AEMO and its officers, employees and consultants involved in the preparation of this publication: make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information in this publication; and are not liable (whether by reason of negligence or otherwise) for any statements, opinions, information or other matters contained in or derived from this publication, or any omissions from it, or in respect of a person s use of the information in this publication. Acknowledgement AEMO acknowledges the support, co-operation and contribution of all participants in providing data and information used in this publication The material in this publication may only be used in accordance with the copyright permissions on AEMO s website. Australian Energy Market Operator Ltd ABN info@aemo.com.au NEW SOUTH WALES QUEENSLAND SOUTH AUSTRALIA VICTORIA AUSTRALIAN CAPITAL TERRITORY TASMANIA

3 EXECUTIVE SUMMARY No new capacity is required in South Australia to maintain supply adequacy over the next 10 years due to the decline in native consumption 1 under high, medium, and low growth scenarios. The Australian Energy Market Operator (AEMO) has assumed existing generation remains available. Supply adequacy Table 1 compares the 2013 and 2014 South Australian Electricity Report (SAER) supply adequacy results by providing the timing of reserve shortfalls, referred to as low reserve conditions (LRC). For 2014 this shows: No reserve shortfall under the low or medium growth scenarios, consistent with the 2013 SAER. No reserve shortfall under the high growth scenario, representing at least a four-year delay in potential LRC compared with the 2013 SAER results. This is driven by reduced electricity consumption forecasts. Table 1 Summary of reserve shortfalls Low growth scenario Medium growth scenario High growth scenario Study Timing Shortfall Timing Shortfall Timing Shortfall 2013 SAER Beyond Beyond MW 2014 SAER Beyond Beyond Beyond Surplus capacity assessment There could be between 550 megawatts (MW) and 600 MW of surplus capacity in South Australia in , and between 350 MW and 1,000 MW by Table 2 Surplus capacity range across the high, medium, and low growth scenarios Surplus (MW) (MW) South Australia ,000 Electricity consumption update In , South Australia s native consumption was 12,880 gigawatt-hour (GWh), 3.4% (452 GWh) lower than in , and 1.0% (127 GWh) higher than forecast in Under medium growth assumptions, forecast native consumption is projected to decrease by an annual average of 0.8% over the long-term outlook period ( to ). This is a faster decline than the 0.2% reported in the 2013 SAER for the same period. For summer , South Australia s maximum demand (MD) was 3,304 MW. This is 4.6% (146 MW) higher than , and 1.5% (50 MW) above the 2013 forecast under medium growth assumptions and 10% probability of exceedence (POE) conditions. Over the long-term outlook period, the 10% POE summer MD forecast is a 0.3% average annual decline, which is lower than the 0.05% decline forecast in Changes to South Australian native consumption and MD are primarily associated with: A decline in large industrial forecasts due to reduced electricity consumption by SA Water s desalination plant following completion of operational tests. 1 Native consumption includes all residential, commercial, and large industrial consumption, and transmission losses (as supplied by scheduled, semi-scheduled and all non-scheduled generating units). 2 Surplus capacity studies considered the impact on system reliability, and assumed that only base-load capacity is withdrawn. The studies do not consider market prices, profitability, or other costs and incentives that impact commercial decisions to withdraw generation from the National Electricity Market. AEMO

4 Annual native consumption (GWh) SOUTH AUSTRALIAN ELECTRICITY REPORT A slight decline in residential and commercial forecasts due to installation of rooftop photovoltaic (PV) systems and increased energy efficiency offsets. The 2013 and 2014 SAER annual native consumption forecasts under all three scenarios are illustrated in Figure 1. Figure 1 Comparison of 2013 and 2014 SAER annual native consumption forecasts 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, Low 2014 Medium 2014 High Actuals 2013 Low 2013 Medium 2013 High Rooftop PV contribution in South Australia Between and , rooftop PV generation increased from negligible levels to an estimated 709 GWh, which is 21.6% higher than forecast previously for Growth of rooftop PV installations was stable throughout 2013, and increasing electricity prices and decreasing rooftop PV system costs are expected to incentivise continued growth. By , rooftop PV generation is projected to reach 2,034 GWh. Generation investment trends Generation investment interest in South Australia is focused on wind generation. There are 16 proposed projects, the largest being the Ceres, Woakwine, Palmer, and Hornsdale wind farm proposals. The Snowtown Stage 2 project (270 MW) is currently generating, and commissioning is expected in the second half of The Hallett Mt Bryan and Robertstown wind farm projects are no longer being pursued. Two Torrens Energy geothermal proposals at Parachilna and Port Augusta are no longer being pursued. AEMO is responding to the evolving generation mix outlined in this report and has worked with transmission network business ElectraNet to study the operational impacts of high levels of renewable generation and low levels AEMO

5 Generation capacity (MW) SOUTH AUSTRALIAN ELECTRICITY REPORT of online synchronous generation in South Australia. In September 2014, AEMO aims to release the findings of this study following consultation with stakeholders. Figure 2 shows the capacity of existing or withdrawn generation as at August 2014, and committed or proposed projects. Figure 2 Capacity of existing or withdrawn generation, and committed or proposed projects (MW) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Coal CCGT OCGT Gas other Solar Wind Water Biomass Geothermal Other Proposed , Committed Existing (Withdrawn) Existing ,280-1, AEMO

