VIC & SA just broke a new demand record for electricity, but you wouldn’t know that without solar data.

Originally published at

Kerry Burke is an associate analyst at Westpac Instittutional Bank.

Victoria and South Australia have just finished a week which put the highest stress on the electricity grid since a similar heatwave occurred on 28th-30th January 2009. Despite the population of Victoria and South Australia increasing at least 7%2since then, the electricity demand supplied by the grid during the heat wave was just lower than the peak usage reached on the 29th of Jan 2009.

Electricity demand from the grid in the recent heatwave peaked on Wednesday. There were initially warnings of potential load shedding1 from the grid operator after the usually baseload Loy Yang A3 brown coal unit and one of the Torrens Island gas units tripped offline on Tuesday. However, demand came in slightly lower than forecast and apart from some minor local transmission outages, demand was fully supplied.

Speculation has already started on the effect of solar on electricity demand during the heat wave, with the Electricity Supply Association (ESAA)3 and the Australian Solar Council4 each producing different estimates of the amount solar contributed to reducing demand. Peak demand is an important driver of the cost of electricity as both the network and the generation fleet is sized to meet the largest credible demand forecast.

Producing estimates of solar energy production is difficult as the energy production occurs behind the meter that connects households and businesses to the grid. Some hope of making a good estimate exists due to the existence of, a volunteer run site that lets solar system owners connect their inverters to the internet and automatically upload data on solar energy production. The site receives data every 10 minutes from hundreds of systems in each state. The data has been handily graphed on a real time basis at .

The solar owners using the site would be more enthusiastic about solar than the average owner and the data collected may overestimate energy production if the enthusiasts have higher efficiency systems. On the other hand, enthusiasts may be more likely to install solar even in poor locations, such as south facing or partially shaded roofs. Overall, is the only estimate we currently have of real-time solar energy production.

The figures below show the 10- minute estimates of solar energy added back to the 5-minute metered electricity demand from Thursday to give the true native demand.  Not only did solar reduce the peak demand, it actually shifted the apparent time of maximum demand to much later in the day for South Australia.

Vic Highest Demand SA Highest Demand

The time shift in peak demand caused by solar makes the approach used by ESAA to measuring solar contribution lead to underestimations. It is not enough to look at when demand peaked and estimate solar production, as that fails to take into account that demand would have peaked earlier without solar.

If no solar had been installed, Victoria would have set a new demand record of 10675MW at 1:55pm today 17th-Jan-2014, higher than the metered demand of 10572MW used at 12:35pm on the 29th-Jan-2009. South Australia would have set a new demand record of 3549MW at 4:30pm yesterday 16th-Jan-2014, higher than the metered demand of 3441MW set 4:25pm on the 29th-Jan-2009. Solar reduced the maximum combined VIC & SA demand by 448MW.

Asking what happens when the sun doesn’t shine and the wind doesn’t blow ignores the spare capacity built into the grid to handle record demand days like yesterday and today. For the majority of the year, spare generation capacity can backup variations in solar or sudden failures at fossil fuel plants. Record demands, where there is little spare capacity, are caused by hot conditions and strong sunlight. Solar is now a critical component of the generation fleet that reliably supplies our power.

Kerry Burke is an employee of Westpac and a conjoint fellow at the University of Newcastle.

Any views expressed do not necessarily reflect those of the Westpac Group.

  2. ABS population data Jun-2013 (latest release) vs Dec-2008.

With VIC & SA in a heatwave this week I remembered to re-post my Conversation article about solar and peak electricity demand, five months later. I’m not very good at blogging.

I’ve added a bonus graph to the post.

When the sun don’t shine, the power don’t flow … or does it?

By Kerry Burke, University of Newcastle

Renewable energy seems to be on a roll. One million Australian homes have rooftop solar cells. There’s so much renewable energy it’s reducing wholesale electricity prices. But then, that old chestnut pops up: reliability. How do we make energy when there’s no sun?

When the heat is on, the sun is shining

The electricity market is effectively two separate markets. There’s the market for energy: the coal, gas, operations and maintenance component of running the network.

Then there’s the market for capacity. To serve our electricity needs, we build enough power stations to supply our highest imagined electricity needs, then let some or most of them sit idle for all the parts of the year when we’re not using quite as much electricity.

