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an assortment of new technology palaver

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I like the inset pic – very useful for the Chinese

Western Australia lithium mining boom

I’m hearing, better late than never, that lithium carbonate from Western Australia is in big demand. The state already provides most of the world’s lithium for all those batteries used to run smart devices, electric vehicles, and large-scale storage batteries such as South Australia’s Tesla-Neoen thingy at Jamestown (now 80% complete, apparently). Emissions legislation around the world will only add to the demand, with the French and British governments planning to ban the sale of petrol and diesel vehicles by 2040, following similar plans by India and Norway, and the major investments in EVs in China. Australia’s government, of course, is at the other end of the spectrum re EVs, but I’ve no doubt we’ll get there eventually (we’ll have to!). Tesla, Volvo, Nissan, Renault, Volkswagen and Mercedes are all pushing more EVs into the marketplace. So now’s the time, according to Money Boffins Inc, to buy shares in lithium and other battery minerals (I’ve never bought a share in my life). This lithium mining boom has been quite sudden and surprising to many pundits. In January of this year, only one WA mine was producing lithium, but by mid-2018 there will be eight, according to this article. The battery explosion, so to speak, is bringing increased demand for other minerals too, including cobalt, nickel, vanadium and graphite. Australia’s well-positioned to take advantage. Having said that, the amount of lithium we’re talking about is a tiny fraction of what WA exports in iron ore annually, but it’s already proving to be a big boost to the WA economy, and a big provider of jobs.

battery recycling

Of course all of this also poses a problem, as mentioned in my last post, and it’s a problem that the renewable energy sector should be at least ideologically driven to deal with: waste and recycling. Considering the increasing importance of battery technology in our world, and considering the many toxic components of modern batteries, such as nickel, lead acid, cadmium and mercury, it’s yet another disappointment that there’s no national recycling scheme for non-rechargeable batteries. Currently only lead acid batteries can be recycled, and the rest usually end up in landfill or are sent to be recycled overseas. So it’s been left to the industry to develop an Australian Battery Recycling Initiative (ABRI), which has an interesting website where you can learn about global recycling and many other things batterial – including, of course, how to recycle your batteries. Also, an organisation called Clean Up Australia has a useful battery recycling factsheet, which, for my own educational purposes I’m going to recycle here, at least partly. Battery types can be divided into primary, or single-use, and secondary, or rechargeable. The primary batteries generally use zinc and manganese in converting chemical to electrical energy. Rechargeable batteries use a variety of materials, including nickel cadmium, nickel metal hydride and of course lithium ion chemistry. Batteries in general are the most hazardous of waste materials, but there are also environmental impacts from battery production (mining mostly) and distribution (transport and packaging). As mentioned, Australian batteries are sent overseas for recycling – ABRI and other groups are trying to set up local recycling facilities. Currently a whopping 97% of these totally recyclable battery units end up in landfill, and – another depressing factoid – Australia’s e-waste is growing at 3 times the rate of general household waste. So the public is advised to use rechargeable batteries wherever possible, and to take their spent batteries to a proper recycling service (a list is given on the fact sheet). The ABRI website provides a more comprehensive list of drop-of services.

2015 registrations: Australia’s bar would be barely visible on this chart

EVs in Australia – a very long way to go

I recently gave a very brief overview of the depressing electric vehicle situation in Australia. Thinking of buying one? Good luck with that. However, almost all motorists are much richer than I am, so there’s hope for them. They’re Australia’s early adopters of course, so they need all the encouragement we can give them. Journalist Timna Jacks has written an article for the Sydney Morning Herald recently, trying to explain why electric vehicles have hit a dead end in Australia. High import duties, a luxury car tax and a lack of subsidies and infrastructure for electric vehicles aren’t exactly helping the situation. The world’s most popular electric car, the Nissan Leaf, is much more expensive here than in Europe or the US. And so on. So it’s hardly surprising that only 0.1% of all cars sold in Australia in 2015 were electric cars (compared with 23% and rising in EV heaven, aka Norway, 1.4% in France and 0.7% in the US). Of course Australia’s landscape’s more or less the opposite of compact, dense and highly urbanised Europe, and range anxiety might be a perennial excuse here. We have such a long way to go. I expect we’ll have to wait until shame at being the world’s laughing-stock is enough of a motivation.

