Last Wednesday, during the near-miss of a blackout in Sydney, the AEMO spent $3,558,000 on "demand reduction" which means they paid productive industries to stop working to save the grid from a blackout. Translated: poor electricity users in New South Wales paid $3.5 million to businesses to do nothing, because the grid didn't have enough energy, and the people in charge really didn't want any embarrassing blackouts so close to an election.
So renewables are wonderful, clean and cheap but your workers, assets and capital will sometimes need to sit around and do nothing so we can stop some storms in the 22nd century.
In political spin, planned blackouts can also be called "Virtual Power Plants"
"Demand Management" is a smarmy marketing word for a lot of little Blackouts. In the lexicon of a failing grid, all the bad-words get tortured into iced doughnuts — if your company has agreed to be ready to shut down at a moment's notice on a warm day, that's not being on "Standby to Close", instead your business is a ""pre-activated" extra reserve."
In Renewable-World-Psychosis bad is good: your smelter used to make aluminum, but now you can sell "electricity use reduction" as well, and the AEMO (the grid manager in Australia) will call you a "Virtual Power Plant" too. Australian companies can now sell their own blackouts back to the grid. Neat eh?
Indeed, you and I are probably thinking about this all wrong — like electricity is a net good, and a dead smelter is a waste of space.
John Rolfe, Daily TelegraphFor what it's worth, which is not much, the large aluminium smelter Tomago, was not forced to shut down, but it was "pre-activated" and ready to close. Apparently, even though the cool weather change came through, they shut down that afternoon anyway, or perhaps they just gave up. Who could blame them?
... AEMO CEO Daniel Westerman told an energy planning and regulation Senate committee hearing that the market operator spent $3,557,700 on reducing demand to increase emergency reserves in NSW on Wednesday November 27 as a supply shortage took shape.
Mr Westerman indicated AEMO did not end up having to reduce Wednesday's demand by as much as first expected. But, in anticipation of a greater shortfall than eventuated, AEMO had "pre-activated" extra reserves.
Mr Westerman said the purchased electricity use reduction came from "virtual power plants", which were an "aggregation of ... smaller demand."
Australians are not just paying companies to do nothing, they pay them to be ready to do nothing too. There's a part payment for the pre-activated companies, even if they don't have to switch off. It reflects the hassle of running an industrial outfit with your hand on the power lever, and your brain in the state of uncertainty. And that's the thing isn't it — no company is going to be more productive "on standby" than it is running full tilt. It's a stupid way to run a nation.
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