Strategies to Reduce Grid Integration Costs of Solar Electric Plants in the Australian National Electricity Market

Many sites of high solar insolation in Australia are located far from major load centres, and it is likely that the siting of future solar power plants in Australia will necessitate extensive transmission infrastructure. The unique generation profile of solar electric plants limits the utilisation of dedicated transmission lines rated to the peak output of a plant. If a plant is oversized for available transmission, the revenue implications of curtailing peak output may not be significant. With Transmission Network Service Providers (TNSPs) and generators functioning as separate entities in the National Electricity Market (NEM), the pathway for efficient investment in transmission is not straightforward. TNSPs may be reluctant to extend the network at the scale required for long-term development of generation in a region. Moreover, solar plants can be constructed more quickly than transmission infrastructure, giving rise to the possibility of early plants being operational ahead of transmission capacity. This paper explores the impact of transmission constraint on the financial performance of three types of large-scale solar power plant operating in Cobar, New South Wales in 2009: a fixed photovoltaic (PV) plant, a dual-axis tracking PV plant, and a concentrating solar thermal (CST) plant with varying levels of thermal storage. For plants with lower capacity factors (eg. fixed PV), significant constraints on transmission capacity has been found to have a minimal effect on total generation and revenue. The impact of transmission constraint is more profound for higher capacity factor plants of the tracking PV and CST types. The implication of this work is that it can be an effective strategy to oversize solar electric plants relative to available transmission and to construct plants incrementally as a means of mitigating the risks associated with transmission investment in the NEM.