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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

Is wind power prohibitively expensive? Apparently not

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that’s a bloody big blade

Recently I heard retiring WA liberal senator Chris Back being interviewed, mainly on funding for Catholic schools, on ABC’s breakfast program. He was threatening to cross the floor on the Gonski package, but while he was at it he took a swipe at wind power, claiming it was heavily subsidised and not cost effective. Unfortunately I’ve not been able to find the whole interview online, to get his exact words, but as someone interested in renewables, and living in a state where wind power is prominent, I want to look more carefully at this issue.

On googling the question I’ve immediately been hit by link after link arguing that wind power is just too expensive. Is this a right-wing conspiracy? What are the facts? As I went deeper into the links – the second and third pages – I did become suspicious, as attacks on wind power spread to solar power and renewable energy in general. It seems there’s either a genuine backlash or there’s some manipulating going on. In any case it seems very difficult to get reliable, unbiased data one way or another on the cost-effectiveness of this energy source.

Of course, as with solar, I’m always hearing that wind power is getting cheaper. Thoughts off the top of my head: a standard wind farm of I don’t know how many units would be up-front quite expensive, though standardised, ready-tested designs will have brought per unit price down over the years. Maintenance costs, though, would be relatively cheap. And maybe with improved future design they could generate power at higher wind speeds than they do now. They seem to be good for servicing small towns and country regions. How they work with electricity grids is largely a mystery to me. There’s a problem with connecting them to other energy sources, and they’re not reliable enough (because the wind’s not reliable enough) to provide base-load power. I don’t know if there’s any chance of somehow storing excess energy generated. All of these issues would affect cost.

I also wonder, considering all the naysayers, why hard-headed governments, such as the Chinese, are so committed to this form of energy. Also, why has the government of Denmark, a pioneering nation in wind power, backed away from this resource recently, or has it? It’s so hard to find reliable sources on the true economics of wind power. Clearly, subsidies muddy the water, but this is true for all energy sources. It’s probably quixotic to talk about the ‘real cost’ of any of them.

Whatever the cost, businesses around the world are investing big-time in wind and other forms of renewable energy. In the US, after the bumbling boy-king’s highly telegraphed withdrawal from the Paris agreement, some 900 businesses and investors, including many of the country’s largest firms, signed a pledge to the UN that there were still ‘in’. The biggest multinational companies are not only jumping on the bandwagon, they’re fighting to drive it, creating in the process an unstoppable global renewable energy network.

The Economist, an American mag, had this to say in an article only recently:

In America the cost of procuring wind energy directly is almost as cheap as contracting to build a combined-cycle gas power plant, especially when subsidies are included…. In developing countries, such as India and parts of Latin America and the Middle East, unsubsidised prices at solar and wind auctions have fallen to record lows.

Australia’s current government, virtually under siege from its conservative faction, is having a hard time coming to terms with these developments, as Chris Back’s dismissive comments reveal, but the direction in which things are going vis-à-vis energy supply is clear enough. Now it’s very much a matter of gearing our electricity market to face these changes, as soon as possible. Without government support this is unlikely to happen, but our current government is more weakened by factionalism than ever.

Australia is 17th in the world for wind power, with a number of new wind farms becoming operational in the last year or so. South Australia’s push towards wind power in regional areas is well known, and the ACT is also developing wind power in its push towards 100% renewable energy by 2020. Australia’s Clean Energy Council provides this gloss on the wind energy sector which I hope is true:

Technological advances in the sector mean that wind turbines are now larger, more efficient and make use of intelligent technology. Rotor diameters and hub heights have increased to capture more energy per turbine. The maturing technology means that fewer turbines will be needed to produce the same energy, and wind farms will have increasingly sophisticated adaptive capability.

The US Department of Energy website has a factsheet – ‘top 10 things you didn’t know about wind power’, and its second fact is bluntly stated:

2. Wind energy is affordable. Wind prices for power contracts signed in 2015 and levelized wind prices (the price the utility pays to buy power from a wind farm) are as low as 2 cents per kilowatt-hour in some areas of the country. These rock-bottom prices are recorded by the Energy Department’s annual Wind Technologies Market Report.

As The Economist points out, in the article linked to above, Trump’s ignorant attitude to renewables and climate science will barely affect the US business world’s embrace of clean energy technology. I’m not sure how it works, but it seems that the US electricity system is less centralised than ours, so its states are less hampered by the dumbfuckery of its national leaders. If only….

