Energy and the Earth

Energy and the Earth

Who’s afraid of solar PV?

The recent take-up of domestic solar photo-voltaic (PV) panels in Australia has been quite phenomenal. Across 2010 and 2011, the installed capacity increased seven fold to about 1.4 gigawatts, doubling every 9 months.

By the end of this year we will probably have in excess of 2 gigawatts of solar PV capacity installed. All fired up at the same time it is enough to produce about 8% of the average daytime electricity demand.

Take up of solar PV in Australia in gigawatts, circles show total installed capacity while rectangles show the new capacity installed in a given year. Data from DataMarket (http://data.is/naKtrl), image by Mike Sandiford.

Of course, a characteristic of solar PV is that it doesn’t fire up for much of the time at all. With a capacity factor of about 18%, 2 gigawatts capacity would be expected to output an average of no more than 360 megawatts or about 1.5% of our average demand. At those levels you might ask if solar PV is having any impact on our demand for mains electricity.

Judging by the numbers, the answer is a definitive “yes”. In fact, so much so that it wouldn’t surprise if it is beginning to worry some utility managers.

Since solar PV production rises and falls in a characteristic pattern through the daylight hours, any substantive impact should be evident in a distinct reduction in demand for mains electricity in the middle of the day. With PV penetration having risen so dramatically since 2009, that pattern should be apparent in comparisons of demand over the last 12 months with equivalent periods prior to 2009.

In fact when we do this, the PV signature is blindingly obvious, especially in the states of South Australia and Queensland where PV penetration is highest. It is also showing itself in the revenues generated by electricity sold on the wholesale market.

In South Australia, midday to early afternoon demand was down over the financial year 2011-12 by about 8% on the average for the period spanning mid- 2007 through mid-2009. That contrasted with a negligible change in demand outside daylight hours.

Average demand for mains electricity in South Australia as a function of hour of day. Red line is the average for the two financial years from July 2007 to June 2009. Blue line is for financial year 2011-12. Left panel shows absolute demand, right pane shows demand changes referenced to 2007-09 averages as a percentage. “ zoomable="true” /> In Queensland the story is very similar, although the proportional impact is lower with midday 2011-12 demand down only about 4% on 2007-09 levels. <image id= Data from AEMO, figure by Mike Sandiford

And it is the afternoon and early evening when the wholesale market makes its money, because that is when demand is highest. So any decline in demand in the afternoon will take much of the cream out of the market.

In the period prior to significant PV penetration, hourly revenues on the South Australian wholesale market typically peaked at 3-4 pm in the afternoon at 5 times above base revenues. By 2011-12 those peaks were gone. Even though PV generation is tailing off significantly by 4 pm, the demand reduction was still enough to reduce peak hourly revenues by almost 90% between 2007-09 and 2011-12, contributing to a 30% decline in the annual wholesale revenue.

Average wholesale market revenue for mains electricity in South Australia as a function of hour of day. Red line is the average for the two financial years from July 2007 to June 2009. Blue line is for financial year 2011-12. Left panel shows absolute revenues in millions of dollars per hour. Right panel shows demand changes referenced against 2007-09 averages as a percentage. “ zoomable="true” /> In Queensland, 2011-12 midday revenues were down 50% on 2007-09 averages, contributing to an annual revenue fall of about 18%. <image id= Data from AEMO, figure by Mike Sandiford.