Which fossil fuel is wind taking out?

Contrary to the anti-wind movement's assertions, wind is not causing Victorian brown coal generators to ramp output up and down - unfortunately. But it is taking a bite out of gas and black coal.

Yesterday I outlined how the anti-wind movement has been largely barking up the wrong tree with their argument that wind doesn’t avoid CO2 by substituting for fossil fuel power generators.

Of particular concern is that Hamish Cumming continues to receive media coverage for his claims that wind farms can’t be reducing CO2 emissions because, according to a mate of his who works at one of the Victorian brown coal generators, they can’t adjust their coal consumption. 

In September I explained that was largely a myth and his data didn’t support the argument.

His latest claims revolve around some tidbits of data which he says indicate the emissions intensity of Victorian brown coal generators have deteriorated. According to Cumming’s submission against the Cherry Tree Wind Farm, this deterioration in emissions intensity,

“Would largely appear to be due to the “ramping up and ramping down” that occurs at thermal electricity generation plants in order to accommodate the highly intermittent and unpredictable nature of wind power generation.”

Ignoring the fact that it isn’t actually correct that the emissions intensity of all Victorian brown coal generators has deteriorated as the amount of wind output has increased, let’s consider whether wind power is actually forcing brown coal generators to regularly ramp up and down in our charts of the week.

Below is a chart showing the relationship between the 30 minute change in the output of wind generators and the corresponding change in brown coal generation output. If brown coal generators had to adjust to accommodate wind you’d see a cluster of dots forming a type of slide that flowed downwards from the top left corner downwards into the bottom right corner. This would show that when wind output goes up brown coal output goes down (top left corner) and when wind output went down, brown coal output went up (bottom right corner). 

Data source: Australian Energy Market Operator (AEMO)

Instead what we see is entirely random. When wind output goes up it is equally likely that brown coal generation could go up as down or even just stay the same. Much as I would dearly like to say that wind output is pushing out Victorian brown coal generators, at this stage it’s not true. 

But equally Cumming’s contention that wind is causing these generators to ramp up and down and harming their efficiency and emissions intensity is also completely untrue. Essentially the brown coal generators’ output is largely unaffected by what’s happening with wind power, because it sits so low in the generator cost merit order. 

In the end it is black coal and gas which tend to be flexing their output to accommodate wind, just as was explained in Climate Spectator back in September. Although at this stage with wind still a very small proportion of the overall NEM, there are a range of other bigger factors shaping fuel market share such as differences in regional demand and interconnector constraints. For example, black coal is likely to gain share in the NEM when NSW and Queensland demand is high and the interconnector with Victoria is constrained, irrespective of what’s happening with wind.

The chart below illustrates weekly changes in market share for wind relative to gas across the whole NEM for 2009 to 2012 with each dot representing a week. In addition Excel has mapped a red line corresponding to the rough average relationship between the change in market share for wind and that of gas. The two fuels’ market shares don’t move in lockstep due to a range of other factors at play, but on average gas tends to lose market share when wind gains and vice versa.

NEM-wide weekly change in wind market share and corresponding change in gas market share

Data source: AEMO

In relation to black coal there is also no lock-step relationship with a range of other factors at play, but on average its market share tends to move downwards when wind goes up and vice versa.

NEM-wide weekly change in wind market share and corresponding change in black coal market share

Data source: AEMO

By comparison, there is virtually no relationship between brown coal and wind weekly market share changes.

NEM-wide weekly change in wind market share and corresponding change in brown coal market share

Data source: AEMO

As wind power becomes a larger proportion of the market, and if the carbon price doesn’t disappear or go into freefall in 2015, then these relationships are likely to change. The higher cost Victorian brown coal generators might begin to be displaced, for example during low demand periods in the middle of the night. Also by depressing wholesale pool prices wind will make it harder and less financially viable to keep some of the older generators online, such as what happened with Playford B and Northern in South Australia.

But with wind representing just 2 per cent of annual average NEM supply at present, it just isn’t yet big enough to be pushing the Victorian brown coal generators around.

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