It takes careful planning, deep resources, refined diplomatic skills and straight-ahead honesty to negotiate the arcane and frustratingly opaque grid-connection process, the audience heard.
The panel, left to right:
- Ian Christmas (moderator, not pictured), head of engineering, Edify Energy
- Greg Elkins, principal engineer, AEMO
- Kate Osaze, grid connections manager, Esco Pacific
- Rachel Hogan, senior engineer, AECOM
- Simon Taylor, manager network customers, Powerlink
The grid connection process is “60% technical and 40% relationships”, said moderator Ian Christmas, and it generates as much passion and emotion as electricity. “This leads to some very interesting meetings,” he said. “The question really is: how did it get so hard? Or: has it really got any harder?”
Grid connection anxiety is felt by all participants: networks, the market operator, developers, equipment-makers and investors. It feels as though hopes for project success can be modelled ad infinitum only to be dashed backwards by the shifting whims of the grid-connection gods. When will it end? “It’s like playing snakes and ladders every day … and someone keeps taking away all the ladders,” Christmas said, turning to the panel for some perspective.
Big is better
Powerlink’s Simon Taylor reflected on the leap in recent years of the scale of projects looking to connect, where the current mantra appears to be “big is better”. Once, 40MW was big, but today he posited that developers in the audience probably wouldn’t bother with anything below the hundreds of megawatts. Today’s projects are larger and also more complex, he said, requiring connection to high-voltage transmission. The problem is that “all the good spots that were there two or three years ago are gone”.
Location choice has become a painful issue for generators struck down by downgrades to marginal loss factors (MLFs), but Taylor had a pragmatic view. “Every time you move energy there is a loss, and that has to be paid for by someone,” he said. At the moment, the bill is passed to consumers. MLFs are a “locational signal”, along with irradiance levels and proximity to transmission. “If any of those signals are not working correctly in the market – and I don’t see any evidence that they are not – they should be changed,” he said, reminding the audience the Australian Energy Market Commission is open to suggestions on the topic.
It seems a great deal of effort and investment is sometimes expended by industry before it even presents its case to the market operator, said AEMO’s Greg Elkins, citing an example of a developer who admitted to spending multiple millions before speaking to a network service provider. Greater levels of collaboration are needed, he said. “How do we work together better, earlier on,” he said, granted that negotiations are be bounded by the limitations of physics. “For us to work together and collaborate towards a better outcome, and try to understand where each other is coming from, is going to be the key to the success of this challenging process.”
Kate Osaze at Esco Pacific conceded that progress can hinge on the parties’ different personality types, with the result that there can be “inconsistencies between the TNSPs in the room”. She gives the example where stringent steady state requirements of distribution network service providers can bring about delays which may have been avoided. “Sitting down and trying to figure out what are the concerns and what are the options available to meet requirements as quickly as possible [is important].”
Time is tight
AECOM’s Rachel Hogan said the problem has been compounded by the sheer volume of activity this year. “Early communication is import, but … finding the time to have these meetings is sometimes quite challenging, for NSPs, for developers, for AEMO,” she said. “Different personalities are going to bring different ways to do things and potentially progress new ideas.”
It would help if proponents were prepared for every meeting they initiated, but that’s sorely not always the case, one panellist grumbled. Time is precious. Don’t waste it. Be prepared. “When you travel two hours by plane to a meeting and get [an unsatisfactory response from ill-prepared proponents] it disheartens the whole experience,” he said.
It’s easy to forget everyone wants the same outcome: optimal delivery of new opportunities for generation. “It might not come across when you talk to some NSPs, but we actually like connecting parties to the grid,” said Taylor from Powerlink. “We get a lot of buzz out the day the generator breaker closes in and it starts producing. We like to share in those successes, but no-one has infinite resources so we all work with priorities.”
That’s the difference
The risk profile of developers varies and the risk profile of NSPs varies, Taylor said. Some are government-owned, with a mandate; some are private, with a growth objective. “The connection process is identical, state to state; what you see is the personalities coming through. That’s the difference.”
System strength issues that started to emerge about 18 months ago “probably” should have been identified and planned for earlier by networks, Taylor conceded.
Confidentiality around project applications is a wiry topic, where multiple developers can be researching the possibilities of connecting to the same part of a network but none of them is allowed to be told of the others’ inquiries. This can lead to parties having wildly optimistic forecasts of their chances of success.
“The economically rational outcome would be to suggest they talk to each other,” one panellist said. “But I can’t do that because I am bound by the national electricity rules.” Changes to the rules that allow some view of what’s inside the project pipeline would be welcome.
The AEMC consultation process is open on this matter.
A huge task to absorb
Osaze at Esco Pacific could “not emphasise enough” the need for project developers to have deep reserves of resources to tackle the full impact assessment process. She recounted Esco Pacific’s application for its 175MW Finley Solar Farm, where “there was no indication that system strength was an issue” until a few days before expected connection when the developer was told by the NSPs that the project required a synchronous condenser.
“You’ve gone through negotiations with your OEM, with your EPC contractors, you have a PPA in place – these are contractual obligations in parallel – and to be notified so abruptly towards the tail end of the connection process that you need to spend millions more on a project, that is a huge task for any business to absorb.”
Esco made it happen, but not all developers will be so lucky, she said. “The industry is learning.”
“The grid has to operate stably at all times,” said Taylor from Powerlink. “When a new generator comes along and proposes to connect at a location it needs to demonstrate that it does not cause harm to other network users. How that’s interpreted is now very specific.”