Written by stewart henderson

July 3, 2017 at 2:11 pm

on the preliminary report into the future of the NEM – part 2

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session-3-impact-on-us-ancillary-services-markets-from-variable-renewable-energy-3-638

Chapter 5 of the report focuses on the challenges to NEM system reliability caused by increasing VRE penetration, and on possible reforms to the system to accommodate these changes. Price signals, bidding, and market cap prices and floors, as well as many other terms dealt with in this chapter, are definitely outside my sphere of knowledge or interest, but I feel duty bound to try and make sense of them. For a useful beginner’s guide to the NEM, check out this ABC site, though it dates from 2010, and it’s fascinating to note how things have changed since then. The AEMO was only established in 2009.

The NEM is an ‘energy-only’ market, rather than a capacity market. An energy-only market is one in which the companies generating energy are paid for the electricity they sell. In a capacity market they would be paid for keeping generation capacity available to cover what might be a fluctuating demand. With an energy-only market, producers would presumably be focused on demand, not wishing to provide more of something they can’t sell when demand is down, as it has been in recent times. However, base load demand, which is intermittent and unpredictable, becomes a particular problem when investment in the kind of generators that provide base load power is low. The report has this to say on the matter:

The NEM relies on price signals (subject to market price caps and floors), performance standards and market information to incentivise the development and retirement of generation infrastructure. When there is sufficient baseload supply, average prices tend to be low, signalling that no new investment in base load generation is needed. When base load supply tightens, average prices increase, signalling that investment in base load generation is needed. Peaking generators respond to similar patterns but look to higher price periods associated with peak demand.

I don’t really understand this, especially the bit about peaking generators, which sounds as if there are separate generators for peak demand, but that can’t be right. In any case, what this chapter tells me is that the economics of electricity generation in a transforming and uncertain market are fiendishly difficult to comprehend and control. The review ends the chapter, and all other chapters, with consultation questions which help concentrate the mind on the issues at stake. These include questions about the NEM’s reliability settings, liquidity in the market for forward contracts to ensure supply for business and commercial enterprises (and the effect of increasing levels of VRE on forward contracts, and how this can be catered for), and other questions about creating or ensuring future investment.

Chapter 6 deals with the problem of the seemingly ever-increasing cost of electricity to the consumer. The chapter divides itself into sections on wholesale costs and retail pricing. It seems Australia no longer experiences low electricity costs by OECD standards. Network investments have recently driven prices up, and further rises are expected due to generator closures, the international price of gas, and constraints on gas supply. Again the report emphasises the role of gas, at least in the interim:

Gas has the potential to smooth the transition to a lower emissions electricity sector. Gas generation provides the synchronous operation that is key to maintaining technical operability with increased renewable generation until new technologies are available and cost-effective. Furthermore, gas is dispatchable when required.

It seems there’s an intergovernmental understanding that reform is desperately needed to develop and incentivise the local gas market. There are many roadblocks to successful reform, which are currently affecting wholesale costs which will lead to higher retail prices.

Some 43% of current residential electricity prices are made up of network charges, mostly for distribution. Many network renovations were necessary to meet revised standards. A 2013 Productivity Commission inquiry criticised ‘inefficiencies in the industry and flaws in the regulatory environment’ in respect of the planning of large transmission investments and management of demand. Consumer concern about rising prices is driving reform in this area, but we’re yet to see any clear results. Also, there is a difficult balance to be struck between system reliability and cost. A significant proportion of consumers have expressed a willingness to live with reduced reliability for reduced cost.

There has been a difficulty also in forecasting demand, and therefore the spread of cost. Reduced peak demand in the period 2008 to 2013 wasn’t foreseen. The reduction, likely driven increasing electricity costs, was a result of many factors, such as solar installations, energy efficiencies and reduced consumption. There’s a plan to introduce ‘cost reflective pricing’, which means ‘charging prices that accurately reflect the cost of providing network services to different consumer groups’. This is expected to reduce peak demand overall, as will increasing use of solar and, in the future, battery storage.

Retail pricing is another matter, and according to the report there is a lack of transparency in the retail market. Retailing electricity is obviously complex and involves covering wholesale costs as well as billing, connections, customer service, managing bad debts, marketing, return on investment, inter alia. We can only determine whether the retail market is operating fairly when these costs are open to scrutiny.

