Coal Generators Fined After Failing to Match Big Batteries and Putting Grid at Risk

The Queensland state government owned generation company CS Energy has been heavily fined after units at two of its ageing coal generators failed to deliver crucial grid services at various events the last two and a half years, and very nearly caused widespread blackouts in the sunshine state in one of them.

The Australian Energy Regulator says CS Energy has paid $200,000 in penalties for allegedly failing to ensure it could provide frequency control ancillary services (FCAS) that it had offered to the market. It has also repaid $1.3 million it received as payment to provide the services it failed to deliver.

FCAS helps manage the stability of the power system – responding to sudden variations in supply and demand – and play a crucial role in keeping the lights on for customers.

The FCAS market was once dominated by coal and gas generators, but big battery installations – as well as small batteries aggregated in what are called virtual power plants – have grabbed a major share of the market since they first appeared on the grid in late 2017.

Queensland, however, does not have any big battery installations – although one is being built at Wandoan (100MW/150MWh) and many more are planned. That means that the state is still dependent mostly on coal generators to provide FCAS, but there was been increasing concern about their ability to do so.

The AER alleges that CS Energy failed to ensure it was at all times able to comply with its contingency FCAS offers (which deals with major disruptions) at certain units at the Callide B power station on August 25, 2018, and from Gladstone power station in November 2019 and January 2020.

The August 25 incident was particularly significant, as it was the day dual lightning strikes took out the main link between NSW and Queensland, causing a ripple-effect that caused both the Queensland and South Australia grid to become separated from the main grid, and major outages in NSW, Victoria and Tasmania.

South Australia rode through the incident well, thanks in part to the big batteries operating in its grid. But Queensland struggled, with the Australian Energy Market Operator noting that the FCAS response was poor, and the state only narrowly avoided a major outage.

As we noted at the time, August 25 was Scott Morrison’s first day as PM, having just deposed Malcolm Turnbull, and he got to learn the difference between a Big Battery and a Big Banana, the term he had used to ridicule the Hornsdale Power Reserve.

Source: CS Energy
Date: Feb 22, 2021