Adelaide’s Tindo

I’ve been vaguely aware of Adelaide’s ‘green bus’ for some years but, mea culpa, haven’t informed myself in any depth up until now. The bus is called Tindo, which is a Kaurna aboriginal word meaning the sun. Apparently it’s the world’s first and only completely solar powered electric bus, which is quite amazing. The bus has no solar panels itself, but is charged from the solar panels at the Franklin Street bus station in the city centre. It’s been running for over four years now and I’m planning to take a trip on it in the very near future. I was going to say that it’ll be the first time I’ve been on a completely electric vehicle with no internal combustion engine but I was forgetting that I take tram trips almost every day. Silly me. Still, to take a trip on a bus with no noisy engine and no exhaust fumes will be a bit of a thrill for me. Presumably there will be no gear system either, and of course it’ll have regenerative braking – I’m still getting my head around this stuff – so the ride will be much less jerky than usual.

So here are some of the ‘specs’ I’ve learned about Tindo. It has a range of over 200 kilometres (and presumably this is assisted by the fact that its route is fixed and totally urban, so the regen braking system will be charging it up regularly). It uses 11 Swiss-made Zebra battery modules which are based on sodium nickel chloride, a type of molten salt technology. They have higher energy density, they’re lightweight and virtually maintenance free. According to the City of Adelaide website the solar PV system on the roof of the bus station is (or was – the website is annoyingly undated) ‘Adelaide’s largest grid-connected system, generating almost 70,000 kWh of electricity a year’. No connection to the ‘carbon-intensive South Australian electricity grid’ is another plus, though to be fair our grid is far less carbon intensive than Victoria’s which is almost all brown coal. South Australia’s grid runs on around half gas and half renewables, mostly wind. The regen braking, I must remind myself, means that when decelerating the bus uses no energy at all, and the motor electronically converts into an electrical generator, which generates electricity with the continued forward motion of the bus. There are many more specs and other bits of info on this Tindo factsheet.

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battery technology and the cobalt problem

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The battery in my iPhone 6+ is described as a lithium polymer, or Li-ion polymer battery. I’m trying to find out if it contains cobalt. Why? Because cobalt is a problem.

According to this Techcrunch article, most of the world’s cobalt is currently sourced from Africa, especially the Congo, one of the world’s poorest countries. Child labour is regularly used in the mines there, under pain of beatings and other forms of coercion. The battery industry uses about 42% of global cobalt production, and the rest is used in a range of essential military-industrial applications.

Incidentally, this article from teardown.com blog goes deep inside the iPhone 6+ battery, showing that it uses lithium cobalt oxide (LiCoO2) for the cathode.

I can think of three possible ways out of this problem. 1. Stop sourcing cobalt from the Congo, or anywhere else that has exploitative labour practices. 2. Reform those labour practices, to improve the lives of the workers and provide them with a fairer share of the tech revolution profits. 3. Find an alternative to cobalt for batteries and other applications.

I didn’t say there were easy solutions haha. Anyway, let’s examine them.