6 CONTENTS EXECUTIVE SUMMARY 1 1. INTRODUCTION Generation maps 7 2. ACTUAL AND FORECAST CONSUMPTION AND MAXIMUM DEMAND Introduction Native consumption Native maximum demand Impact of rooftop PV generation EXISTING SUPPLY CAPACITY AND RECENT PERFORMANCE Existing generation Import and export via Victoria South Australia interconnectors GENERATION CAPACITY AND CHANGES TO SUPPLY Scheduled and semi-scheduled generation capacity Committed and potential generation developments Other changes to supply Summary of existing and proposed generation SUPPLY DEMAND OUTLOOK Supply adequacy Energy generation 30 MEASURES AND ABBREVIATIONS 31 Units of measure 31 Abbreviations 31 GLOSSARY 32 LIST OF COMPANY NAMES 34 AEMO

7 TABLES Table 1 Summary of reserve shortfalls 1 Table 2 Surplus capacity range across the high, medium, and low growth scenarios 1 Table SAER scenario reference table 6 Table 4 Comparison of SAER and NEFR data sources 10 Table 5 Registered capacity and generation by energy source 21 Table 6 Scheduled and semi-scheduled generation capacity and capacity for reliability 25 Table 7 Publicly announced and committed generation projects by energy source as at 8 August Table 8 Summary of reserve shortfalls 29 Table 9 Surplus capacity across the high, medium, and low scenarios 30 FIGURES Figure 1 Comparison of 2013 and 2014 SAER annual native consumption forecasts 2 Figure 2 Capacity of existing or withdrawn generation, and committed or proposed projects (MW) 3 Figure 3 South Australian key existing generating systems 7 Figure 4 South Australian key proposed generation projects 8 Figure 5 South Australian annual native consumption forecasts 11 Figure 6 South Australian large industrial sector annual consumption forecasts 13 Figure 7 South Australian residential and commercial sector annual consumption forecasts 14 Figure 8 South Australian summer MD forecasts (medium scenario, 10% and 50% POE) 16 Figure 9 South Australian rooftop PV installed capacity forecasts 18 Figure 10 South Australian rooftop PV generation forecasts 20 Figure 11 South Australian financial year capacity factors for scheduled generating systems 22 Figure 12 Victoria South Australia electricity imports and exports via interconnectors 23 Figure 13 Capacity of existing or withdrawn generation, and committed or proposed projects (MW) 28 Figure 14 South Australian energy generation by fuel source 30 AEMO

8 1. INTRODUCTION The SAER is an executive briefing report, summarising South Australia s supply and demand situation. This report references other publications that provide more detailed information. AEMO has prepared the SAER for the South Australian Government as a part of its 2014 South Australian Advisory Functions under section 50B of the National Electricity Law. AEMO publishes other documents under these arrangements and these are available on AEMO s website. 3 The 2014 SAER is based on the three scenarios used in AEMO s 2014 National Electricity Forecasting Report (NEFR) and Electricity Statement of Opportunities (ESOO). These are summarised in Table 3. 4 Table SAER scenario reference table 2014 SAER, ESOO and NEFR reference Scenario description Economic growth Energy consumption Carbon Consumer engagement Low scenario Low energy consumption from centralised sources Low Low Zero cost from High cost from Highly engaged Medium scenario Medium energy consumption from centralised sources Medium Medium Zero cost from Medium cost from Highly engaged High scenario High energy consumption from centralised sources High High Zero cost from Low cost from Low engagement This report includes: Chapter 2: Annual consumption and MD analysis, including recent actuals, long-term forecasts for three energy consumption scenarios (see Table 3), and the impact of rooftop PV generation. Chapter 3: Historical information about existing supply capacity, including generation located within South Australia and the interconnector power transfer capability between South Australia and Victoria. Chapter 4: Generation capacities, generation developments, and changes to supply, all of which are inputs to AEMO s modelling of the supply demand outlook. Chapter 5: Comparison of forecast supply capacity with forecast MD to identify LRC points. Additionally, the figures and tables used in this report are published on AEMO s website. 5 Information used in the SAER is sourced from other key AEMO reports, notably the NEFR and ESOO, and from data provided by market participants and potential investors. 3 Available: Viewed: 4 June These are based on the scenarios prescribed in AEMO s 2014 Planning and Forecasting Scenarios document. Available: Viewed: 4 June Available at: Viewed: 4 June AEMO

9 1.1 Generation maps Figure 3 shows the location of key existing South Australian generating systems, and Figure 4 shows key proposed generation project locations. Figure 3 South Australian key existing generating systems AEMO

