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the ACCC, coal, renewables, arguments, and the future

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Well as I watch my readership reduce to almost zero in its usual ups and downs I wonder whether to write just for myself or to attract a readership, so I’ll just go ahead and write, but I was amused to listen to Senator Matt Canavan, our Minister for Resources and a member of the Nationals, responding to the ACCC’s recommendations for bringing energy prices down. At one point he remarked ‘who cares where we get our fuel from?’, and compared the different fuel varieties to different types of ice-cream in a sweet shop. Presumably he was referring to encouraging an energy mix, but for someone who presumably knows something about resources, since he holds that portfolio (though that’s hardly ever proof of expertise in government), it struck me as bizarre. Who cares where we get our fuel from or what type it is? The Chinese government cares, for one. It has worked hard in recent years to combat pollution in Beijing, largely  in response to adverse publicity. China’s capital, ranked as the fifth most polluted city in China in 2011, has since dropped out of the top twenty, largely due to the adoption of cleaner, greener energy and technology. Unfortunately, many other cities in China’s highly populated and industrialised north-western region still suffer from an environment which has reduced life expectancy there by some 5.5 years, according to a joint study by Chinese and American university teams in 2013. This sadly suggests that the Chinese government appears to be more concerned with its international image than with protecting its own citizens from hazardous emissions. On the bright side, Beijing’s improvement indicates what can be done to improve environments when governments and industry get their act together.

Just as oils aint oils, fuels aren’t just fuels. Remember kerosene? I remember huddling over a kerosene heater in the seventies, along with student housemates. But in other parts, kero isn’t a past-tense energy source. In many of the poorest countries, particularly in Africa, it’s used for lighting, even though it’s toxic, causes frequent burns and fires, and produces inferior light. It has proved difficult to wean consumers from kerosene in these countries, even though there are potentially cheaper options available. There’s an interesting article about the problems and possible solutions here.

But really, since energy generation (i.e. using x,y, or z as fuel) is the number one cause of air pollution and global warming emissions, it’s not like comparing caramel praline with black raspberry crunch. Coal is of course the worst in terms of emissions. As of 2016, some 44% of US electricity comes from coal, but it accounts for 80% of that country’s power plant carbon emissions. Australia has great reserves of coal, but it exports much of it to China and, more recently, South-East Asia. In fact Australia has experienced a recent boom in coal exports, earning a record $56.5 billion in 2017. Unsurprisingly many conservative pollies are clamouring for more coal mines and more local use of the resource as a solution to our seemingly ever-rising energy costs. Maybe we too can pull out of the Paris Agreement? Of course, our massive coal exports do tend to undermine that agreement, while the government can congratulate itself on keeping domestic use within more or less acceptable limits (see graph above). Currently, we’re the largest coal exporter and the third largest exporter of carbon pollution in the world, behind Saudi Arabia and Russia. But of course it’s not our fault that other countries want to pollute with our resources, is it? We just take the money and keep our country clean (as do Norway, Denmark and Indonesia).

So considering our dubious status in terms of global emissions (but, as many experts point out, it’s a little arrogant to expect developing and transitioning countries like China, our biggest coal customer, to rapidly abandon a fuel that the developed world has used for so long, thereby gaining ascendancy), it’s interesting to note that AGL, Australia’s largest owner of coal fired power stations and biggest emitter of carbon dioxide, is continuing its push away from coal in spite of government pressure. Of course the government itself is divided on this, with Turnbull and Frydenberg largely at odds with the Nationals on the question of transition, but looking into the future, it seems inevitable that demand for coal will decline – the only question is the rate of that decline, which of course depends on how quickly other nations move away from coal. All of those nations have signed the Paris Agreement. Already, coal ports such as Newcastle, and Australia’s mining regions, are looking to diversify, and energy experts are debating the pursuance of a coal tax to support the industry as it transitions.

But Canavan and the Nationals are having none of this. They point to the above-mentioned boom and a currently accelerating demand, though Canavan is realistic enough to admit that future forecasts are reliably unreliable. Much will depend on cost declines and advancing technology in renewables, as well as various political scenarios.

Naturally the renewable energy sector is looking critically at what one of its experts calls the ‘series of scattershot proposals’ by the ACCC on reducing our electricity costs. The ACCC’s recommendation that the small-scale renewable energy scheme (SRES), a subsidy which mainly applies to rooftop solar, should be wound down, is seen as unfair if not counter-productive by the sector. The SRES is already slated to be wound down by 2030, and its earlier abolition (by 2021, according to ACCC recommendations) would mainly affect low-income and rental householders. There’s currently a new boom in rooftop solar, with rising energy costs being the main cause. So penalising future adopters of rooftop solar seems an odd way to reduce the problems they’re adopting solar to avoid. As to the possibility of new gas- or coal-fired power plants, a dream of the Nationals and renegade ultra-conservative Tony Abbott, that’s unlikely, considering changing public attitudes and the reasonable likelihood of a change of federal government by next year. The good thing about the ACCC’s analysis is that the behaviour of retailers, and the phenomenon of price gouging, have finally been criticised, and the idea of states writing down the value of their networks has been floated. Consumers shouldn’t have to bear the burden of extra energy infrastructure and errors in predicting future energy demand.

