Backups needed in South Australia's period of transition to wind and other renewables

South Australia has experienced the enigma of wind power being a cheap source of power yet electricity prices rising with the number of wind farms.

In merit order, wind (and solar) energy has a lower price per unit and lower marginal production costs than coal or natural gas.

The downside for wind (and solar) is that its peak supply cannot guarantee to match peak demand.

A 2013 South Australian Electricity Report noted that rises in the state’s prices were “largely driven by transmission and distribution network price increases”.
The state’s prices are also affected by trading on the national electricity market and are also at the mercy of electricity retailers with interests in gas-powered (and formerly coal-powered) plants.

In 2016, the South Australian government launched a tender for the supply of 75% of its own long-term electricity. This aimed at driving down prices by bringing new competitors into power supply. But only 25%, down from 100%, of this supply would come from renewables.

The government also committed $24 million to encourage local gas producers to extract more gas to supply the local market. This recognised that gas has to be the backup in this transition to renewables.

The other future backup possibility is the use of battery storage of power from renewables, especially big solar plants that have yet to be realised in South Australia.
The other need is for another connector from South Australia into the national electricity grid and market and for wind and solar to be more smoothly integrated into that market. This could be helped by an emissions intensity (efficiency) scheme that trades credits between energy companies at a national level.