10 Figure 4 South Australian key proposed generation projects AEMO

11 2. ACTUAL AND FORECAST CONSUMPTION AND MAXIMUM DEMAND 2.1 Introduction On 16 June 2014, AEMO published the NEFR 6, which includes consumption and MD forecasts for the entire National Electricity Market (NEM) and each region, including South Australia. 7 This section summarises key points from the NEFR regarding actual and forecast consumption (measured in GWh) and MD (measured in MW) in South Australia. It lists the main factors contributing to recent reductions in consumption and MD, and outlines changes to forecasts. It also describes the impact of rooftop PV generation and compares the 2014 SAER projections with those presented in the 2013 SAER. A summary of relevant definitions and methodologies follows below. More information on the NEFR methodology is available on AEMO s website Native consumption and MD definitions The SAER presents native consumption and MD data for historical results, estimates, and forecasts. Both native consumption and MD include all large industrial consumption, residential and commercial consumption 9, transmission losses, and the contribution of small non-scheduled generation. 10 Further: MD is as-generated data, measured at each generating unit terminal, and represents its entire output. Native consumption is sent-out data, and is measured at each generating system s connection point. This represents the electricity supplied to the market, and excludes its auxiliary loads Inputs to native consumption forecasts The key inputs are: Information received from customers directly, which is used for large industrial load forecasts. Total network load attributable to residential and commercial customers, less forecasts of rooftop PV output and energy efficiency savings, which is used for residential and commercial forecasts Differences between the SAER and the NEFR Being released two months after the NEFR, the data used for the SAER covers the full financial year. For rooftop PV estimates, the SAER incorporates nine months of input data compared with six months in the NEFR. Details of the differences in the data are outlined in Table 4. 6 AEMO National Electricity Forecasting Report. Available: Forecasting-Report. Viewed: 9 July AEMO National Electricity Forecasting Report. Chapter South Australia Forecasts. Available: Viewed: 9 July AEMO NEFR Forecasting Methodology Information Paper. Available at: Electricity-Forecasting- Report/~/media/Files/Other/planning/NEFR/2014/2014%20Supplementary/2014_Forecasting_methodology_information_paper_NEW.ashx. Viewed: 4 August Residential and commercial forecasts include light industrial loads. 10 Small non-scheduled generation represents non-scheduled generating units that typically have a capacity less than 30 MW. AEMO

12 Table 4 Comparison of SAER and NEFR data sources 2014 SAER 2014 NEFR Annual consumption Actuals for all of Actuals: July 2013 to March 2014 Estimates: April 2014 to June 2014 Rooftop PV Estimates based on 9 months of input data (July 2013 March 2014) Estimates based on 6 months of input data (July 2013 December 2013) The 2014 SAER reports on native consumption and MD values for consistency with the 2013 SAER. These are expressed on a different basis than the 2014 NEFR, which reports on operational consumption and MD Differences between the 2013 and 2014 historical data and forecasts Due to methodology changes 11 between the 2013 and 2014 NEFRs, consider the following when comparing 2013 and 2014 SAER results: In the 2014 NEFR, historical data and forecasts for the large industrial sector in South Australia were adjusted to include seven large industrial customers not included in that sector in Correspondingly, historical data and forecasts for the residential and commercial sector were adjusted to exclude those same seven customers that are now classified as large industrial. 2.2 Native consumption AEMO s analysis of South Australia s annual native consumption shows: In , native consumption was 12,880 GWh; 3.4% (452 GWh) lower than consumption of 13,332 GWh and 1.0% (127 GWh) higher than forecast under the 2013 medium scenario. Under the medium scenario, forecast native consumption for is expected to be 12,575 GWh, 0.2% (23 GWh) lower than the 2013 forecast. Over the long-term outlook period ( to ), average annual decline under the medium scenario is forecast to be 0.8%. This is a faster decline than the 0.2% forecast in 2013 for the same period. Figure 5 illustrates the historical trend of declining native consumption in South Australia. From to , it reduced by 742 GWh, an average annual decrease of 1.4%. This was driven by a fall in residential and commercial consumption resulting from: Sustained high electricity price growth. Strong penetration of rooftop PV generation. Slower state income growth. Increasing adoption of energy efficiency measures. South Australia s declining annual native consumption to around is primarily driven by consumer response to high electricity prices and the increase in rooftop PV generation. After , annual native consumption reduces at a slower rate due to more stable electricity price growth after and population growth. 11 These changes capture a more representative sample of both distribution- and transmission-connected large industrial customers. 12 Refer to Item 5.1 in Table 2-1 of the 2014 NEFR Action Plan Implementation. Available at: Report/~/media/Files/Other/planning/NEFR/2014/2014%20Supplementary/2014_NEFR_Action_Plan_Implementation_FINAL.ashx. Viewed: 4 August AEMO