There have been many interesting responses to the report, to say the least. Danny Price, a leading analyst of the national energy market over three decades, regards the report as overly political in that it shies away from criticising the lack of a much-needed bipartisan approach to energy policy. Confusion and ideological squabbling over carbon pricing – the disastrous scrapping by the Abbott government of a carefully formulated carbon tax being the low point – has been a disincentive to major investment, and banks here are refusing to finance new coal-fired power stations, which would only be built via massive government subsidies. Consequently we’ve seen an upsurge in interest in renewables from consumers and business, which also reflects worldwide growth, with major oil companies like BP joining the fray.

Of course the problem of reliable back-up power remains, and analyst Ian Verrender has criticised the ACCC report for omitting his best solution – gas. Gas turbines are more flexible than coal generators as well as producing fewer emissions. Australia is a major exporter of gas, but our companies have been providing little for domestic consumption, a situation which was only partly remedied by recent federal intervention. Yet the Nationals are more interested in coal than gas, in spite of its many problems, and its inefficiencies in providing precise back-up supply. Gas, hydro and batteries are far more efficient in this respect.

A recent study by the Australian Energy Market Operator (AEMO) has also backed renewables (though apparently the current federal government isn’t listening). It has released its Integrated Systems Plan, reported on here by Giles Parkinson:

Based on its “neutral” scenario, which comprises existing federal and state government policies, the lowest cost replacement [for retiring coal-fired suppliers] will be solar (28GW), wind (10.5GW) and storage (17GW and 90GWh). Just 500MW of flexible gas plant will be needed, and no new coal. It says this portfolio in total can produce 90TWh (net) of energy per annum, more than offsetting the energy lost from retiring coal fired generation.

AEMO has also highlighted the need for new transmission infrastructure, as transformative and disruptive energy developments continue around the country. The need for forward planning should be obvious and governments – especially the federal government – ignore this at their peril. A change of federal government may be the answer, but only if the incoming government has a thorough-going plan to integrate and manage this clear and obvious national move away from fossil fuels. Such plans are already being drawn up – we just need the will, and some bipartisan support, to implement them.

 

 

 

 

Written by stewart henderson

July 17, 2018 at 5:01 pm

Posted in ACCC, gas

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our recent power outage – how to prevent a recurrence. part 2

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dispatchable solar energy to local areas - a possible solution

dispatchable solar energy to local areas – a possible solution

Jacinta: So the problem is, or was, that the whole state of South Australia was left without power for a long period of time – more than 24 hours in some places, it varied between regions. This affected some 1.7 million people, endangering lives in some instances.

Canto: And how did it come to be a problem? First because of storm conditions, particularly north of Adelaide, described as unprecedented. This might be seen as the proximate cause, with many describing the ultimate cause as anthropogenic global warming, which will see conditions such as these arising more often.

Jacinta: Well another cause, whether proximate or ultimate, might be degraded transmission infrastructure – the big towers. The transmission network, which is operated and managed by ElectraNet, is the long-distance network, carrying power to the distribution network – the poles and wires – which connects homes and businesses. The distribution network is owned and managed by SA Power Networks, which is 51%  owned by Cheung Kong Infrastructure/Power Assets (CKI), a Hong Kong Chinese company. But it’s ElecraNet that we need to focus on. It’s apparently owned by a consortium of companies, but the largest share is 46.5%, owned by China’s State Grid Corporation (SGCC), the largest electric utility company in the world. I’ve heard rumours that there were complaints by technicians regarding rusty and poorly-maintained towers, complaints dating back over five years, but I’ve found nothing as yet to confirm those rumours.

Canto: So overseas ownership may feature in answering the question of how this came to be a problem. Another factor might be the interconnectors.

Jacinta: Yes, to be clear, there are two interconnectors between SA and Victoria, with some speculation about a third being built connecting us to NSW, and allowing us to export our renewables-based energy to that state from time to time…

Canto: Can you describe what an interconnector actually is, and how it works? I’ve heard that they actually work as surge protectors, among other things, shutting down the system when it’s overloaded or in crisis.

