Why is minimum demand an issue?

A minimum demand fact sheet (PDF, 218.0 KB) has been developed to help explain minimum demand and why it is a challenge in South Australia.

This started in 2010, why are we only doing something now?

The growth in installations of small distributed electricity generators, such as rooftop solar systems, has helped consumers manage their energy costs and reduce carbon emissions across Australia.

At relatively low levels of uptake, the electricity system is able to accommodate rooftop solar without impacting on the security and reliability of the system. Declining minimum demands were not expected to be an issue in the short term based upon the forecast uptake of rooftop solar. However, over the last couple of years, rooftop solar uptake has been much stronger than forecast and the issue of declining minimum demand has arrived much quicker than expected.

With growth continuing at the current rate, the Australian Energy Market Operator (AEMO) advises that under certain conditions demand could reach zero in South Australia within the next 1-3 years, but under the most favourable conditions, operational demand in South Australia could reach zero as soon as late 2020.

Are other states and territories having the same problem?

AEMO’s 2020 Electricity Statement of Opportunities (ESOO) highlights that similar action to that occurring in South Australia with regard to rooftop solar uptake is also required urgently in Victoria, and promptly in Queensland. In addition, the Western Australian Distributed Energy Resources Roadmap highlights that the decline in minimum demand may breach technical limits (around 700 megawatts) as early as 2022.

What happens overseas?

To AEMO’s knowledge, South Australia is the first gigawatt scale power system in the world to approach zero operational demand due to such high proportions of demand being met by distributed energy resources (DER) such as rooftop solar.

AEMO’s October 2019 report Maintaining Power System Security with High Penetrations of Wind and Solar Generation - International insights for Australia highlights that active management of DER is largely limited to emergency actions, such as periods of severe over-generation.

Some areas around the world have implemented more coarse methods, such as disconnect switches in dedicated small-scale photo-voltaic (PV) revenue meters as seen in Hawaii, and ripple control in Germany. Japan has trialled multiple demonstrations using DER management systems sending commands to devices and home energy management systems over the internet.

The report highlights that more continuous active management of DER as part of power system balancing is an emerging area internationally. Hawaii and California recently mandated interoperable communication requirements for DER inverters, as well as defined roles and responsibilities for the aggregation of these devices.

What happens if it goes negative?

Having too much energy has the same result as not having enough energy – it creates system instability and can lead to widespread disruption of power supply.

As part of power system balancing, AEMO currently maintains secure operation of the electricity system by requiring a minimum number of grid scale generating units to be on at all times, as well as procuring essential frequency control services.

To achieve this in an islanded situation or during periods of elevated risk of islanding, there must be sufficient demand from the grid to ensure that the minimum amount of generation required for secure operations is in balance and that the system can withstand an unexpected fault in the network.

If distributed rooftop solar cannot be actively managed in real time, it may not be possible to maintain a sufficient number of grid scale generating units online to provide all the essential system services. This would mean that South Australia is operating in an insecure state, and a single credible contingency could lead to a cascading failure, known as a “black system”. The ability to restart the system may also be compromised at these times if distributed rooftop solar is operating in an uncontrolled manner.

What is the risk if we do nothing?

AEMO’s advice to the South Australian government in its technical report of May 2020, Minimum Operational Demand Thresholds in South Australia, highlighted that South Australia was close to the point where a complete moratorium on new distributed rooftop solar would be prudent, if measures of the kind recommended in the report were not implemented.

Following the advice from AEMO to enable improved power system balancing, a number of new technical standards and requirements for smaller generating systems, such as rooftop solar, have been introduced in South Australia and are in effect as of 28 September 2020.