13 Annual native consumption (GWh) Residential and commercial consumption per capita (kwh) SOUTH AUSTRALIAN ELECTRICITY REPORT Figure 5 also shows that under the medium scenario, South Australia s native consumption forecast indicates a 0.8% average annual decline over the long-term outlook period ( to ). This decline is mostly driven by: Low population growth relative to other regions, resulting in reduced residential and commercial consumption per capita. Increased rooftop PV generation and energy efficiency savings, resulting in reduced residential and commercial consumption per capita. Completion of SA Water s desalination plant testing phase, which contributes to the decline in native consumption over the short term outlook period ( to ). Primary drivers of differences between the 2013 and 2014 forecasts are described in sections and Figure 5 South Australian annual native consumption forecasts 16,000 8,000 14,000 7,500 12,000 7,000 10,000 6,500 8,000 6,000 6,000 5,500 4,000 5,000 2,000 4, , Low 2014 Medium 2014 High Actuals 2013 Low 2013 Medium 2013 High R+C per capita Note: The residential and commercial per capita data point is an estimate (population data was not available at the time of publication). AEMO

14 2.2.1 Large industrial sector As outlined in Section 2.1.4, in 2014 the large industrial sector includes re-categorised loads. 13 Data presented here is based on the 2014 categorisation of large industrial loads, unless otherwise noted. In , South Australia s large industrial consumption was 2,933 GWh, or 23% of total annual native consumption. This was 0.8% (25 GWh) lower than in (2,958 GWh). Figure 6 shows: Large industrial annual consumption increased by 661 GWh (an average annual growth rate of 6.6%) from to Over the long-term outlook period ( to ), large industrial annual consumption is forecast to decline at an average annual rate of 0.5% due to: Lower desalination plant consumption due to completion of commissioning. No new projects (beyond the 10 MW electricity consumption threshold 14 ) expected to come online. Several large industrial projects are currently undergoing feasibility studies; as these are unconfirmed, AEMO has not included them in the 2014 forecasts. 13 Refer to Item 5.1 in Table 2-1 of the 2014 NEFR Action Plan Implementation. Available at: Report/~/media/Files/Other/planning/NEFR/2014/2014%20Supplementary/2014_NEFR_Action_Plan_Implementation_FINAL.ashx. Viewed: 4 August See footnote 13. AEMO

15 Annual consumption (GWh) SOUTH AUSTRALIAN ELECTRICITY REPORT Figure 6 South Australian large industrial sector annual consumption forecasts 15 3,500 3,000 2,500 2,000 1,500 1, Low 2014 Medium 2014 High Actuals 2013 Low 2013 Medium 2013 High Using the 2013 categorisation of large industrial loads, the 2013 forecasts show: At 2,019 GWh, actual large industrial consumption was 2.9% (56 GWh) above the 2013 medium scenario forecast of 1,963 GWh. This increase is due to mining expansion and higher-than-expected consumption by the desalination plant. Over the long-term outlook period under the medium scenario, the 2014 large industrial consumption forecast shows a 0.7% average annual decline. This is similar to the 0.5% decline forecast in Similar to 2013, this reflects lower consumption by the desalination plant Residential and commercial sector As outlined in Section 2.1.4, in 2014 the large industrial sector included re-categorised loads; this had a corresponding load reduction for the residential and commercial sector. The information in this section is based on the 2014 categorisation of large industrial loads, unless otherwise noted. In , South Australia s residential and commercial sector consumption was 9,605 GWh, or 75% of total annual native consumption. This was 4.4% (444 GWh) lower than in (10,049 GWh). 15 The 2013 forecasts presented in this figure are based on the 2013 NEFR categorisation of large industrial loads. AEMO

16 Annual consumption (GWh) Residential and commercial consumption per capita (kwh) SOUTH AUSTRALIAN ELECTRICITY REPORT Figure 7 shows that from to : Residential and commercial annual consumption decreased by 1,426 GWh, an average annual decline of 3.4%. This was driven by: Average annual retail electricity price increases of 7.7% from to due to increased network costs and, to a lesser extent, the introduction of green energy policies (such as renewable energy targets and a price on carbon emissions). 16 Increased rooftop PV generation from negligible levels in to an estimated 709 GWh in These drivers might have dampened annual consumption increases expected from population growth and state income increases, which grew at annual averages of 0.9% and 1.6%, respectively, over the period. Over the long-term outlook period ( to ) under the medium scenario, residential and commercial annual consumption is forecast to decline at an average annual rate of 0.9%. This means annual consumption is not expected to return to the record highs seen in Figure 7 South Australian residential and commercial sector annual consumption forecasts 17 12,000 8,000 10,000 7,500 7,000 8,000 6,500 6,000 6,000 4,000 5,500 5,000 2,000 4, , Low 2014 Medium 2014 High Actuals 2013 Low 2013 Medium 2013 High R+C per capita Note: The residential and commercial per capita data point is an estimate (population data was not available at the time of publication). 16 AEMO has calculated the average annual retail electricity price increase from Total Electricity Price Index data published in the 2014 NEFR worksheet for South Australia, which is based on economic data provided to AEMO by Independent Economics and Frontier Economics. Available at: Viewed: 20 August The 2013 forecasts presented in this figure are based on the 2013 NEFR categorisation of large industrial loads. AEMO