Jacinta: It connects transmission systems between different states, or different countries, allowing states to import or export power according to differential capabilities at different times, which helps stabilise or standardise the power available to interconnected states or regions. I should point out that SA imports far more power than it exports, so we are reliant on the national electricity grid, as we always have been I think, for regular, stable supply. Apparently, in terms of area, this is the largest electricity grid in the world. In 2013-2014 SA’s import to export ratio was 6 to 1.  If you look at the chart on the SA government website, you’ll notice that SA generates less power within its borders than any other state, including Tasmania, which gets most of its power from hydro. But this varies – not long ago, when Tasmanian dams were low, that state was the least productive. The two interconnectors to Victoria are the Heywood interconnector, with a 460MW capacity, and the smaller Murray Link, which was not operational at the time of the storm. An ABC article quotes the SA Premier as saying the interconnector ‘played no role in the blackout’, but the same article quotes Paul Roberts of SA Power Networks: “We believe — and this is only early information — that there may have been some issue with the interconnector but the state’s power system is shut down I think possibly as a protection”. This statement is vague – it tends to contradict the Premier, but it doesn’t say that the interconnector had a direct role in the statewide shut-down.

Canto: Sounds like people are being cagey and defensive right from the start.

Jacinta: Well, of course – avoiding blame here is a big thing, in terms of money as well as reputation. It’s probably being overly naive to assume that nobody really knows whether the shut-down was caused by the interconnector, or whether that shut-down, if caused by the interconnector, was absolutely necessary. But it looks like nobody’s going to admit knowledge.

Canto: So the problem may or may not have been related to the interconnector, but it was definitely caused by a major storm north of Adelaide, which may or may not have been due to anthropogenic global warming, and it caused damage to infrastructure which may or may not have been avoided if that infrastructure was being upgraded effectively by ElectraNet. Sounds like we’re getting nowhere fast.

Jacinta: What about this idea that the state’s relying too much on renewables. What evidence is there about that?

Canto: Well, unsurprisingly, the state’s opposition leaders and their fellow-travellers are lining up to score points out of this event. SA’s conservative party leader Steven Marshall says there should be an investigation into the state’s ‘lack of base-load power generation’, the Prime Minister, Malcolm Turnbull, who now heads a conservative government in spite of having been a long-time advocate of renewables, has ‘rebuked’ state labor governments for having ‘ideological’ renewable energy targets, and the populist MP Nick Xenophon has expressed a rather vague but passionate outrage.

Jacinta: Okay so let’s look first at SA’s lack of base-load power generation. Hasn’t this been a perennial problem for SA? As I’ve already said, we’ve been importing a lot of power from interstate, on a variable basis, really since the year dot. Or since we’ve been able to do so, via the interconnectors.

Canto: Well there’s something of a new mantra among the renewable advocates that the base-load concept is out-dated, but I’d rather not get into that now, I’m really a novice about electricity markets and grids and such. The fact is that SA is running neck-and-neck with Tasmania as the state that produces the least electricity in the nation, though of course SA is a much bigger state. It’s just that now we’re generating more from wind, so we’ve shut off our coal generators. So the argument will be that renewables had nothing to do with the outage, which damaged transmission lines and initiated a shut-down of our only operating interconnector. This would’ve happened regardless of the power source, though there may be questions about the interconnector, and about the maintenance of the transmission lines.

Jacinta: Okay, that’ll do, though I’d like us to discuss the whole topic of renewable energy, in SA and elsewhere, on an ongoing basis in the future. It’s a hot topic, with a lot of people implacably opposed to it, particularly readers of the rather reactionary Australian newspaper, apparently. All very amusing. And perhaps we can educate ourselves a bit more about the National Electricity Market (NEM), the Australian Energy Market Operator (AEMO) and the future of grids and off-grid electricity supply.

For more interesting articles on this issue:

http://www.smh.com.au/business/energy/sa-power-outage-caused-by-cascading-series-of-events-20161004-grv29c.html

http://www.adelaidenow.com.au/news/opinion/sam-johnson-solar-power-must-be-provided-to-regional-centres-such-as-port-augusta-to-provide-electricity-security/news-story/4ffcdfeb9fc35ef3f8cbfe0eea1c9bdc

http://www.abc.net.au/news/2016-10-06/appalling-management-to-blame-for-prolonged-black-out-in-sa/7908032

 

Written by stewart henderson

October 15, 2016 at 5:15 pm

Our recent power outage – how to prevent a recurrence. part 1 – preliminary remarks

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transmission-towers

Canto: So we’re tasked with solving the problem or problems in SA’s energy system.

Jacinta: We are? What problem? Or should I say crisis, what crisis?

Canto: That’s a good question Jass, because as you know the first step in finding a solution is to define the problem.

Jacinta: Yes I knew that. So we’re talking about how all the power died for a period of – what, 24 hours or so, statewide here in South Africa.

