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Feature by Brandon Speedie The Electrical Grid Australia’s Electricity Distribution Networks and Markets Many readers may understand the basics of the ‘grid’ and its role in distributing energy from generators to end users. But how is supply managed to match demand? How are voltages kept within tight tolerances? And how is our grid changing as we transition away from centralised generation? Image source: https://w.wiki/6o9T A ustralia’s grid operates not as a single large transmission and distribution network, but as several isolated systems. The largest system is the National Electricity Market (NEM), covering most of the densely populated areas across the eastern seaboard – see Fig.1. The NEM is one of the longest networks in the world, stretching from Port Douglas in Queensland to southern Tasmania, and west as far as Ceduna in South Australia. Fig.2 is a close-up of the South Australian (SA) portion of the NEM. We don’t have space to show such maps for all states in this article. You can download PDF maps for all states in the NEM from the AEMO: siliconchip. au/link/abm8 Smaller grids operate in Western Australia and the Northern Territory. The South West Interconnected System (SWIS) supplies the populated areas from Geraldton through Perth to the south coast and as far east as Kalgoorlie – see Fig.4. The SWIS is sometimes also referred to as the Wholesale Electricity Market (WEM), a reference to the market that administers power in that system. 46 Silicon Chip The North West Interconnected System (NWIS) operates in the Pilbara, predominantly supplying the extensive mining operations on the North West coast of WA near Karratha and Port Hedland – see Fig.5. The Northern Territory’s primary grid is called the Darwin Katherine Interconnected System (DKIS) and extends from Darwin through to well south of Katherine – see Fig.6. Interestingly, the Northern Territory has some of the most abundant solar irradiance on Earth. A site near Tennant Creek has been earmarked for development by “Sun Cable”, an ambitious project to build the world’s largest solar farm (20GW), the world’s largest battery (40GWh), and the world’s longest submarine power cable (4500km, HVDC) – see Fig.7. The generated energy would supply Table 1 – VIC energy generation mix Table 2 – NSW energy generation mix Type Avg Price Contribution ($/MWh) Type Contribution Avg Price ($/MWh) Brown coal 65.8% $105.59 Black coal 61.3% $156.33 Wind 21.9% $69.77 Solar (rooftop) 9.1% $75.28 8.9% $25.10 Solar (rooftop) Wind 8.0% $135.70 Hydro 6.3% $186.99 Gas 2.5% $284.00 Solar (utility) 7.2% $85.25 Solar (utility) 3.2% $50.68 Hydro 4.6% $212.59 Gas 2.1% $252.92 Battery 0.3% discharge $189.06 Battery 0.03% discharge $264.03 Imports 4.8% $98.02 Imports 9.1% $108.05 Exports 13.7% $124.02 Exports 1.6% $154.07 Australia's electronics magazine siliconchip.com.au Darwin, Singapore, and later, Indonesia. Interconnectors The NEM states (SA, Vic, Tas, NSW & Qld) share a single electricity network, but commercially they operate as isolated systems, with interconnectors stretching across state boundaries to share power. They are summarised below; you can get more information on them from siliconchip.au/link/ abm7 Basslink (Victoria – Tasmania) Basslink connects George Town on the north coast of Tasmania to Victoria’s brown coal generator Loy Yang A in Gippsland via a 400kV DC cable – see Fig.8. Much of the cable (290km of the total 370km) runs undersea in Bass Strait. Loy Yang can supply up to 478MW (megawatts) to Tasmania or import 594MW for use in Victoria. We have published an article on Basslink in the September 2008 issue (siliconchip.au/Article/1943). A failure of the undersea cable in December 2015 (see Fig.3) left Tasmania isolated from the rest of the NEM. That was one factor leading to the Tasmanian energy crisis of 2016. Hydro Tasmania had largely depleted its storage from low rainfall and above-­ average generation (to maximise revenue before the repealing of the carbon tax). The state was forced to recommission a gas-fired power station and deploy temporary diesel generation to firm up supply until the interconnector was repaired, six months later. Table 3 – QLD energy generation mix Type Contribution Avg Price ($/MWh) Black coal 70.8% $146.40 Solar (rooftop) 11.4% $54.95 Solar (utility) 8.4% $64.87 Gas 8.1% $210.61 Wind 3.5% $133.38 Hydro 2.0% $203.80 Battery 0.07% discharge $256.35 Imports 0.9% $132.62 Exports 5.4% $111.87 siliconchip.com.au Fig.1: the High Voltage Transmission infrastructure in the NEM, one of the longest electricity networks in the world. This map was pieced together from individual state maps supplied by the AEMO and shows Tasmania closer to the mainland than it really is (with the Bass Strait islands removed) for compactness. Australia's electronics magazine August 2023  47 The failure was caused by heat stress due to mismanagement by the interconnector’s operators. 