An online Fortune article from March this year, which by the way confirms that cobalt is indeed used in iPhone and iPad batteries, reported that Apple has responded to investigative articles by Washington Post and Sky News by no longer buying cobalt from companies that employ child labour. Of course, even if we take Apple at its word – and considering that the Congo provides 60% of the world’s cobalt, and other African sources may have similar problems, how else will Apple be able to source cobalt cheaply? – the problem of Congolese child labour remains. The Washington Post report focused on a Chinese company, Zhejiang Huayou Cobalt Company, which purchases a large percentage of Congolese cobalt. It seems highly unlikely that such a company will be as affected by public or media pressure as Apple. However, there are some positive signs. A report in the Financial Times from a year ago, entitled ‘China moves to quell child labour claims in Congo cobalt mines’, says that China has launched a ‘Responsible Cobalt Initiative’ to improve supply chain governance and transparency. Whether this means applying solution 1 or solution 2 to the problem is unclear, but presumably it’s solution 2, and it really is a serious initiative, put forward by the Chinese Chamber of Commerce for Metals, Minerals and Chemicals Importers and Exporters, backed by the OECD and involving a number of international tech companies. Of course we’ll have to wait for reports on how this initiative is faring, and on whether these companies are concerned to improve the lives of cobalt miners or simply to ban the under-age ones while still paying very little to the remainder. Continued scrutiny is obviously necessary.

Of course, solution 3 would be of most interest to tech-heads (though presumably the effect on the Congolese economy would be terrible). According to this marketing article, there isn’t too much cobalt available, and the demand for it is increasing sharply. One problem is that cobalt isn’t generally mined on its own as ‘primary cobalt’ but as a byproduct of copper or nickel, and both of these metals are experiencing a worldwide price plunge, with many mines suspending activities. Also the current supply chain for cobalt is being dominated by Chinese companies. This could have a stifling effect especially on the EV revolution. Governments in advanced countries around the world – though not in Australia – are mandating the adoption of electric vehicles and the phasing out of fossil-fuel-based road transport. The batteries for these vehicles all contain cobalt.

In the TechCrunch article mentioned above, journalist Sebastien Gandon examines the Tesla situation. The company has a target of 500,000 vehicles a year by 2018, with cobalt sourced exclusively from North America. On the face of it, this seems unrealistic. Canada and the US together produce about 4% of the world’s cobalt supply, and  acccording to Gandon the maths just doesn’t add up, to say the least. For a start, the mining companies Tesla is looking to rely on are not even operational as yet.

However, there are a few more promising signs. The Tesla model S has been using high energy density nickel-cobalt-aluminium-based (NCA) battery cells, which have a lower cobalt content than the nickel-manganese-cobalt (NMC) batteries of most other companies. There is also the possibility of adopting lithium-iron-phosphate (LFP) chemistry, or lithium-manganese-oxide (LMO), neither of which use cobalt, though their lower energy density is a problem. In any case, battery technology is going through a highly intensive phase at present, as I’ve already reported, and a move away from cobalt has become a distinct possibility. Nickel is currently being looked at, but results so far have been disappointing. There are certainly other options in the offing, and cobalt itself, which unlike oil is completely recyclable, could still be viable with greater focus. It isn’t so much that it is scarce, it’s more that, in the past, it hasn’t been a primary focus, but mining it as a primary source will require substantial upfront costs, and substantial time delays.

So, all in all, it’s a problematic future, at least in the short term, for vehicles and technologies using cobalt-based battery systems. We can only wait and see what comes out of it.

Written by stewart henderson

October 28, 2017 at 12:55 pm

electric vehicles in Australia, a sad indictment

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Toyota Prius

I must say, as a lay person with very little previous understanding of how batteries, photovoltaics or even electricity works, I’m finding the ‘Fully Charged’ and other online videos quite addictive, if incomprehensible in parts, though one thing that’s easy enough to comprehend is that transitional, disruptive technologies that dispense with fossil fuels are being taken up worldwide at an accelerating rate, and that Australia is falling way behind in this, especially at a governmental level, with South Australia being something of an exception. Of course the variation everywhere is enormous – for example, currently, 42% of all new cars sold today in Norway are fully electric – not just hybrids. This compares to about 2% in Britain, according to Fully Charged, and I’d suspect that the percentage is even lower in Oz.

There’s so much to find out about and write about in this field it’s hard to know where to start, so I’m going to limit myself in this post to electric cars and the situation in Australia.