Chapter 7 deals with energy market governance from a national, whole-of-system perspective. The report stresses urgency on this, though given the complexity of the system and the divided views of policy-makers, it’s unlikely that decisions on integrating the system and making it more flexible will be forthcoming in the immediate future. The governance of the NEM is divided between policy-maker (the COAG Energy Council), rule-maker (AEMC), operator (AEMO) and regulator (AER, the Australian Energy Regulator). None of these bodies, the report notes, are integrated with bodies advising on emissions reduction. Again, the report doesn’t advance a plan for an improved governance system, but posts consultation questions for how improvements might be made. These include amendments to various rules and guidelines, methods for improving accountability and transparency, and expedited decision-making in a rapidly transforming market.

The report includes a number of appendices, the first and most important being a comparison of the NEM with other energy systems and markets worldwide, including those with a large market share of VRE, such as Denmark and Ireland. It is noted that the transformation of these markets, as well as larger markets in Spain and Germany, is being managed apparently without compromising energy security. However, the variety and complexity of many overseas markets and systems makes comparisons well-nigh impossible for someone as uninitiated as myself. Suffice to say that the role of interconnectors for system security is very important in many European regions, and support from governments for a more flexible system to accommodate VRE is more widespread.

Written by stewart henderson

January 2, 2017 at 9:09 am

South Australia and electricity revisited

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1476136506464

Canto: So what’s the latest on SA’s statewide blackout of September 28 last year, who’s to blame, who’s blaming who, and what solutions are in the offing, if any?

Jacinta: Well the preliminary report on the NEM, which we’ve been reading and writing about, has a few things to say about this, and they’re based on the findings of the Australian Energy Market Operator (AEMO) in its own preliminary report.

Canto: He said she said.

Jacinta: Well maybe sort of. So the SA blackout is presented as a case study. Here in SA we have a very high proportion of VRE (variable renewable energy) generation – one of the highest in the world. Our peak demand as a region is 3300 MW, and our supply capacity is almost 2900 MW of gas, almost 1600 MW of wind, and 700 MW of installed solar. We’re connected to the rest of the NEM by two interconnectors, an AC connector with a capacity of 600-650 MW, and a DC connector with a capacity of 220 MW. With electricity demand here declining, or at least not growing, synchronous generation and supply have reduced, with a resultant reduction in system inertia.

Canto: I presume by system inertia you mean the tendency for a machine, a vehicle, or a generator, whatever, a system to keep going once the power’s switched off. Like the QE2 has a lot of system inertia.

Jacinta: Right, but it’s a particularly important term in reference to power generation. There are some neat explanations of this online, but I’ll give a summary here. Coal-fired power stations work through the burning of coal which generates steam to turn a turbine, putting energy into the grid, and being massive, it has a lot of spinning inertia. Slow to fire up, slow to wind down. Solar, though, doesn’t work that way. It has no spinning or even moving parts. When the sun’s off, it’s off, but when it’s on it’s on. There’s really no inertia at all in a conventional solar PV system.

Canto: And wind? That’s the principal renewable energy here.

Jacinta: Yes that has inertia, certainly, but it’s variable and not as significant as perhaps it could be. So anyway on the morning of the blackout weather forecasts were grim, but not enough for AEMO to put out alerts for a ‘credible contingency event’. As it turned out there were at least seven tornadoes in the north of the state that day, as well as numerous lightning strikes and high winds which caused structural damage to transmission lines. At blackout time electricity demand in the state was a little over 1800 MW, with nearly half of it being supplied by wind farms, and of the rest about a third came from gas-fired generators, and the other 600 or so megawatts came through the interconnectors from Victoria. The main Heywood connector was approaching its operating limit. Short circuits to the transmission lines, caused by lightning, were the probable proximal cause of the blackout. Thirteen wind farms were in operation at the time, and eleven of them experienced ‘voltage dips’. What happens in these circumstances is that ‘fault ride-though’ responses are invoked. However, nine of the eleven farms had a lower pre-set limit for the ride-through response to proceed, and after a number of dips those nine wind farms cut their connection. The other two had higher pre-set limits and continued operation.

Canto: Ahh, so those preset limits were set too low?