30 Olympic Dam West Olympic Dam North LeighCreek Coalfield LeighCreek South Heywood (Victoria – SA) Woomera TRANSMISSION INFRASTRUCTURE Pimba Mt Gunson 500 kV Transmission Line 330 kV Transmission Line 275 kV Transmission Line Neuroodla 220 kV Transmission Line 132 / 110 kV Transmission Line 40 Wudinna Middleback DC Link Regional Reference Node Davenport 212 77/201 280 Cultana 66 kV Transmission Line 110 110 Baroota 309 Stony Point Whyalla Central Mt Lock 150 150 Whyalla Belalie Port Pirie Bungama 132 Terminal Clements Gap 70 Yadnarie Kadina East Brinkworth Waterloo Waterloo East 66 130 154 Port Lincoln 10 127 250 30 Dalrymple 1 2 3 4 5 6 1080 210 232 529 204 150 Key to Adelaide 8 9 10 11 12 13 3 62 4 1 58 8 7 65 8 91 Kilburn Northfield Parafield Gardens West Magill East Terrace City West 196 201 200 90 200 Templers West Munno Para 20 Roseworthy 78 71 Blyth Clare West North Hummocks Adrossan West 240 53 Canowie 119 Red Hill 60 Snowtown 99 144 126 95 245 57 123 21 111 4 6 Robertstown Murraylink (Victoria – SA) 100 4 North West Bend Monash Berri 50 Templers Dorrien Millbrook Para Angas Creek 12 10 13 9 100 Tungkillo 11 Mannum 29.99 MBH3 Mobilong 1312 10 MBH1 Mt. Barker Mt. Barker South Morphett Vale East Cherry Gardens Happy Valley 15/6 4 87/41.5 Also known as Directlink, the Terranora interconnector links Laverty’s Gap in NSW to Bungalora in Queensland. The cable consists of three buried bipolar DC circuits at ±80kV, able to operate at up to 107MW from New South Wales to Queensland and up to 210MW in the opposite direction. 35 Keith 7 171 Black Range GENERATION SYMBOLS WIND SOLAR OCGT HYDRO PUMPED HYDRO STORAGE DIESEL COAL Kincraig CCGT BIOMASS Queensland to NSW Interconnector BATTERY SUBSTATION Application Pre-Registration Registration Commissioning Operational 63 100 South 46 Mayura East Blanche 25 279 Mt Gambier This map is intended to be a high-level representation only, interested parties should always consult with their relevant network service provider (or equivalent) for more information. Fig.2 (above): a more detailed view of the South Australian part of the NEM state, showing transmission infrastructure and large generators by type. Due to South Australia’s large makeup of renewable energy you can see lots of windfarms and solar generation on the map. Maps of all the other NEM states can be found at siliconchip.au/ link/abm8 (AEMO). Fig.3 (right): the Basslink cable section that failed in 2015. It was pulled out of the sea onto a ship for repair. Basslink was out of service for around six months. 48 Silicon Chip This one connects Berri in SA to Red Cliffs in Victoria via an underground bipolar ±150kV DC link. It can transfer power at 220MW from Victoria to South Australia and 200MW in the opposite direction. Terranora Interconnector (Queensland – NSW) Tailem Bend 95 This connects the Heywood substation in Victoria with SA’s southeast substation (near Mt Gambier) via 275kV AC overhead lines. Power can flow at up to 600MW from Victoria to South Australia and 500MW in the opposite direction. The interconnector infamously tripped due to an overcurrent condition at the start of the 2016 South Australia blackout; this was incorrectly cited as the cause by some. The real culprit was severe weather causing transmission line damage, and the subsequent loss of wind generation, possibly due to conservative ‘fault ride through’ settings. Australia's electronics magazine This joins Dumaresq in NSW with Bulli Creek in Queensland via two overhead 330kV AC lines and two 275kV AC lines between Braemar (NSW) and Tarong (Qld). The power rating is 1078MW from Queensland to New South Wales and 600MW in the opposite direction. Victoria to NSW Interconnector The Vic-NSW interconnector is made up of four separate lines, as well as a 132kV bus tie at Guthega, which is usually not used. There are two 330kV AC lines linking the Victoria and NSW parts of the Snowy Hydroelectric Scheme (Murray – Upper siliconchip.com.au Fig.4: the transmission infrastructure in the SWIS, which serves Perth and the surrounding area. Source: www. westernpower.com.au/media/3258/annual-planning-report-2018-19-overview-20190418.pdf Tumut and Murray – Lower Tumut), as well as a 330kV AC line from Jindera and Wodonga, and a 220kV AC line between Buronga and Red Cliffs. The scheme can operate at up to 1600MW from Victoria to New South Wales and 1350MW the other way, though these power limits are highly constrained when Snowy Hydro is generating. is