Minimal wind generation in Victoria highlights the importance of good interconnection

According to the latest research from Cornwall Insight Australia, the minimal wind generation observed at the beginning of July in Victoria highlights the importance of good interconnection between states as variable renewable energy (VRE) grows.

Figure 1 shows the half-hourly generation by technology within Victoria over the second week of July 2021 (6 July to 13 July) against Victoria’s 30-minute spot price.

Generation by technology and electricity price

Findings during the period of low wind

  • Victorian wind farms averaging a capacity factor of 7% over 6 July to 10 July.
  • From 6 July – 9 July, prices reflected this wind shortage in averaging $240.
  • The cap price hit numerous times, with only one brown coal unit (LYA4) being unavailable over this period.

Sandy Starkey, Energy Market Modeller at Cornwall Insight Australia, said:

“Victoria has been identified as most vulnerable to wind droughts due to its low insolation levels, high degree of correlation of wind and relatively high demand. In addition, with the current high utilisation of gas for heating, any push towards electrification of appliances would further increase demand for electricity during the winter months.

“As the wind returned to the state, prices then averaged $65/MWh from 11 to 13 July. This indicates how wind is increasingly essential in influencing the price setting in Victoria. When the wind and VRE are high, market prices tend to be comparatively low; however, during periods of low VRE, we see market prices increase rapidly.

“This brief snapshot highlights how essential it is not to have all the eggs in the wind basket, particularly when brown coal is retired. Good interconnection, adequate solar resources, dispatchable technology and deep or seasonal storage, is essential for Victorian’s transition to a net zero emissions state.”