Jacinta: Maybe – that’s one for further investigation. So the lack of generation from the wind farms caused an overload on the Heywood interconnector, and it was disconnected as per protection systems, resulting in frequency failure on the grid, and blackness fell upon all the land.

Canto: Right, so how did things get restarted? What’s the normal procedure?

Jacinta: Well, there’s this contracted service, called the System Restart Ancillary Service, which in SA is contracted to two major electricity generators (unnamed in the report), who can supposedly restart regardless of the grid situation, and provide power to the transmission network, but these servers failed for unexplained reasons, and power was finally restored through the Heywood interconnector together with the Torrens Island power station.

Canto: Okay, so now the fallout. How could things have been done differently?

Jacinta: Some near-term fixes have been implemented already. Firstly, having to do with frequency rates which I won’t go into here, and secondly in relation to wind farms. Five of them have made changes to their fault ride-through settings, and AEMO is looking at this issue for wind farms across the NEM. The Australian Energy Regulator, another bureaucratic body, will have completed a full analysis of the blackout by early next year to determine if there were any breaches of regulations. Obviously it’ll be looking at the conduct of AEMO throughout, as well as that of the transmission operator, ElectaNet. It’ll also look at these fault ride-though settings of wind farms and the failures of the System Restart Ancillary Service. It all sounds as if everything’s being done that can be done, but the major problem is that grid security as it stands can only be provided by large generators. The report again mentions gas-fired generators as the best solution, at least in the short to medium term.

Canto: So, as the grid, and the general provision of electricity, undergo these transformations, we’ll no doubt experience a few more of these hopefully minor setbacks, which we can learn from as we develop security for a more diverse but more integrated system…

Jacinta: Greater integration might require less squabbling about the future of energy. I can’t see that happening in the near future, unfortunately.

Written by stewart henderson

December 25, 2016 at 4:04 pm

on the preliminary report into the future of the NEM – part 1

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Australia’s Chief Scientist, Alan Finkel, who also happens to be a regular columnist for Cosmos, Australia’s premier science magazine, of which I’m a regular reader, has released his panel’s preliminary report on our national electricity market (NEM), and it has naturally received criticism from within the ranks of Australia’s conservative government, which is under pressure from its most conservative elements, led by Tony Abbott amongst others, who are implacably opposed to renewable energy.

The report confirms that the NEM is experiencing declining demand due to a range of factors, such as the development of new technologies, improved energy efficiency and a decline in industrial energy consumption. It makes a fairly reasonable assumption, but one unwelcome to many conservatives, that our electricity market is experiencing an unprecedented and irreversible phase of transition, and that this transition should be managed appropriately.

The NEM has been in operation for over 20 years, and the recent blackout here in South Australia (late September 2016) was its first real crisis. The issue as identified in the report is that variable renewable energy (VRE) sources are entering and complicating the market, which heretofore has been based on the synchronous generation of AC electricity at a standard system frequency. VRE generation is multiform and intermittent, and as such doesn’t sit well with the traditional system.

There are a number of other complicating issues. Improvements in building design and greater public awareness regarding emissions reduction have led to a decrease in overall energy consumption, while high peak demand on occasion remains a problem. Also the cost of electricity for the consumer has risen sharply in recent years, largely due to network investment (poles and wires). It’s expected that prices will continue to climb due to the closure of coal-fired power stations and the rising cost of gas. Interestingly, the report promotes gas as a vital energy source for this transitional period. It expresses concern about our overseas sales of gas, our low exploration rates, and negative attitudes to the fuel from certain states and territories. Rooftop solar systems, numbering more than 1.5 million, have further complicated the market, as the Australian Energy Market Operator (AEMO) understandably finds it difficult to measure their impact. System integration, which takes solar and wind energy system contributions into account, is clearly key to a successful NEM into the future.

The report also stresses Australia’s commitment to emissions reductions of 26-28% by 2030. It points out that business investors are turning away from fossil fuels, or what they call ’emission intensive power stations’, and financial institutions are also reluctant to back such investments. Given these clear signals, the report argues that a nationally integrated approach to a system which encourages and plans for a market for renewables is essential. This is clearly not what a backward-looking conservative government wants to hear.

So the report describes an ‘energy trilemma’: provision of high level energy security and reliability; affordable energy services for all; reduced emissions. More succinctly – security, affordability and the environment.