First, as very much a lower middle class individual I want to know about cost, both upfront and ongoing. Now as you may be aware, Australia has basically given up on making its own cars, but we do have some imports worth considering, though we don’t get subsidies for buying them as they do in many other countries, nor do we have that much in the way of supportive infrastructure. Cars range in price from the Tesla Model X SUV, starting from $165,000 (forget it, I hate SUVs anyway), down to the Toyota Prius C and the Honda Jazz, both hybrids, starting at around $23,000. There’s also a ludicrously expensive BMW plug-in hybrid available, as well as the Nissan Leaf, the biggest selling electric car worldwide by a massive margin according to Fully Charged, but probably permanently outside of my price range at $51,000 or so.

I could only afford a bottom of the range hybrid vehicle, so how do hybrids work, and can you run your hybrid mostly on electricity? It seems that for this I would want a (more expensive) plug-in hybrid, as this passage from the Union of Concerned Scientists (USA) points out:

The most advanced hybrids have larger batteries and can recharge their batteries from an outlet, allowing them to drive extended distances on electricity before switching to [petrol] or diesel. Known as “plug-in hybrids,” these cars can offer much-improved environmental performance and increased fuel savings by substituting grid electricity for [petrol].

I could go on about the plug-ins but there’s not much point because there aren’t any available here within my price range. Really, only the Prius, the Honda Jazz and a Toyota Camry Hybrid (just discovered) are possibilities for me. Looking at reviews of the Prius, I find a number of people think it’s ugly but I don’t see it, and I’ve always considered myself a person of taste and discernment, like everyone else. They do tend to agree that it’s very fuel efficient, though lacking in oomph. Fuck oomph, I say. I’m the sort who drives cars reluctantly, and prefers a nice gentle cycle around the suburbs. Extremely fuel efficient, breezy and cheap. I’m indifferent to racing cars and all that shite.

Nissan Leaf

I note that the Prius  has regenerative braking – what the Fully Charged folks call ‘regen’. In fact this is a feature of all EVs and hybrids. I have no idea wtf it is, so I’ll explore it here. The Union of Concerned Scientists again:

Regenerative braking converts some of the energy lost during braking into usable electricity, stored in the batteries.

Regenerative braking” is another fuel-saving feature. Conventional cars rely entirely on friction brakes to slow down, dissipating the vehicle’s kinetic energy as heat. Regenerative braking allows some of that energy to be captured, turned into electricity, and stored in the batteries. This stored electricity can later be used to run the motor and accelerate the vehicle.

Of course, this doesn’t tell us how the energy is captured and stored, but more of that later. Regenerative braking doesn’t bring the car to a stop by itself, or lock the wheels, so it must be used in conjunction with frictional braking.  This requires drivers to be aware of both braking systems and how they’re combined – sometimes problematic in certain scenarios.

The V useful site How Stuff Works has a full-on post on regen, which I’ll inadequately summarise here. Regen (in cars) is actually celebrating its fiftieth birthday this year, having been first introduced in the Amitron, a car produced by American Motors in 1967. It never went into full-scale production. In conventional braking, the brake pads apply pressure to the brake rotors to the slow the vehicle down. That expends a lot of energy (imagine a large vehicle moving at high speed), not only between the pads and the rotor, but between the wheels and the road. However, regen is a different system altogether. When you hit the brake pedal of an EV (with hand or foot), this system puts the electric motor into reverse, slowing the wheels. By running backwards the motor acts somehow as a generator of electricity, which is then fed into the EV batteries. Here’s how HSW puts it:

One of the more interesting properties of an electric motor is that, when it’s run in one direction, it converts electrical energy into mechanical energy that can be used to perform work (such as turning the wheels of a car), but when the motor is run in the opposite direction, a properly designed motor becomes an electric generator, converting mechanical energy into electrical energy.