from generators to the transmission network, then the distribution network, the retailer, and onto the end user – see Fig.9. The Transmission Network is the high voltage ‘backbone’ that carries Pilbara network facilities Please note: this map is indicative only and should not be relied upon for non-Horizon Power network information. Supply chain Broadly speaking, electricity flows through four ‘service providers’ before reaching the end user. The basic flow siliconchip.com.au FMG PLUTO 50MW (Load) 500MW EnergyConnect (proposed: SA – NSW) An interconnector currently under construction will link Robertstown in SA to Wagga Wagga in NSW via a 330kV above-ground transmission line. EnergyConnect aims to ease network congestion in the so-called “rhombus of regret”, a problematic area in North East Victoria that sees generators curtailed by as much as 100 days a year due to capacity constraints. the bulk of the supply capacity into metro areas. These networks typically operate at AC voltages such as 500kV, 330kV, 275kV, 220kV, 132kV and 66kV, connecting large generators to local substations. G KGP 280MW Dampier Pilbara Iron 220MW CP G ATCO G 80MW Cape Lambert TransAlta 158MW 220Kv KARRATHA Roebourne HP 65MW Goldsworthy BHP 2MW (Load) 66Kv Alinta 210MW RTIO Marble Bar 250MW 132Kv Onslow EXMOUTH gas Pannawonica 10MW (Load) Shay Gap HP 65MW Load (East Pilbara) 220Kv 132Kv 450MW PORT HEDLAND 66Kv BHP 70MW G G Millsteam NWIS 220Kv NEW M Nullagine 100MW FMG 100MW Tom Price 30MW (Load) Horizon NWIS Network Pilbara Iron owned BHPB owned FMG owned Alinta owned G Connected generation Isolated generation BHPB Yandi Yandicoogina 220Kv RTIO 150MW G Paraburdoo G 150MW 20MW (Load) 90MW West Angelas 7MW (Load) 132Kv G Alinta Newman BHP 250MW Fig.5: transmission infrastructure in the NWIS in the Pilbara. Source: https://nwis.com.au/media/jqcniluy/nwis-network-map-2020.pdf Australia's electronics magazine August 2023  49 Table 4 – SA energy generation mix Table 5 – TAS energy generation mix Type Contribution Avg Price ($/MWh) Type Contribution Avg Price ($/MWh) Wind 46.6% $79.25 Hydro 73.7% $123.88 Gas 25.4% $244.37 Wind 15.4% $91.96 Solar (rooftop) 18.2% $25.76 Solar 2.5% (rooftop) $75.41 Solar (utility) 5.3% $55.26 Gas 0.7% $150.34 Imports 14.4% $81.74 The Distribution Network consists of the low-voltage poles and wires that connect the substations to most loads in the grid. This includes the low-­ voltage supply to residential and commercial properties (230V single-phase, 400V three-phase) as well as medium voltages (11kV, 22kV, 33kV) for primary distribution and to directly supply larger industrial loads, plus 66kV for sub-distribution. Exports 6.8% $181.89 Generation Battery 0.5% Discharge $270.34 Imports 9.9% $122.64 Exports 6.2% $37.11 Fig.6: Northern Territory gas, water, and electricity infrastructure. Source: www.powerwater.com.au/__data/assets/pdf_file/0017/90602/FINAL_Powerand-Water-Annual-Report-2021_web.pdf 50 Silicon Chip Australia's electronics magazine Generators supply energy to the network. Australia generates the bulk of its power from large coal power stations, with transmission infrastructure built to distribute the power into the population centres. This model is beginning to change as coal power stations are retired and smaller decentralised generators connect to the grid. Victoria’s generation (Table 1) is centred around the brown coal deposits in the Latrobe Valley, with an increasing contribution from wind, and to a lesser extent, solar. Victoria also has some hydroelectric generators, mainly situated in the Kiewa scheme on the slopes of Falls Creek Ski Resort and the southern part of the Snowy Hydro scheme. The latter is located in NSW but allocated to Victoria. New South Wales (Table 2) relies heavily on the black coal deposits in the Hunter Valley near Newcastle, with smaller contributions from solar, wind and hydro. Two of the three existing pumped hydro projects in the NEM are in NSW: the northern part of the Snowy Hydro scheme (Tumut) and Shoalhaven, near Nowra. Queensland (Table 3) predominantly uses black coal from two main areas, west of Brisbane and near Rockhampton. Solar is a small but growing generation type, with smaller contributions from gas, hydro and wind power. South Australia (Table 4) is somewhat unusual in that it is heavily reliant on renewable energy, and almost none of it is hydro. South Australia also has no coal-fired power stations (though it does import power from Victoria). Wind power is the largest contributor, with sizeable generation also coming from solar and ‘firming’ (filling in the gaps in variable generation) using turbines powered by natural gas. siliconchip.com.au Fig.7: the proposed Sun Cable route from