In its first chapter, the report looks at new technology. The costs of zero-emission wind turbines and solar PVs are falling, and this will maintain their appeal at least in the short term. Other such technologies, e.g. ‘concentrated solar thermal, geothermal, ocean, wave and tidal, and low emission electricity generation technologies such as biomass combustion and coal or gas-fired generation with carbon capture and storage’ (p13), are mentioned as likely technologies of the future, but the report largely focuses on wind and solar PV in terms of VRE generation. The effect of this technology, especially in the case of rooftop solar, is that consumers are engaging with the market in new ways. The penetration of rooftop solar in Australia is already the highest in the world, though most of our PV systems have low capacity. Battery storage systems, a developing technology which is seeing cost decreases, will surely be an attractive proposition for future solar PV purchasers. Electric vehicles haven’t really taken off yet in Australia, but they are making an impact in Europe, and the AEMO has projected that 10% of cars will be electric by 2030, presenting another challenge to an electricity system based largely on the fossil fuels such vehicles are designed to do without.

The management of these new and variable technologies and generators may involve the evolution of micro-grids as local resources become aggregated. Distributed, two-way energy systems are the likely way of the future, and an Electricity Network Transformation Roadmap has been developed by CSIRO and the Energy Networks Association to help anticipate and manage these changes.

In chapter 2 the report focuses on consumers, who are becoming increasingly active in the electricity market, which was formerly very much a one way system – you take your electricity from the national grid, you pay your quarterly bill. With distributed systems on the rise, consumers are becoming traders and investors in new forms of generation. The most obvious change is with rooftop PV. The national investment in these systems has amounted to several million dollars, with the expectation that individual households will be generating electricity more cleanly, more efficiently, and also more cheaply, notwithstanding the traditional electricity grid. Developments in battery storage and other technologies will inevitably lead to consumers moving off-grid, likely creating financial stress for those who remain. The possibilities for developing micro-grids to reduce costs will further complicate this evolving situation. Digital (smart) metering and new energy management software empower consumers to control usage. And while this is currently occurring mostly at the individual level, industrial consumers will also be keen to curb usage, creating added pressure for a more flexible and diverse two-way market. The report emphasises that the focus should shift more towards demand management in terms of grid security. One of the obvious problems from the point of view of consumers is that those on low incomes, or renters, who have little capacity to move off-grid (or desire in the case of passive users), may bear the burden of grid maintenance costs at increasing rates.

Chapter 3 deals with emissions. In reference to the Paris Agreement of 2015, which has been ratified by Australia, the report makes this comment which has been picked up by the media:

While the electricity sector must play an important role in reducing emissions, current policy settings do not provide a clear pathway to the level of reduction required to meet Australia’s Paris commitments.

The current Renewable Energy Target does not go beyond 2020 and national policy vis-à-vis emissions extends only to 2030, causing uncertainty for investors in an already volatile market. Clearly the report is being critical of government here as it has already argued for the primary role of government in developing policy settings to provide clarity for investment. The report also makes suggestions about shifting from coal to gas to reduce emissions at least in the short term. The report discussed three emissions reduction strategies assessed by AEMO and AEMC (Australian Energy Market Commission): an emissions intensity scheme, an extended large-scale renewable energy target, and the regulated closure of fossil-fuelled power stations. The first strategy is basically a carbon credits scheme, which was assessed as being the least costly and impactful, while an extended RET would provide greater policy stability for non-synchronous generation, so adding pressure to the existing grid system. Closure of coal-fired power stations would reduce low-cost supply in the short to medium term. Base load supply would be problematic in that scenario, so management of closures would be the key issue.

Chapter 4 looks at how VRE might be integrated into the system. It gets a bit technical here, but the issues are clear enough – VRE will be an increasing part of the energy mix, considerably so if Australia’s Large-scale renewable energy target is to be met, along with our international commitment vis-a-vis the Paris Agreement. However, VRE cannot provide spinning inertia or frequency control, according to the report. Basically this means that they cannot provide base load power, at a time when coal-fired power stations are closing down (nine have closed since 2012) and eastern states gas is being largely exported. The Hazelwood brown coal power station, Australia’s largest, and one of the most carbon intensive power stations in the world, will cease operation by April next year.

