The Commonwealth Government's renewable energy targets will continue to drive the expansion of renewable generation within the Australian National Electricity Market (NEM). While it is well known that increasing penetrations of the variable, non-synchronous renewable energy sources pose significant challenges to maintaining network security, the same renewable sources, which have virtually zero short run marginal cost, are influencing wholesale electricity prices. In NEM regions with high wind penetration, this reduces the average pool price and hence generator revenue, impacting the profitability of traditional synchronous generators. The South Australian region is an interesting example of these challenges in Australia, and has already witnessed the withdrawal of the Northern Power Station, a large coal-fired synchronous generator. This paper aims to investigate whether the withdrawal of synchronous generators (coal and gas) from the South Australian network would see an increased utilisation of load following and peaking (expensive) generators, and hence a consequential increase in the average pool price. To achieve this aim, a dispatch model is developed in this paper by employing historical wind, demand and interconnector data. The model dispatch is then applied to investigate the frequency response under a typical worst case scenario.
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