Darwin to Singapore. Source: Sun Cable. Tasmania (Table 5) is also mainly a renewable grid, using predominantly hydroelectric power for its needs, with smaller contributions from wind and solar. Western Australia (SWIS; Table 6) is pretty typical by Australian standards, with the largest generation coming from coal and gas, and smaller but equal contributions from solar and wind. The source of data for these tables is https://opennem.org.au/energy/ nem/?range=1y&interval=1w Demand trends The load on the grid is variable but follows predictable cycles. Across the course of a day, the load is lowest around 3am and grows steadily throughout the day, typically peaking around 7pm. In recent years, the increased proliferation of ‘behind the meter’ generation (mainly rooftop solar) has had the effect of reducing grid demand across the middle of the day. The resultant demand graph is known as the “duck curve”, a reference to its shape similar to the aquatic bird – see Fig.10. There are also longer-term trends. The load is typically higher on weekdays, lower on Saturdays and even lower on Sundays. There is also seasonal variation. In spring and autumn, the weather dictates lower loads from HVAC (heating, ventilation, air conditioning) systems, which are the main drivers of the seasonal variation. Winter has a higher demand, driven by heating, particularly during a cold snap where there is a sustained period of cold weather. Summer typically has the highest load due to heavy air conditioning use, particularly during a heat wave. However, this ‘peak demand’ is somewhat offset by increases in solar generation; hot weather generally coincides with good irradiance. The wholesale energy market This section focuses on the operation of the NEM energy market (the largest in Australia), although its operation is similar to markets in other regions. Loy Yang Power Station Table 6 – Western Australia (SWIS) energy generation mix Type Contribution (March 2022 – March 2023) Average Price ($/MWh) Gas 37.3% $85 Black coal 27.2% $80 Wind 16.8% $69 Solar (rooftop) 16.4% $38 Solar (utility) 1.9% $57 Biogas 0.4% $73 siliconchip.com.au Australia's electronics magazine George Town Substation Fig.8 (above): the Basslink route from Gippsland, Vic to Georgetown, Tas. Source: https://w.wiki/6nyX August 2023  51 Fig.9: the electricity supply chain. Original source: AEMO. The Australian Energy Market Operator (AEMO) is responsible for keeping the lights on by matching supply with demand. Every five minutes, AEMO predicts grid demand for the next five-minute interval. They ingest data from various sources, including historical data, market conditions and weather forecasts, and produce a prediction. Simultaneously, generators submit bids to AEMO. These bids offer a quantity of generation at a particular price; for example, 10MW <at> $50/ MWh (megawatt-hour) or 40MW <at> $70/MWh etc (see the later section on generator bidding strategies). AEMO orders these bids from cheapest to most expensive, then works its way up the ‘bid stack’ (Fig.11) until it has met its required generation capacity. This cut-off point sets the price that all generators get paid for their contribution, regardless of their initial bids. Frequency Control Ancillary Services (FCAS) There are also ancillary markets focused on maintaining grid stability. If the grid has balanced supply and demand, its frequency is maintained at 50Hz. If there is excess generation (insufficient load), the frequency will tend to rise, while if there is a lack of generation (excessive load), the frequency will fall. The FCAS markets work to maintain 50Hz across the region. The regulation FCAS markets are used to fine-tune supply and demand. There are two: raise and lower. Raise Fig.10: the average wholesale electricity spot price in South Australia for April 2023. Note the negative price in the middle of the day, where generators pay, and loads are paid, instead of vice versa. This is called a “duck curve” because it looks a bit like a duck! 52 Silicon Chip Australia's electronics magazine works to increase the frequency by increasing generation or shedding load. Lower is the opposite, reducing frequency by increasing load or shedding generation. Generators bid into the FCAS markets in the same way as for energy, offering a quantity of generation at a desired price. AEMO decides how much reserve capacity is required and works its way up the bid stack. Generators below the marginal price are ‘dispatched’ in the form of an operating setpoint. AEMO updates this setpoint every four seconds to match changes in demand or correct any errors in AEMO’s prediction when predicting the next five-­minute interval. The contingency FCAS markets provide