I still don’t get it. Anyway, apparently this type of braking system works best in city conditions where you’re stopping and going all the time. The whole system requires complex electronic circuitry which decides when to switch to reverse, and which of the two braking systems to use at any particular time. The best system does this automatically. In a review of a Smart Electric Drive car (I don’t know what that means – is ‘Smart’ a brand name? – is an electric drive different from an electric car??) on Fully Charged, the test driver described its radar-based regen, which connects with the GPS to anticipate, say, a long downhill part of the journey, and in consequence to adjust the regen for maximum efficiency. Ultimately, all this will be handled effectively in fully autonomous vehicles. Can’t wait to borrow one!

Smart Electric Drive, a cute two-seater

I’m still learning all this geeky stuff – never thought I’d be spending an arvo watching cars being test driven and  reviewed.  But these are EVs – don’t I sound the expert – and so the new technologies and their implications for the environment and our future make them much more interesting than the noise and gas-guzzling stink and the macho idiocy I’ve always associated with the infernal combustion engine.

What I have learned, apart from the importance of battery size (in kwh), people’s obsession with range and charge speed, and a little about charging devices, is that there’s real movement in Europe and Britain towards EVs, not to mention storage technology and microgrids and other clean energy developments, which makes me all the more frustrated to live in a country, so naturally endowed to take advantage of clean energy, whose federal government is asleep at the wheel on these matters, when it’s not being defensively scornful about all things renewable. Hopefully I’ll be able to report on positive local initiatives in this area in future, in spite of government inertia.

 

Written by stewart henderson

August 15, 2017 at 9:51 am

the SA government’s six-point plan for energy security, in the face of a carping Federal government

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South Australian Premier Jay Weatherill, right, with SA Energy Minister Tom Koutsantonis

The South Australian government has a plan for energy, which you can take a look at here. And if you’re too lazy to click through, I’ll summarise:

  1. Battery storage and renewable technology fund: Now touted as the world’s largest battery, this will be a storage facility for wind and solar energy, and if it works, it will surely be a major breakthrough, global in its implications. The financing of the battery (if we have to pay for it!) will come from a new renewable energy fund.
  2. New state-owned gas power plant: This will be a 250 MW capacity gas powered facility designed initially for emergency use, and treated as a future strategic asset when (and if) greater energy stability is achieved at the national level. In the interim the state government will (try to?) work with transmission and distribution companies to provide 200 MW of extra generation in times of peak demand.
  3. Local powers over the national market: The government will legislate for strong new state powers for its Energy Minister as a last-resort measure to enable action in South Australia’s best interests when in conflict with the national market. In addition, all new electricity-generation projects above 5 MW will be assessed as to their input into the state electricity system and its security.
  4. New generation for more competition: The SA Government will use its own electricity contract (for powering schools, hospitals and government services) to tender for more new power generators, increasing competition in the market and putting downward pressure on prices.
  5. South Australian gas incentives: Government incentives will be given for locally-sourced gas development (we have vast untapped resources in the Cooper Basin apparently) so that we can replace all that dirty brown coal from Victoria.
  6. Energy Security Target: This new target, modelled by Frontier Economics, will be designed to encourage new investments in cleaner energy, to increase competition and put downward pressure on prices. The SA government will continue to advocate for an Emissions Intensity Scheme (EIS), contra the Federal government. It’s expected that the Energy Security Target will morph into an EIS over time – depending largely on supportive national policy. Such a scheme is widely supported by industry and climate science.

It’s an ambitious plan perhaps but it’s definitely a plan, and definitely actionable. The battery storage part is of course generating a lot of energy already, both positive and negative, as pioneering projects tend to do. I’m very much looking forward to December’s unveiling. Interestingly, in this article from April this year, SA Premier Jay Weatherill claimed 90 expressions of interest had been received for building the battery. Looks like they never stood a chance against the mighty Musk. In the same article, Weatherill announced that the expression of interest process had closed for the building of SA’s gas power plant, point two of the six-point plan. Thirty-one companies from around the world have vied for the project, apparently. And as to point three, the new powers legislation was expected to pass through parliament on April 26. Weatherill issued a press release on the legislation in late March. Thanks to parliamentary tracking, I’ve found that the bill – called the Bill to Amend the Emergency Management (Electricity Supply Emergencies) Act – was passed into law by the SA Governor on May 9.