We tend to think about the cost of power as being related to things such as coal and gas prices, or operation expenses; but a large part of the cost of electricity is simply the cost of money involved in having standby generators ready for that one moment when we all want to use electricity at the same time.

This creates a problem for the owner of a solar or wind farm. Because they can’t guarantee capacity due to the vagaries of weather, in effect, they can only sell energy

But distributed solar is different. The time when we all decide to use a lot of electricity at the same time is when we all turn our air conditioners on mid-afternoon on a scorching hot summer day. At that time, the sun is clearly shining. For distributed solar to be interrupted, it would have to be overcast over an entire capital city, in which case the temperature wouldn’t be that high and we wouldn’t actually need spare capacity.

Alongside the growth of solar installation, there has been a growing enthusiasm for sharing data on solar output. One such site is This large sample of real-time solar system behaviour under real world conditions is combined with data from the renewable energy regulator on installation rates. It allows real-time solar generation in the National Electricity Market to be calculated.

Using this data we can have a look at how renewable energy actually handles peak demand.

During the demand peak on top five highest demand days in each state, solar reduced demand by at least 21% of its installed capacity in each state. Surprisingly, Victoria and South Australia are actually better at supplying peak demand with solar. The low latitude creates long days and daylight saving time shifts consumption earlier into the day when the sun is higher in the sky. Less surprising is that north-west and west facing solar are better at meeting peak demand.

Solar Demand Reduction

Moving from gas to solar

It’s even possible to put some rough numbers on this ability to meet peak demand. A lot of the recent work on the value of distributed solar has been conducted by regulatory bodies as they try to determine a fair price for solar feed-ins.

The regulators and their consultants all fall into the error of assessing distributed solar as only an energy source, without regard for solar’s value as capacity.

The easiest way to think about peak capacity is to value it the same as a gas turbine. In fact distributed solar has several advantages over gas turbines. Solar can be installed incrementally, as needed. New transmission lines are not needed. More importantly, a large portfolio of small solar systems will always work. Like a car engine, gas turbines sometimes fail to start.

Nevertheless, gas turbines are the electricity market’s standard response to peak demand because they are the cheapest type of conventional generator to build. Comparing distributed solar to the cheapest generator should understate its value as a provider of peak capacity.

It is of course necessary to correct for a few things; solar doesn’t produce at its full rated capacity in the afternoon with the sun striking at an angle and gas turbines suffer transmission line losses and output reductions in hot weather.

After crunching all the numbers, the ability of distributed solar to supply peaks has capacity value equivalent to 10-20% of the unsubsidised installation cost. That’s on top of the energy value as calculated by all the regulators. It’s worth more in the south, because of the longer days. It’s worth another 3-6% of the system cost if the system faces north-west or west.

Importantly, the value is a capital value, not cents per kWh. Capacity isn’t about how much power is produced. It’s about how much is there when you need it most.

A working paper with more detail is available here

Kerry Burke is affiliated with Westpac and the University of Newcastle.

The Conversation

This article was originally published at The Conversation.
Read the original article.

The reliability of distributed solar in critical peak demand: A capital value assessment

A Working paper. Submitted to Renewable Energy.

Constructive comments and questions are welcome.


Generation is most valuable when demand is highest. As electricity can’t yet be cheaply stored, generation and transmission infrastructure must be built to meet the highest expected demand, plus a margin of error. Reliably producing power at times of critical demand not only offsets the need to use expensive liquid fuels such as diesel or condensate, but also removes the need to build backup power stations and transmission infrastructure that would only be used for a small fraction of the year. Under the most extreme demand conditions, solar has reduced the peak demand seen by retailers and wholesale energy markets. This study compares the capital cost of critical peak availability from gas turbines to the capital cost of critical peak availability from distributed solar in the Australian National Electricity Market. When compared on this basis, 10-22% of the cost of installing the solar system can be attributed to the capital value of critical peak generation. North-west and west facing PV is worth a further 3-6% of system installation costs when compared to generally north facing PV. Finally, southern states, with longer summer days and more sunshine in the afternoon are found to benefit more from peak supply of solar PV.