Readers of RenewEconomy may remember seeing images of the red flags that a pedestrian needed to carry in the early days of the motor car to warn bystanders of the impending approach of a self-propelled vehicle.

In the UK, under the Locomotive Act that was in force until the 1890s, the red flags had to be carried in front of the horse-less carriages and strict speed limits were imposed.

In the US state of Vermont, the Red Flag Law of 1894 put together by legislators – and thankfully vetoed by the governor – was even more onerous, requiring:

“Upon chance encounters with cattle or livestock to (1) immediately stop the vehicle, (2) “immediately and as rapidly as possible … disassemble the automobile”, and (3) “conceal the various components out of sight, behind nearby bushes” until equestrian or livestock is sufficiently pacified.”

To some in the wind and solar industry in Australia it must seem at times as though they have landed in Vermont in the late 19th century.

It’s not just the political and ideological attacks that they must endure, it is the endless roadblocks thrown at them by regulators and rule-makers, including a relatively new one that requires them to effectively pretend that they are a coal or gas generator.

Don’t laugh. Coalition MPs and conservative commentators argue that the “intermittent” nature of wind and solar should put them in the same category as the horse-less carriages, and carry fair warning as they approach and effectively hide in the bushes if a fossil fuel generator has some burning and boiling to do.

This is now seeping through to how the market is managed and operated. Like those first cars, It is not that the technology doesn’t work, it’s how they are misunderstood by the regulators, and how the transition is managed.

And in Australia right now, without leadership from the government, the slow response of the rule makers and the regulators, and “cultural” differences throughout the industry, it’s starting to present as a logistical nightmare.

RenewEconomy reported recently how five big solar farms in Victoria and NSW had their output effectively halved by the Australian Energy Market Operator as a result of system strength issues that it had newly identified, and it later warned of added costs and delays to new projects in the region.

It is not as though AEMO is up to no good. It wants to resolve this issue as quickly as it can, because it needs every megawatt of capacity it can get its hands on for the coming summer in Victoria, given that two gas and coal generation units are still off-line.

While it might be fair to ask of AEMO why this problem has suddenly materialised, as power engineer Bruce Miller wrote this week, this is not a failure of technology so much as a failure of the market design and rules that AEMO must operate under.

See: Voltage oscillations: Solar plants suffer because regulations haven’t caught up

The problems affecting these solar farms, Miller argues, are an entirely predictable result of the rules that have been put in place. Here, it is the rules that require inverter plant (wind, solar and battery storage) to respond to power system disturbances as fast as possible. They can do that, but what’s the point went everything else cannot?

“There is no good reason why we need inverter connected plant to respond much more quickly to system disturbances than is currently required of traditional generation, it probably just seemed to someone to be a good idea at the time.” he writes.

Just like the red flags. And the biggest “red flag” issue for wind and solar generators has been the requirement by local network operators to install what are known as “synchronous condensers”, effectively rotating machines that don’t burn any fuels but act like a turbine that is driven by gas or coal generation.

The networks are told they must insist on them for “system strength”. The renewable developers complain that the requests for these systems – some of them costing $20 or $25 million a piece, seem arbitrary and indiscriminate, and several projects located around the same substation in NSW have each been asked to install their own units, when one might have been sufficient for that part of the network.

And they are not the only ones complaining.

Transgrid – which has been one of the network operators making these rules, in a submission to the Australian Energy Market Commission, which sets the rules, highly the absurdity of these new requirements, the result of highly contentious edict that new wind and solar farms should “do no harm” to the grid.

The problem is that the new generators are being pinged for problems that already exist, just like rooftop solar is often blamed for voltage issues that largely occur at night. And the solutions mandated by the AEMC are making the problems worse, not better.

To read Transgrid’s letter to the AEMC is to get an insight into the madness of this “do no harm” edict. Like the red flags of yore, it might have sounded like a good idea, but as Transgrid points out, it has resulted in multiple syncons being installed in places where they are not really needed, causing higher prices for everyone, and in particular the consumers.

“The allocation of part of the responsibility of maintaining levels of system strength to connecting generators through the “do no harm” obligations is resulting, in practice, in a proliferation of smaller synchronous condensers across the power system that are not efficiently coordinated in either investment or operation,” Transgrid writes.

“This is significantly more costly for consumers than alternative approaches.”

But Transgrid also notes there is no guarantee that the machines will be actually switched on or used. Worse still, if these syncons were to be all switched on, there is every likelihood that it would add too much complexity and make the grid harder to manage rather than easier. “Synchronous condensers owned by different parties that are close together could create challenges in co-ordinating control systems and managing adverse reactions,” Transgrid writes.



Yet this is exactly what Transgrid is required to do, under the rules imposed by the AEMC. The whole thing is a complete and utter farce. The rules are not just adding costs and causing delays, they making the grid less manageable.

As Transgrid notes, the roll out of these machines lacks planning and lacks co-ordination. And that pretty much sums up the Australian electricity market.

As pointed out in the latest Energy Insiders podcast, the renewable energy target that requires at least 33,000 GWh of new renewable capacity has been law for the best part of a decade, yet the regulatory authorities have done little in preparation, refusing to believe that these new fangled machines would actually be a thing.

There is not enough transmission, the rules are outdated, and processes such as estimating marginal loss factors have become such an unfair burden that major investors say do not reflect what is actually happening on the grid ,and are now bringing investment to a halt.

Australia, and the rest of the world, is at the start of an energy transition that is every bit as dramatic as the one that saw the horse and cart replaced by automobiles more than a century ago. Yet we are burdened by the modern equivalent of the Vermont legislative assembly circa 1894, and without a smart enough executive and political elite to tell them to go and put a sock in it.

This is the problem with transitions. Managing them is difficult because you have to work out what to do with all the legacy systems, and that is more complex in an essential service. As energy experts note, if you started from scratch you likely wouldn’t need syncons, because they are only there to make the system look like the previous technology.

It’s the red flag moment for the energy transition. And to move forward, it is not so much about the technology itself, it’s about the culture of the regulatory and supervisory bodies, and whether they are looking to the future or the past, and if they influenced by the greed of the incumbents and/or their own ideology and ignorance.

Miller, in his piece, also refers to the transition from horse and cart to automobiles, and the rules that restricted the new vehicles to the same speed as the animals.

“Do we continue with these poorly defined rules for connection of plant? Or do we start making rules which actually take due account of the laws of physics and the physical limitations of the plant,” he writes.

“The recent rule changes do not reflect the laws of physics. In fact, if interpreted literally they make the connection of new plant whether traditional synchronous or inverter connected physically impossible.”

That’s how bad it has got. Australia really only has one energy institution, AEMO, which, thanks to the new CEO Audrey Zibelman, has changed its culture and is developing a plan to embrace the future as best it can – even if some observers suggest it still suffers from silos of resistance within its own ranks.

It has made giant steps forward, and can only operate under the rules of the market, and to add to its problems, is facing a potential crisis this summer, particularly in Victoria.

But while it is trying to forge ahead with the admirable Integrated System Plan, to try and ensure that the problems do not repeat themselves in future years, and to lay out a 20-year blueprint for the transition, at whatever speed it might occur, it is waiting for the other institutions and the politicians to catch up, particularly in relation to the rules under which it must operate.

And sadly, from the federal energy minister down, there is little evidence of that happening any time soon. They are too busy waving red flags, and imposing arbitrary speed limits. The country could do so much better.