17 Using the 2013 categorisation of large industrial loads, the long-term outlook for residential and commercial annual consumption under the medium scenario is a 0.6% average annual decline, compared with the 0.2% decline forecast in The difference between the 2014 and 2013 forecasts is driven by: Increased rooftop PV generation forecasts (an additional 830 GWh by ) driven by a change in AEMO s methodology for calculating rooftop PV generation combined with continued electricity price increases, and deceasing rooftop PV costs. Increased energy efficiency impacts driven by revised estimates of the impact of Minimum Energy Performance Standards (MEPS) 18 and energy rating label requirements. More information about the NEFR methodology for rooftop PV and energy efficiency is available in chapters 4 and 5, respectively, of the 2014 Forecasting Methodology Information Paper Native maximum demand South Australian MD occurs during periods of hot weather over summer. South Australia s load factor (as measured by historical average and recent lows) is the lowest of all NEM regions. 20 This indicates that South Australia has the greatest difference between the average hourly consumption and MD. Figure 8 shows that historically ( to ), South Australian MD has ranged from approximately 2,900 MW to 3,400 MW. In summer , MD was 3,304 MW, 146 MW higher than , but 120 MW lower than the record MD of 3,424 MW in Under the medium scenario, forecast 10% and 50% POE MD is expected to decline slightly at annual averages of 0.3% and 0.4%, respectively, over the long-term outlook period ( to ). 18 Information about MEPS is available at: 19 AEMO NEFR Forecasting Methodology Information Paper. Available at: Electricity-Forecasting- Report/~/media/Files/Other/planning/NEFR/2014/2014%20Supplementary/2014_Forecasting_methodology_information_paper_NEW.ashx. Viewed: 4 August Details of load factors for all NEM regions can be compared using commentary in the OP MD worksheets of the 2014 Regional Forecast spreadsheets. These are available at: Viewed: 21 July AEMO

18 Summer maximum demand (MW) SOUTH AUSTRALIAN ELECTRICITY REPORT Figure 8 South Australian summer MD forecasts (medium scenario, 10% and 50% POE) 3,500 3,000 2,500 2,000 1,500 1, Summer 10% POE (2014) 50% POE (2014) Actuals 10% POE (2013) 50% POE (2013) Analysis of the 2013 MD forecasts under the medium scenario shows: actual summer MD was 1.5% (50 MW) higher than the % POE forecast forecast 10% POE summer MD for is 1.9% (63 MW) higher than the 2013 forecast. This is due to decreased energy efficiency offsets resulting from a change in calculating energy efficiency for MD. AEMO s 2014 methodology changed by modelling rooftop PV generation on a half-hourly basis instead of using a constant factor, which reflects time-of-day changes better. Over the long-term outlook period, the 10% POE summer MD forecast is an average annual decline of 0.3%, compared with the 0.05% decrease forecast in This is primarily due to declining residential and commercial consumption resulting from higher rooftop PV generation forecasts (see Section 2.4 for more information on rooftop PV generation contribution to MD). AEMO

19 2.4 Impact of rooftop PV generation Since 2009, South Australian rooftop PV generation has grown strongly, and penetration per household is higher than any other NEM region. 21 This is primarily due to government incentives in the form of rebates and feed-in tariffs, the Small-scale Technology Certificate (STC) multiplier, falling system costs, and increasing electricity prices. These factors helped reduce payback periods, making rooftop PV generation an attractive option for households, particularly from 2010 to Rooftop PV installation growth was stable in 2013, partially due to a stabilising of government incentives. 22 AEMO expects growth to continue over the next 10 years in response to increasing electricity prices and decreasing costs of solar panels, which will allow payback periods to remain the same despite a reduction in the feed-in tariff. Based on the % POE MD forecast, AEMO estimates that at times of summer MD 23, rooftop PV generation could contribute 45% of the total installed capacity, compared with 36% and 48% in New South Wales and Queensland, respectively. The rooftop PV installed generation capacity forecasts for South Australia are shown in Figure 9. Forecasts are shown for slow, moderate, and rapid rooftop PV generation uptake scenarios. The graph also shows that within the long-term outlook period ( to ), forecast installations are below the estimated saturation levels (maximum rooftop PV generation capacity) This refers to the proportion of dwellings with a PV system. Source: Australian PV Institute (APVI) Solar Map, funded by the Australian Renewable Energy Agency. Accessed from pv-map.apvi.org.au on 5 August This refers to reduced South Australian feed-in tariffs and the STC multiplier. 23 As determined by the time MD would occur were it not for the inherent load reduction from rooftop PV. 24 The method AEMO used to calculate saturation levels is set out in Estimating saturation levels in Step 3 of Section 4.4 in the 2014 NEFR Forecasting Methodology Information Paper. Available at: Forecasting- Report/~/media/Files/Other/planning/NEFR/2014/2014%20Supplementary/2014_Forecasting_methodology_information_paper_NEW.ashx. Viewed: 20 August AEMO

20 Installed capacity (MW) SOUTH AUSTRALIAN ELECTRICITY REPORT Figure 9 South Australian rooftop PV installed capacity forecasts 2,500 2,000 1,500 1, Saturation (moderate) Rapid uptake Moderate uptake Slow uptake Estimated actuals AEMO

