The Annual Planning Review released by the Electricity Supply Industry Planning Council (ESIPC) in June 2004 has highlighted a range of system issues associated with a significant expansion of wind farm capacity in South Australia. These include impacts on the operation of scheduled generators, the need to match wind farm development with adequate connection infrastructure, uncertainties concerning the inclusion of wind farms in the supply-demand balance for South Australia, and meeting technical standards imposed by the National Electricity Code. It is important to establish a capacity limit below which wind farms in South Australia can be supported by the transmission network. The Commission understands that the Planning Council is preparing a discussion paper on this topic.
The Commission believes that it is important that it give specific consideration to these issues in determining the outcome of future generation licence applications relating to wind farm developments in South Australia. Therefore, the Commission will refer any such application to the Planning Council for comment, particularly in relation to those issues.
Furthermore, the Commission notes that in a number of cases, wind farm developers are commencing construction prior to the issuing of a generation licence by the Commission for the operation of the wind farm. The Commission advises that any wind farm proponent that commences construction ahead of licence approval by the Commission does so entirely at the proponent's risk. The criteria that the Commission must take into account in considering a generation licence application are detailed in the Commission's Advisory Bulletin No 4 - Licensing Arrangements for the Electricity and Gas Supply Industries.
The Commission has over the past two years issued generation licences, pursuant to Part 3 of the Electricity Act 1996 (SA), to a number of intending operators of wind farms at various sites around South Australia.
As at 22 November 2004, the total capacity of the six wind farms in South Australia for which licences have been issued was about 400 MW. Only one of these wind farms (Starfish Hill) is currently operational, but all are expected to be operational by the end of 2005. It is likely that a further generation licence will be issued to an intending wind farm operator (Pacific Hydro Clements Gap) by the end of 2004, the Commission having completed its consideration of the application for that licence. In addition, the Commission understands that further such licence applications will be made during 2005.
On 6 April 2005, the Electricity Supply Industry Planning Council of South Australia released a Wind Report which highlights a range of issues and provides certain recommendations associated with a significant expansion of wind farm capacity in South Australia. This report has been produced following the Commission's request for advice of 23 December 2004.
The Commission seeks comments on that report by Monday, 2 May 2005.
The Commission also advises that the Ministerial Council on Energy (MCE) Standing Committee of Officials has available for comment a Discussion Paper titled "Integrating Wind Farms into the National Electricity Market (NEM): Discussion Paper" (March 2005). Submissions on that paper to the MCE Wind Energy Policy Working Group, are due by Friday, 6 May 2005. A copy of the report and further details can be found on the MCE website at http://www.mce.gov.au
The Commission currently has before it 11 electricity generation licence applications, made pursuant to Part 3 of the Electricity Act 1996, relating to wind farm developments in South Australia. The total installed capacity of the wind farm proposals that are the subject of these applications is about 1,200 MW. It is noted that the Commission has already licensed wind farms with a total capacity of about 450 MW, of which about 320 MW is now operational.
Consistent with an announcement made in late 2004, such applications have been referred to the Electricity Supply Industry Planning Council (ESIPC) for general advice on the network, system and market impacts of such a large additional increment of wind generation capacity in the South Australian power system.
The ESIPC wind report was delivered to the Commission on 6 April. It identified a number of significant network, power system and market risks should the level of wind generation increase beyond the level currently licensed. The ESIPC report made a number of recommendations relating to market-based measures that, if implemented, would ameliorate the risks that it identified.
The Commission has reviewed the ESIPC report and consulted with stakeholders on its findings. In order to address the risks identified by ESIPC, the Commission has developed a draft set of principles to be used in the granting of additional generation licences for wind farms in South Australia. These principles seek to ensure that the recommendations of the ESIPC report will be met by future wind farm developments.
The Australian Wind Energy Association (AusWEA) has requested an extension in the time allowed by the Commission for the provision of written submissions to the paper Draft Statement of Principles - Wind Farm Licensing.
The closing date for submissions is now close of business 8th August 2005
The Essential Services Commission has released its Statement of Principles for the licensing of wind generators in South Australia. The Statement of Principles sets out additional minimum obligations which the Commission will require of wind generators in order that South Australia can reap the benefits of increased wind generation capacity while at the same time ensuring that electricity reliability issues are appropriately addressed.
The Commission has received further advice on these issues from the Electricity Supply Industry Planning Council. In finalising its Statement of Principles, the Commission has taken account of that advice, and has also sought to protect the long term interests of South Australian consumers by striking an appropriate balance between the requirements of industry proponents and South Australian consumers' needs.
The measures established under the Statement of Principles are designed to operate until such time as a whole of national market solution to the challenges posed by wind generators is reached. At that time, the Commission will take steps to review and, where necessary, amend or remove its licensing requirements.