Debunking myths about wind and peaking capacity


In recent weeks, there has been plenty of discussion about the need to invest in new peaking power stations to balance out wind generation. Much of this discussion ignores the facts about how the National Electricity Market works. Here are the facts you need to know:

- Wind is a variable energy source. A wind farm over the course of a year is likely to have a capacity factor of around 35-45%. In other words, on average 35-45% of the rated capacity produces output at any point.

- The system operator, the Australian Energy Market Operator (AEMO), in forecasting the availability of plant in the market only allows wind capacity to contribute around 10% towards peak demand due to this variability.

- Accordingly, rather than building new peaking power stations, the contribution of wind is to displace combined cycle gas and coal at times of baseload demand.

- AGL and other modelling results confirm this. AGL’s most recent modelling shows that the addition of 10,000 MW of new renewable capacity reduces the amount of new gas-fired capacity required by 1,700 MW due to these impacts.

3 Responses

  1. keenonenergy

    good insight!
    Role of wind (and other renewables) prior to ETS should be understood. Media reports $47billion investment over next 5 years for distribution improvements to cope better with current and future peak ( increasing load factor). Use of wind and other sources to address some of this need is a great intersection of current and future strategy.

  2. Gregory Wong

    Some questions regarding your modelling.
    10,000MW of wind is providing the capacity equivalent of 1,700MW of gas turbines, but is producing ~3,500MW energy equivalent. How should one interpret the gap? Does it lead to the gap of ~1,800MW being built as peaking plant rather than baseload plant, in a conceptual framework where the 10,000MW of wind is built progressively to meet load growth? Or does it mean that the energy output of the equivalent of ~1,800MW existing (fossil fuel) baseload plant is substituted by the wind energy?
    Also does the ratio of 1,700MW to 10,000MW remain constant if it were 5,000MW of wind capacity or 20,000MW of wind capacity?


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