21 Figure 10 shows rooftop PV generation forecasts for to AEMO s 2014 low, medium, and high scenario forecasts assume different rooftop PV generation uptake scenarios. 25 This figure illustrates: Rooftop PV generated an estimated total of 709 GWh in Under the medium scenario, annual rooftop PV generation is expected to reach 2,034 GWh by This reflects average annual growth of approximately 11.1% over the long-term outlook period ( to ). Current rooftop PV generation forecasts under the medium scenario are higher than the 2013 forecasts, driven by: Higher than expected rooftop PV generation in ; 21.6% (126 GWh) above the 2013 forecasts. This was primarily due to consumers installing rooftop PV generation in response to the feed-in tariff reduction on 30 September 2013 and continued increases in electricity prices and decreasing solar panel costs. A higher STC price of $35, compared with $30 in 2013, which means a larger rebate for new rooftop PV generation rooftop PV generation forecasting methodology improvements, in particular, accounting for the effects of changes to government incentives on installation rates Refer to Section 4.3 of the 2014 NEFR Forecasting Methodology Information Paper. Available at: Report/~/media/Files/Other/planning/NEFR/2014/2014%20Supplementary/2014_Forecasting_methodology_information_paper_NEW.ashx. Viewed: 4 August Refer to Section 4.9 of the 2014 NEFR Forecasting Methodology Information Paper. Available at: Report/~/media/Files/Other/planning/NEFR/2014/2014%20Supplementary/2014_Forecasting_methodology_information_paper_NEW.ashx. Viewed: 4 August AEMO

22 Annual generation (GWh) SOUTH AUSTRALIAN ELECTRICITY REPORT Figure 10 South Australian rooftop PV generation forecasts 2,500 2,000 1,500 1, Low 2014 Medium 2014 High Actuals 2013 Low 2013 Medium 2013 High Note: High, medium, and low scenarios follow the same trajectory for 2013 forecasts, as they were all based on the 2013 NEFR moderate PV uptake scenario. AEMO

23 3. EXISTING SUPPLY CAPACITY AND RECENT PERFORMANCE This chapter describes South Australia s existing generation capacity and the interconnector power transfer capability between South Australia and Victoria via the Heywood and Murraylink interconnectors. It also describes the recent performance of these facilities. The majority of the information is sourced from the 2014 South Australian Historical Market Information Report. 27 Chapter 4 includes information on recent and proposed changes to South Australian generation. 3.1 Existing generation Table 5 compares South Australia s existing registered generation capacity with electricity generated by energy sources for scheduled, semi-scheduled, and small non-scheduled generation. In , South Australian gas-fired generation was the largest proportion of: Registered capacity, at approximately 48% of total registered capacity. Energy generation, at approximately 45% of total generation. Table 5 Registered capacity and generation by energy source Energy source South Australia registered generation capacity Electricity generated in , by energy source MW % of total GWh % of total Gas 2,672 49% 5,546 45% Wind 1,203 c 22% 3,796 c 31% Coal % 2,100 17% Rooftop PV a % 709 6% Other b 288 5% 64 1% Total 5, % 12, % a Rooftop PV is not registered with AEMO, but is included here given its material contribution to generation in Rooftop PV capacity and generation estimates as listed build on those presented in the 2014 NEFR but incorporate nine months of input data instead of six months. b Other includes generation from small diesel, landfill methane, and hydro generating systems. c Wind does not include Snowtown Stage 2 wind farm. Figure 11 shows the capacity factors for South Australian generation based on registered capacity. Typically, generating systems responding at times of MD have comparatively low capacity factors as they operate for short periods and are idle most of the year. Generating systems providing base-load generation have higher capacity factors, and produce power continuously unless shut down for maintenance. 27 AEMO South Australian Historical Market Information Report. Available: Advisory-Functions/South-Australian-Historical-Market-Information-Report. Viewed: 6 August AEMO

24 Key trends observed in are: Higher capacity factors for most gas-fired peaking generating systems, and lower capacity factors for baseload coal and gas-fired generating systems. Northern Power Station s capacity factors reduced from 59% in to 45% in This is due to Alinta Energy changing the way it operates Northern and Playford. 28 Capacity factors for all wind farms are higher than last year. Figure 11 South Australian financial year capacity factors for scheduled generating systems 100% 90% 80% 70% Capacity factor (%) 60% 50% 40% 30% 20% 10% 0% Dry Creek Hallett GT Ladbroke Grove Mintaro Northern Osborne Pelican Point Playford B Port Lincoln GT Quarantine Snuggery Torrens Island A % 1.7% 27.3% 1.0% 76.4% 74.9% 71.2% 48.2% 0.3% 15.0% 0.4% 10.5% 24.2% % 1.4% 19.6% 0.3% 84.9% 66.2% 70.2% 15.1% 0.3% 6.9% 0.1% 16.0% 24.0% % 0.5% 11.5% 0.7% 58.6% 74.6% 62.1% 13.2% 0.1% 3.3% 0.1% 12.3% 26.8% % 3.7% 13.2% 1.6% 48.2% 86.5% 71.1% 0.0% 0.2% 7.7% 0.0% 10.5% 23.8% % 2.1% 33.1% 1.0% 45.2% 93.3% 44.1% 0.0% 0.1% 12.3% 0.0% 8.0% 19.4% Torrens Island B 3.2 Import and export via Victoria South Australia interconnectors South Australia s transmission network is connected to the rest of the NEM via the Murraylink and Heywood interconnectors. These interconnectors allow electricity to flow between South Australia and Victoria. Electricity typically flows from South Australia to Victoria during periods of high generation in South Australia, and vice versa. The Murraylink Interconnector connects South Australia to north-west Victoria via the Riverland region. It has a nominal rating of 220 MW, although its actual limit depends on flow direction and local conditions. 28 Alinta Energy advised: Northern Power Station will only be available if recalled (with a recall time of up to three weeks) from 1 April 2013 to 30 September 2013 and from 1 April 2014 to 30 September After 1 October 2014 it will return to normal service. Summer operation will continue as normal. Playford B Power Station will be available with a recall time of around 90 days. Source: Generation Information Pages. Available: Viewed: 8 August AEMO

