The revealing costs of ancillary services

 

In a previous post I had this to say about synchronous condensers.

To give you an idea of the scale of the investment required for ancillary services, one of the leading solutions to this problem is the installation of a synchronous condensor. This is a significant piece of equipment that is likely to cost $80-100M per unit to install and commission.

It turns out I was too conservative, with the news today that Transgrid is asking the NSW state government for more money to cover some costs

The enormous spinning metal machines, each costing as much as $150 million, don’t generate electricity but provide stability for the grid, which has typically been provided by coal-fired power stations, but that is getting weaker as electricity generated by those power stations is phased out.

As noted in a recent AEMC directions paper 

... mainland TNSPs have an expected investment of 36 additional synchronous condensers within the coming decade. However, TNSPs may face challenges in acquiring enough synchronous condensers to meet the forecast inertia needs within the required timeframe. Subsequently, TNSPs may decide to explore alternative solutions, such as the conversion of retired thermal-based generation to synchronous condensers.

It's not clear that all 36 will be required, or available, and there are likely to be substitute service agreements with existing synchronous plant or new batteries, but either way the consumer will pay top price.

At $150M a pop, that's $5.4 billion of investment in network infrastructure that actually consumes power, not produce it. And then there are the O&M costs.