By Sudarshan Varadhan
SINGAPORE (Reuters) -Australia’s renewable energy boom is leaving clean power unused due to transmission bottlenecks and slow battery deployment, industry officials say, signalling challenges across Asia as energy transition accelerates.
Wind and solar curtailments more than tripled in the nine months through September to 3.9 terawatt-hours (TWh), or 6.8% of renewable output, data from platform OpenElectricity showed.
Curtailments refer to the amount of wind or solar power that could have been produced but was pre-emptively rejected because a grid hit its limits.
Some solar farms in southeast Australia face potential curtailment of 35% to 65% by 2027, the Australian Energy Market Operator warned in July.
MIDDAY SOLAR FLOODING THE GRID
“Increasing solar curtailments in Australia may offer a glimpse of what’s to come across Asia,” Kelvin Wong, DBS Bank’s managing director for energy, renewables and infrastructure told Reuters.
Wong said Australia’s “duck curve” – where midday solar floods the grid, causing negative prices – signals challenges emerging in Vietnam, Japan and the Philippines as solar capacity outpaces demand in peak generation periods.
“Standalone utility solar in Australia is basically dead – the banks won’t lend to standalone solar anymore due to curtailment risks,” said David Dixon, renewables analyst at Rystad Energy.
The rolling 12-month quarterly investment in renewable energy projects under construction in Australia fell 28% to $1.1 billion as of end-June due to a slow transmission rollout and planning delays, Melbourne-based industry group Clean Energy Council said in August.
Meanwhile, nine battery projects with cumulative capital expenditure of more than $2.51 billion secured funding in the first half of this year, up 23% annually, data from Clean Energy Council showed.
Efficient renewables use requires scaling storage, improving grid management and developing regional power trade, DBS’ Wong said.
MANAGING CURTAILMENT
Miguel Fonseca, CEO of EDP Renewables Asia Pacific, said that before committing capital, his company conducts extensive site assessments – evaluating local grid dynamics and government transmission plans to identify locations where power can be reliably supplied with minimal curtailment.
Justin Oliver, deputy chair at the Australian Energy Regulator, said solar curtailments have been sometimes necessitated by an emergency as well as the slow pace of transmission expansion.
Australia is trying to tackle curtailment by promoting home batteries, 100,000 of which have been installed, tripling transmission network size, and is examining market design to reduce risks of curbs, he said on the sidelines of the Singapore International Energy Week.
Power stored and discharged by batteries more than doubled to 1.01 TWh during the nine months through September, OpenElectricity data showed.
James Ha, head of research for Asia-Pacific at consultancy Aurora Energy Research, said lenders and investors now increasingly want curtailments forecasted.
“Curtailment is not going away as an issue: it is just another risk to be managed.”
(Reporting by Sudarshan Varadhan; Editing by Emelia Sithole-Matarise)
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