standby capacity in the event of a shock to the system, such as a large generator tripping offline or a transmission line collapsing. Market participants monitor their local system frequency and operate if they see an excursion outside the normal operating range (typically 49.8550.15Hz). Participants are paid for being available, regardless of whether they actually respond. There are six contingency FCAS markets: fast raise, fast lower, slow raise, slow lower, delayed raise and delayed lower (see Fig.12). In the same way as regulation FCAS, the raise markets are for increases in generation (or reductions in load), while lower markets are for decreases in generation (or load increases). Fast services must be able to respond within six seconds, slow within 60 seconds and delayed within 5 minutes. siliconchip.com.au Generator bidding strategies The price that generators bid into the market typically reflects their ‘short-run marginal cost’ (SRMC), which is the price of producing an additional unit of power. In theory, this is based on their fuel cost, though their bidding strategies are more complicated than that would suggest. Wind and solar generators benefit from having a $0 fuel cost. Therefore, it is not unusual to see these types of generators bid into the market at or near $0/MWh. Hydroelectric generators are a little more complex. While the rain is free, they have limited storage, so their bid strategy tends to consider the opportunity cost of dispatching at other times. Many hydro generators also have environmental constraints (for example, limits to prevent downstream flooding). Black coal generators’ bids are largely a function of their coal price. Coal generators tend to be slow to ramp up or down, which must also be considered in their bidding strategy. It is not uncommon for a coal generator to bid below their SRMC in the hope that the price will increase in the short term and they won’t have to back off. Brown coal power stations are slower to ramp than black coal, so they tend to primarily consider the avoided cost of turning off when bidding. Gas generators are fast responding, so they don’t have the same constraints as coal. Their SRMC is typically based on the costs of burning natural gas. Because gas is often the marginal generator, they play a central role in setting the wholesale price, despite often only being a small fraction of the overall generation mix. Fig.11: an example bid stack showing how generators get dispatched by merit order to meet demand. At 4:25, Generator 1 gets paid $100 despite only bidding $20. Original source: AEMC. storage; a battery could charge for low cost (or free) during the middle of the day, then discharge into a high-price market during the evening (see Fig.10). The retailer The primary function of the retailer is to meet their end-user electricity demand by purchasing supply from the wholesale markets. They will then on-charge that energy at a fixed rate; say, $300/MWh ($30¢/kWh), or perhaps two or three different rates for peak/shoulder/off-peak. This is much higher than the average wholesale price of $93/MWh (for the fourth quarter of 2022), which might make you feel ripped off as a consumer. But consider that during periods of high demand and low supply, the wholesale price can go as high as the market cap of $15,500/ MWh! So you are paying for not just retail margin but also financial hedging and other costs such as metering, network fees, administration etc. The wholesale market also has a price floor of -$1000/MWh. When the price is negative, the grid is oversupplied, and your retailer receives a credit for any load you provide (and if you have solar, a bill for any generation). Traditional peak/shoulder/off-peak electricity tariffs price energy more expensively during the day, with offpeak periods at night. Arguably, these off-peak periods should be shifted to the middle of the day, to help align customer behaviour to grid supply and ease our transition SC to renewables. Price trends Because the forces of supply and demand drive the wholesale energy market, and supply is naturally limited, the price tends to follow demand. Across the course of a day, it is typical to see moderate prices at night, with a small peak at dawn as demand increases. Solar drives the price down once the sun is up, sometimes even into the negative region. The evening peak usually experiences the highest prices, as solar generation drops, but demand remains high. This cycle shows the value of siliconchip.com.au Fig.12: the contingency FCAS response times. Fast generators must be able to ramp within six seconds, slow within 60 seconds and delayed within five minutes. Australia's electronics magazine August 2023  53