As the electricity market evolves the Australian Energy Market Operator (AEMO) makes assessments of the changing landscape from a transmission and security of supply perspective.
Recently AEMO released its final assessment of Marginal Loss Factors (MLFs). MLF determine how much energy is lost between the generator and the region reference node in each state.
In this next round of MLFs many of the big losers are the intermittent generators. Changes to the grid and the closure of thermal generators have had a detrimental impact on wind and solar farms. Lower MLF’s impact the amount of revenue generators can make.
The final MLF numbers are not as bad as what was published in AEMO draft report providing some positive news for wind and solar developers. Since the draft report new modelling has included the delayed return to service of the Callide C units.
The primary driver for changes in the new MLF forecasts has been changes in availability due to the closure of Liddell, revised return to service dates for Callide C, revised demand forecasts and the increased penetration of solar and wind generation into the grid.
Recent transmission line work has resulted in an increased capacity between Queensland and NSW which means increased flows from Queensland which results in wind and solar projects located in the north of NSW being constrained.
MLF generally gets worse for generators at the end of a long transmission lines, this has resulted in generation in northern NSW being the big loser this year. Some solar farms in the New England region have dropped by over 3%.
While a 3% fall sounds bad, it is not as bad as the MLF for Moree, a 57MW solar farm in western NSW which loses over 20% of its generation by the time it gets to the regional reference node. Previously Moree solar farm had an MLF of 0.8275, this year it is 0.7977.
The return to service of Callide C significantly impacted solar farms in central Queensland, however the delayed return to service has lessened the impact. Daydream, Collinsville, Kidston, and Moura are some of the solar farms most impacted by the new MLFs.
So what does the mean to end users? While we are seeing a rapid increase in renewable generation, the location of this generation is important to the success of a project. If we use the example of Moree where over 20% of the renewable generation does not reach the market then the question has to be, was it built in the correct part of the grid. Many people focus on the size of the project while the volume of electricity produced needs to be of greater importance. Unfavourable MLF will impact the success of the project, will reduce the renewable energy available to the market and potential can leave end users with less renewable energy than what they had signed up for.