Meanwhile, two regional projects, one in the Riverland and another in the north of SA, are well underway. A private company called Lyon Group is building a $1 billion battery and solar farm at Morgan, and another smaller facility, named Kingfisher, in the north. In this March 30 article by Chris Harmsen, a spokesperson for Lyon Group said the Riverland project, Australia’s largest solar farm, was 100% equity financed (I don’t know what that means – I’ll read this later) and would be under construction within months. It will provide 300MW of storage capacity. The 120 MW Kingfisher project will begin construction in September next year. Then there’s AGL’s 210MW gas-fired power station on Torrens Island, mentioned previously. It’s worth noting that AGL’s Managing Director Andy Vesey spoke of the positive investment climate created by the SA government’s energy plans.

So I think it’s fair to say that in SA we’re putting a lot of energy into energy. Meanwhile, the Federal Energy minister, Josh Frydenberg, never speaks positively about SA’s plans. Presumably this is because SA’s government is on the other side of the political divide. You can’t say anything positive about your political enemies because they might stop being your enemies, and then what would you do? The identity crisis would be intolerable.

I’ve written about macho adversarial systems in politics, law and industrial relations before. Frydenberg, as the Federal Minister, must be well aware of SA’s six-point plan (found with a couple of mouse-clicks), and of the plans and schemes of all the other state governments, otherwise he’d be massively derelict in his duty. Yet he’s pretty well entirely dismissive of the Tesla-Neoen deal, and describes the other SA initiatives, pathetically, as ‘an admission of failure’. It seems almost a rule with the current Feds that you don’t mention renewable, clean energy positively and you don’t mention the SA government’s initiatives in the energy field except negatively. Take for example Frydenberg’s reaction to recent news that the Feds are consulting with the car industry on reducing fuel emissions. He brought up the ‘carbon tax’ debacle (a reference to the former Gillard government’s 2012 carbon pricing scheme, repealed by the Abbott government in 2014), declaring that there would never be another one, as if the attempt to reduce vehicle emissions – carbon emissions – had nothing to do with carbon and its reduction, which was what the carbon pricing scheme was all about. This is the artificiality of adversarial systems – where two parties pretend to be further apart than they really are, so that they can engage in the apparently congenial activity of trading insults and holier-than-thou tirades. It’s so depressing. Frydenberg was at pains to point out that the government’s interest in reducing fuel emissions was purely to benefit family economies. It would’ve taken nothing but a bit of honesty and integrity to also say that reduced emissions would be environmentally beneficial. But this apparently would be a step too far.

In my next post I hope to get my head around battery storage technology, and lithium-ion batteries.

References/links

https://ussromantics.com/2017/07/14/whats-weatherills-plan-for-south-australia-and-why-do-we-have-the-highest-power-prices-in-the-world-oh-and-i-should-mention-elon-musk-here-might-get-me-more-hits/

https://ussromantics.com/2011/06/25/adversarial-approaches-do-we-need-them-or-do-we-need-to-get-over-them/

http://ourenergyplan.sa.gov.au/

http://www.abc.net.au/news/2017-04-13/sa-gas-fire-power-station-gains-international-interest/8442578

https://www.premier.sa.gov.au/index.php/jay-weatherill-news-releases/7263-new-legislation-puts-power-back-in-south-australians-hands

http://www.abc.net.au/news/2017-04-13/sa-gas-fire-power-station-gains-international-interest/8442578

https://www.parliament.sa.gov.au/Legislation/BillsMotions/SALT/Pages/default.aspx?SaltPageTypeId=2&SaltRecordTypeId=0&SaltRecordId=4096&SaltBillSection=0

http://www.abc.net.au/news/2017-03-30/new-solar-project-announced-for-sa-riverland/8400952

http://www.investopedia.com/terms/e/equityfinancing.asp

https://en.wikipedia.org/wiki/Carbon_pricing_in_Australia

 

What’s Weatherill’s plan for South Australia, and why do we have the highest power prices in the world? Oh, and I should mention Elon Musk here – might get me more hits

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just a superhero pic to rope people in

I’ve written a few pieces on our electricity system here in SA, but I don’t really feel any wiser about it. Still, I’ll keep having a go.