25 GWh SOUTH AUSTRALIAN ELECTRICITY REPORT The Heywood Interconnector connects South Australia to south-west Victoria. Its transformers currently limit the interconnector to transfer 460 MW, but many other factors can limit interconnector flow to less than this, including: Thermal limitations and voltage stability in the south-east South Australian transmission network. Thermal limitations and transient stability around South Morang in the Victorian transmission network. Oscillatory stability limits between Victoria and South Australia. More detailed information about constraints affecting power transfer capability between South Australia and Victoria is available in AEMO s NEM Constraint Report. 29 Figure 12 shows total interconnector electricity imports and exports between South Australia and Victoria since South Australia imports are plotted above the x-axis and exports are plotted below. Prior to , imports from Victoria dominated exports. From , this trend reversed due to factors such as more expensive interstate supply, drier or drought conditions 30, and increased wind generation in South Australia. In , imports from Victoria to South Australia exceeded exports from South Australia to Victoria almost six-fold (2,010 GWh imported, 338 GWh exported). Total imports from Victoria represented approximately 14% of total South Australian electricity consumption, while net imports (total imports less total exports) accounted for around 12%. In total imports increased by 13% compared with , total exports decreased by 11%, and net imports increased by 19%. Figure 12 3,000 Victoria South Australia electricity imports and exports via interconnectors 2,500 2,000 1,500 1, , Financial Year Imports (flows from Victoria to South Australia) Exports (flows from South Australia to Victoria) 29 AEMO. NEM Constraint Report Sections 5.5 and 5.6. Available: Operations/Dispatch/~/media/Files/Other/Dispatch%202014/The%20NEM%20Constraint%20Report% ashx. Viewed 17 July Drier or drought conditions can affect interstate hydro generation supplies. AEMO

26 3.2.1 Heywood Interconnector upgrade Heywood Interconnector power transfer capacity is expected to increase from 460 MW to 650 MW by July In February 2013, ElectraNet and AEMO completed a joint Regulatory Investment Test for Transmission (RIT-T) that identified increasing the Heywood Interconnector power transfer capability would: Provide additional capacity and reliability of electricity supply to South Australia during times of peak demand, which generally occur during summer heatwaves. Allow further development of South Australia s renewable energy resources by increasing export capacity. Alleviate electricity transmission congestion and reduce high market price events. Facilitate more efficient dispatch of generating systems in Victoria and South Australia. In September 2013, the Australian Energy Regulator (AER) determined that the preferred option satisfied the RIT-T. Following this determination, ElectraNet submitted a contingent application to recover expenditure for its proportion of the Heywood Interconnector upgrade. In March 2014, the AER approved this. Construction and development of the upgrade is underway. AEMO is responsible for the Victorian component, which involves commissioning the Heywood substation by 30 September ElectraNet has commenced construction of the South Australian components and is on schedule to commission by July More information on the Heywood Interconnector upgrade is available on AEMO s website AEMO. AEMO Heywood Interconnector Update. Available: Functions/Heywood-Interconnector-Update. Viewed: 25 July AEMO