The difficulty with non-synchronous, distributed, intermittent and variable energy generation (e.g. wind and solar PV) is that these terms seem to be euphemisms for ‘not effing reliable’ in terms of base load, a problem currently being encountered in South Australia and likely to spread to other regions. The report identifies frequency control as a high priority challenge.

Frequency is a measure of the instantaneous balance of power supply and demand. To avoid damage to or failure of the power system the frequency may only deviate within a narrow range below or above 50 Hertz, as prescribed in the frequency operating standards for the NEM.

It’s likely that this narrow range of frequency proved a problem for South Australia when it suffered a blackout in September. I’ll look at what the report has to say about that blackout next time.

national electricity consumption - apparently on the rise again?

national electricity consumption – apparently on the rise again?

Written by stewart henderson

December 22, 2016 at 7:15 pm

our planet home – arctic sea ice is diminishing

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Records of Arctic sea ice have been regularly kept since 1980 or so, and there’s been some satellite mapping since the late seventies. The sea ice starts its growth in autumn, reaching its greatest extent at the end of the northern winter. This year has been unusual – after a more rapid freeze-up than usual in September, the growth of ice has slowed substantially, and by the end of October the sea ice extent had reached a new record low for this thirty-five year period. Two principal causes of this slow growth were the high surface temperatures in open waters of the arctic region, as well as high air temperatures. The USA’s National Snow and Ice Data Center (NSIDC) provides lots of useful information on the issue and does its best to explain the complex local and general factors driving arctic ice formation and melting.

Arctic sea ice is ice that forms and deforms in the ocean rather than on land, so it doesn’t include icebergs or glaciers. It’s covered in snow most of the year, and its bright surface reflects 80% of sunlight back into space, whereas melted ocean water absorbs 90% of sunlight, causing a positive feedback loop, an acceleration of global warming effects. The term used to describe the whiteness or reflectivity of a surface is albedo. For our planet, albedo is affected primarily by ice and cloud cover.

While it may be that we’ll record the lowest ice maximum ‘on record’ by the end of this winter, we should recall that thirty-odd years isn’t much of a period in geological terms. Nor does melting sea ice substantially affect sea level rise, unlike melting ice sheets and glaciers. The main concern is this change in albedo, and its effect on ocean temperatures, which will not only effect ocean life in the region but also the melting of frozen coastal regions, and weather conditions, in largely unforeseeable ways.

Another issue is that ‘old sea ice’, the type that survives the annual freeze and melt cycle, has reduced substantially since records have been kept. This old ice stretched over a distance of 1.9 million square kilometres back in 1984, but this year that has reduced to about 110,000 square kilometres, according to a report from episode 592 of the SGU. This is a measure of sea ice extent, rather than volume, which would be much more difficult to measure. In any case, it’s a massive reduction in just a generation or so, but again we don’t have long-term data to tell us whether or not the planet has experienced these sorts of rapid changes before. It’s reasonable to suspect not, and that the great volumes of greenhouse gases we’ve been emitting into our atmosphere are having unprecedented effects, but we can’t be sure. In any case, our activities are certainly affecting our planet home, and theatening island and coastal populations around the globe. As mentioned, the warming of the oceans, and of the atmosphere above them, affects the polar jet stream and can have knock-on effects world-wide. The rise in sea level is generally the effect most human populations are concerned with, though the most wealthy residents of low-lying areas seem breezily unconcerned, as this podcast episode from climate one, discussing the response of residents in the San Francisco Bay area, clearly shows.

Arguably though, it’s not so much complacency as bewilderment that’s hampering responses. Projections of sea-level rise are notoriously varied, in keeping with the enormous complexity of the interacting effects of warming. We’re on much safer ground when making observations of past effects than when predicting future ones, and even then it’s tricky, because we don’t have direct measurements beyond a fairly recent time period. It’s generally agreed that the oceans have risen by about 15-20 cm in the last century, but predictions of the rise over the next thirty-odd years to mid-century vary wildly, with climate scientists bickering over the damage such varied estimates is wreaking on their profession.

So what is to be done? Allowing our bewilderment to inhibit all action is obviously counter-productive. We should continue to monitor, model and project, and to speed up the process of reducing greenhouse gas emissions, with smart solutions to our energy needs as well as ways of minimising those needs, while considering matters of equity and opportunity re developing and developed regions. And we should continue to pressure and push our politicians towards promoting these reductions and solutions.

Written by stewart henderson

November 24, 2016 at 7:12 am