We’ve become briefly famous because billionaire geek hero Elon Musk has promised to build a ginormous battery here. After we had our major blackout last September (for which we were again briefly famous), Musk tweeted or otherwise communicated that his Tesla company might be able to solve SA’s power problems. This brought on a few local geek-gasms, but we quickly forgot (or I did), not realising that our good government was working quietly behind the scenes to get Musk to commit to something real. In March this year, Musk was asked to submit a tender for the 100MW capacity battery, which is expected to be operational by the summer. He has recently won the tender, and has committed to constructing the battery in 100 days, at a cost of $50 million. If he’s unsuccessful within the time limit, we’ll get it for free.

There are many many South Australians who are very skeptical of this project, and the federal government is saying that the comparatively small capacity of the battery system will have minimal impact on the state’s ‘self-imposed’ problems. And yet – I’d be the first to say that I’m quite illiterate about this stuff, but if SA Premier Jay Weatherill’s claim is true that ‘battery storage is the future of our national energy market’, and if Musk’s company can build this facility quickly, then it’s surely possible that many batteries could be built like the one envisaged by Musk, each one bigger and cheaper than the last. Or have I just entered cloud cuckoo land? Isn’t that how technology tends to work?

In any case, the battery storage facility is designed to bring greater stability to the state’s power network, not to replace the system, so the comparisons made by Federal Energy Minister Josh Frydenberg are misleading, probably deliberately so. Frydenberg well knows, for example, that SA’s government has been working on other solutions too, effectively seeking to becoming independent of the eastern states in respect of its power system. In March, at the same time as he presented plans for Australia’s largest battery, Weatherill announced that a taxpayer-funded 250MW gas-fired power plant would be built. More recently, AGL, the State’s largest power producer and retailer, has announced  plans to build a 210MW gas-fired generator on Torrens Island, upgrading its already-existing system. AGL’s plan is to use reciprocating engines, which executive general manager Doug Jackson has identified as best suited to the SA market because of their ‘flexible efficient and cost-effective synchronous generation capability’. I heartily agree. It’s noteworthy that the AGL plan was co-presented by its managing director Andy Vesey and the SA Premier. They were at pains to point out that the government plans and the AGL plan were not in competition. So it does seem that the state government has made significant strides in ensuring our energy security, in spite of much carping from the Feds as well as local critics – check out some of the very nasty naysaying in the comments section of local journalist Nick Harmsen’s articles on the subject (much of it about the use of lithium ion batteries, which I might blog about later).

It’s also interesting that Harmsen himself, in an article written four months ago, cast serious doubt on the Tesla project going ahead, because, as far as he knew, tenders were already closed on the battery storage or ‘dispatchable renewables’ plan, and there were already a number of viable options on the table. So either the Tesla offer, when it came (and maybe it got in under the deadline unbeknown to Harmsen), was way more impressive than others, or the Tesla-Musk brand has bedazzled Weatherill and his cronies. It’s probably a combo of the two. Whatever, this news is something of a blow to local rivals. What is fascinating, though is how much energetic rivalry, or competition, there actually is in the storage and dispatchables field, in spite of the general negativity of the Federal government. It seems our centrist PM Malcolm Turnbull is at odds with his own government about this.

So enough about the Tesla-Neoen deal, and associated issues, which are mounting too fast for me to keep up with right now. I want to focus on pricing for the rest of this piece, because I have no understanding of why SA is now paying the world’s highest domestic electricity prices, as the media keeps telling us.