27 4. GENERATION CAPACITY AND CHANGES TO SUPPLY This chapter describes South Australia s scheduled and semi-scheduled generation capacity, generation changes that AEMO considers in its planning, and other more speculative developments that might occur over the 10-year outlook period ( to ). 4.1 Scheduled and semi-scheduled generation capacity Table 6 shows scheduled and semi-scheduled generation nameplate rating, available capacity, and capacity available for reliability for summer and winter The figures are based on information provided by market participants. 32 Differences in scheduled and semi-scheduled generation available capacity between seasons, and also compared with the nameplate rating, arise from: Higher thermal generation efficiencies at cooler ambient temperatures. 33 The need to operate wind farm generating systems safely at higher ambient temperatures in summer. Capacity available for reliability is the same as available capacity, except for wind farms. 34 Capacity for reliability is used in AEMO s supply demand modelling. The modelling results are presented in Chapter 5. Table 6 Energy source (scheduled and semi scheduled only) Scheduled and semi-scheduled generation capacity and capacity for reliability Nameplate rating (MW) a Coal 786 Diesel 137 Gas 2,716 Wind (excludes 815 non-scheduled) Total 4,454 Summer available capacity (MW) Summer capacity available for reliability (MW) Winter 2015 available capacity (MW) Winter 2015 capacity available for reliability (MW) ,521 2,521 2,684 2, b 85 b 1,085 b 75 b 4,151 3,262 4,452 3,442 a Installed nameplate rating may differ to the registered capacity reported in Chapter 3. This data is correct as at 8 August b These figures include the committed Snowtown Stage 2 North and South wind farms. Integrating wind generation into the NEM presents new challenges for power system operation, particularly in South Australia where forecast levels of wind generation are highest in comparison to consumption. Table 6 illustrates South Australia s proportion of wind generation capacity compared with other energy sources. AEMO has completed a wind integration study 35, which investigated the potential network and operational impacts resulting from the projected increase in NEM-connected wind generation to AEMO identified operational challenges for South Australia integrating the high levels of wind generation projected by 2020, and the changing role of synchronous generation, including: 32 Additional data for the entire 10-year outlook period is available at Functions/Generation-Information. 33 These figures are based on the regional reference for South Australian temperatures of 43 C for summer and 11 C for winter. 34 Capacity available for reliability for wind farms is the available capacity multiplied by the wind contribution to peak demand factors in Section More information is available at AEMO

28 Controlling power system frequency following a contingency event due to reduced power system inertia. The potential for reduced interconnector power transfer capability, particularly under conditions of significant displacement of synchronous generation from the power system. Network limitations resulting in curtailing wind generation in South Australia and Victoria. Reduced power system fault levels at some locations, potentially leading to reduced power system performance, and challenges around system voltage control. In 2014, AEMO and ElectraNet jointly commenced power system security studies to understand the evolving generation mix and operational impacts of high levels of renewable generation and low levels of online synchronous generation in South Australia. In September 2014, AEMO aims to release the findings of this study following consultation with stakeholders. 4.2 Committed and potential generation developments Market participants and potential investors provided information to AEMO about 24 publicly announced electricity generation developments in South Australia. Of these, the only committed development is Snowtown Stage 2 Wind Farm (270 MW); the remaining projects are in the early stages of development. Table 7 aggregates the publicly announced new developments by energy source; total potential capacity is 4,671 MW. Of the 24 projects, 21 are based on renewable energy sources, including 16 wind farm projects. Wind generation comprises 3,377 MW or 72% of the 24 projects total known capacity. The largest of the proposed new generation projects are the Ceres, Woakwine, Palmer, and Hornsdale proposals and the committed Snowtown Stage 2 project. The Hallett Mt Bryan and Robertstown Wind Farm projects are no longer being pursued. The Snowtown Stage 2 Wind Farm (270 MW) consists of two separately metered wind farms: Snowtown 2 North (144 MW) and Snowtown 2 South (126 MW). They share a transmission line owned by TrustPower. Snowtown Stage 2 represented an increase of generation capacity from winter 2014, with commissioning due in the second half of The future of the Port MacDonnell (1 MW) wave energy project is uncertain following damage to its wave energy converter. Two Torrens Energy geothermal proposals at Parachilna and Port Augusta are no longer being pursued. Table 7 Publicly announced and committed generation projects by energy source as at 8 August 2014 Energy source Number of projects Capacity (MW) Capacity (%) Coal 1 TBA n/a Wave 1 1 <1 Solar 1 a 50 1 Gas 3 a Geothermal Wind 16 3, Total 24 4, a Point Patterson (combined cycle gas turbine/solar thermal project) capacity is included in both the solar and gas categories, but is counted once in the total number of projects. AEMO

29 4.3 Other changes to supply Northern and Playford B brown coal-fired power stations Northern Power Station will return to normal service from October 2014 and Playford B remains only available with a recall time of around 90 days Minor revisions to capacity Since the 2013 SAER, AEMO has not been advised of any minor capacity changes to existing generating systems in South Australia for the 10-year outlook period ( to ) Wind contribution to peak demand Based on updated historical information, AEMO has revised the proportion of South Australian installed wind generation that it considers to be firmly available to meet peak demand. The updated analysis shows that the peak demand contribution from wind generation has increased from 8.6% to 8.7% for summer, and has decreased from 7.9% to 6.9% for winter. 37 South Australia has the highest peak demand contribution from wind generation of all NEM regions. 4.4 Summary of existing and proposed generation The capacity of existing or withdrawn generation, and committed or proposed projects in South Australia is shown in Figure 13. This includes scheduled, semi-scheduled, and non-scheduled generation. 36 Alinta Energy advised: Northern Power Station will only be available if recalled (with a recall time of up to three weeks) from 1 April 2013 to 30 September 2013 and from 1 April 2014 to 30 September After 1 October 2014, it will return to normal service. Summer operation will continue as normal. Playford B Power Station will be available with a recall time of around 90 days. Source: Generation Information Pages. Available: Viewed: 8 August Data has been calculated using generation and demand data available in AEMO s Market Management System (MMS). Available at: AEMO