According to this Sydney Morning Herald article from nearly two years ago, which of course I can’t vouch for, Australia’s electricity bills are made up of three components: wholesale and retail prices, based on supply and demand (39% of cost); the cost of poles and wires (53%); and the cost of environmental policies (8%). The trio can be simplified as market, network and environmental costs. Market and network costs vary from state to state. The biggest cost, the poles and wires, is borne by all Australian consumers (at least all on the grid), as a result of a massive $45 billion upgrade between 2009 and 2014, due to expectations of a continuing rise in demand. Instead there’s been a fall, partly due to domestic solar but in large measure because of much tighter and more environmental building standards nationwide as part of the building boom. The SMH article concludes, a little unexpectedly, that the continuing rise in prices can only be due to retail price hikes, at least in the eastern states, because supply is steady and network costs, though high, are also steady.

A more recent article (December 2016) argues that a rising wholesale price, due to the closure of coal-fired power stations in SA and Victoria and higher gas prices, is largely responsible. Retail prices are higher now than when the carbon tax was in place in 2013.

This even recenter article from late March announces an inquiry by the Australian Competition and Consumer Commission (ACCC) into retail pricing of electricity, which unfortunately won’t be completed till June 30 2018, given its comprehensive nature. It also contains this telling titbit:

A report from the Grattan Institute released earlier in March found a decade of competition in the market had failed to deliver better deals for customers, with profit margins on electricity bills much higher than for many other industries.

However, another article published in March, and focusing on SA’s power prices in particular (it’s written by former SA essential services commissioner Richard Blandy), takes an opposing view:

Retailing costs are unlikely to be a source of rapidly rising electricity prices because they represent a small proportion of final prices to consumers and there is a high level of competition in this part of the electricity supply chain. Energy Watch shows that there are seven electricity retailers selling electricity to small businesses, and 12 electricity retailers selling electricity to households. Therefore, price rises at the retail level are likely to be cost-based.

Blandy’s article, which looks at transmission and distribution pricing, load shedding and the very complex issue of wholesale pricing and the National Energy Market (NEM), needs at least another blog post to do justice to. I’m thinking that I’ll have to read and write a lot more to make sense of it all.

Finally, the most recentest article of only a couple of weeks ago quotes Bruce Mountain, director of Carbon and Energy Markets, as saying that it’s not about renewables (SA isn’t much above the other states re pricing), it’s about weak government control over retailers (could there be collusion?). Meanwhile, politicians obfuscate, argue and try to score points about a costly energy system that’s failing Australian consumers.

I’ll be concentrating a lot on this multifaceted topic – energy sources, storage, batteries, pricing, markets, investment and the like, in the near future. It exercises me and I want to educate myself further about it. Next, I’ll make an effort to find out more about, and analyse, the South Australian government’s six-point plan for our energy future.

References and more reading for masochists

http://www.abc.net.au/news/2017-03-10/tesla-boss-elon-musk-pledges-to-fix-sas-electricity-woes/8344084

http://www.adelaidenow.com.au/business/sa-government-announces-who-will-build-100mw-giant-battery-as-part-of-its-energy-security-plan/news-story/9f83072547f41f4f5556477942168dd9

http://www.smh.com.au/business/sunday-explainer-why-is-electricity-so-expensive-20150925-gjvdrj.html

http://www.skynews.com.au/business/business/market/2017/03/27/accc-to-find-out-why-power-prices-are-so-high.html

http://www.adelaidenow.com.au/news/south-australia/south-australia-will-have-highest-power-prices-in-the-world-after-july-1-increases/news-story/876f9f6cefce23c62395085c6fe0fd9f

http://indaily.com.au/news/business/analysis/2017/03/07/why-sas-power-prices-are-so-high-and-the-huge-risks-of-potential-fixes/

http://www.theaustralian.com.au/opinion/columnists/graham-richardson/jay-weatherill-must-come-clean-on-elon-musks-battery-deal/news-story/f471b33ebdf140a71b41e0b0bea7894f

http://www.news.com.au/technology/environment/climate-change/why-higher-electricity-prices-are-inevitable/news-story/042712e35c08bf798ed993d13ee573ea

Written by stewart henderson

July 14, 2017 at 10:55 am