Canto: South Australia, don’t confuse our international readers. So I’ve heard the crisis framed in a number of different ways. First, in terms of the SA government’s irresponsible, unrealistic go-it-alone pursuit of risky renewable energy. Second, in the more or less opposite terms of other states’ and especially the federal govt’s foot-dragging and negative approach to said energy, leaving SA unsupported. Third, in terms of privatisation – a number of electrical pylons fell down like ninepins in the outback, because, it’s claimed, the private owners are pursuing profits over infrastructure maintenance. And a fourth and most comprehensive framing invokes climate change itself – SA was subjected to an unprecedented weather event likely caused by the emissions our gallant state government is trying to reduce..

Jacinta: And our little Torrens River has been torrenting like the mighty Amazon.

Canto: Yeah right. So with all these and more framings of the problem, it looks like we’ll have to spend a few posts on this issue.

Jacinta: Or a lifetime. But yes let’s try to be thorough. And positive. I thought we might start with the 9-point plan for solutions to complex problems which we found in the enlightening book The origin of feces by Stuart Waltner-Toews, and which was presented in simplified form on the Solutions OK blog.

1. What is the problem situation or issue? How did it come to be a problem?

2. Who are the stakeholders? What do they care about? Where are they coming from (motives, investments)? What are the agreements, discords among them?

3. What are the stories being told by these different stakeholders re their roles and concerns in the problem?

4. What’s our best systematic, scientific understanding of the situation/problem?

5. What’s our best understanding of the social & cultural issues to be addressed?

6. How are 4 & 5 related? How do they constrain or support each other?

7. What are the scenarios and narratives here that people most connect with? On what things can we agree on? What are the power relations between people who agree or disagree? Given these constraints and acknowledgements what do we realistically expect that we can do?

8. What course of action, governance structure and monitoring system will best enable us to implement our plans and move towards our goals?

9. Implement. Monitor. Adjust. Learn. Re-Start.

Canto: Yeah, that’s pretty comprehensive all right, maybe too comprehensive.

Jacinta: No I think it’s a good basis. Take point 1. What’s the problem? That’s easy. The problem is that SA had all its power cut for the best part of a day, and although many are saying this was a one-off, freak event, many others are saying it could happen again and that SA’s the most vulnerable state, it wouldn’t have happened to any other state.

Canto: Though I think our Premier said the exact opposite, it could’ve happened anywhere. Lots of conflicting narratives and opinions. So let’s get started.

Jacinta: Well let me first say that, whatever the cause, we are experiencing extreme weather here for October – rainy and stormy conditions which have certainly never been experienced here in a good long lifetime. And right now we’re got rain and strong wind conditions. There’s been little let-up for some time.

Canto: Interesting – we’re only a few days into October, but the average rainfall for September in Adelaide, since records have been kept, is about 58 millimetres. This year it was over 130 millimetres. October, though, might be the most interesting month for records. Certainly I can’t recall anything like this, and we have flooding in many parts of the state.

Jacinta: So we have extreme weather conditions, and the direct cause of the outage, according to our Premier, was freak weather conditions north of Adelaide, including two tornados which knocked over transmission towers near Melrose. More than 20 transmission lines were damaged. The question being asked, of course, is how could these storms knock out the power for a whole vast state for a long period? What were the back-up arrangements?

Canto: Well the back-up apparently relies on two interconnectors to the east coast. Presumably there must be some arrangement so that when local power isn’t forthcoming, the interconnectors receive a signal to transmit. However, only one was operational at the time of the outage. Now I don’t really understand this interconnector thing and how they work. I’m not clear on why one interconnector was shut down and why the other one didn’t just do the job. Is it just a matter of ‘firing up’ an interconnector and a whole state’s lights come back on? How simple or complex is it?

Jacinta: And what, if anything, has this got to do with renewable energy and the shutting down of the coal power station in Port Augusta?

Canto: We might get to that later. I haven’t been able to find exactly how interconnectors work, and nothing much at all on interconnectors in Australia, but currently in the UK there are four interconnectors, linked to France, the Netherlands, Northern Ireland and the Republic of Ireland, of which the France one is largest, with 2GW capacity. It would be interesting to know the capacity of the two interconnectors linking us to the east, and whether that has any relevance. Anyway, these interconnectors are spruiked as providers of energy security and flexibility, so the more interconnectors the better. Maybe there’s a case for having a third interconnector, so that we’re never, or rarely reduced to having just one to rely on.

Jacinta: So why did we have no power? Why didn’t the interconnector provide it for so long? Or was it the interconnector that provided it, or was it the local system?

Canto: Well there was certainly local work going on from the start, as soon as conditions allowed, to fix local faults, but I can’t find too much info on the role of the interconnector. However, word has just come out that there’ll be a state inquiry into South Australia’s unique situation, so maybe there’s no point in us continuing this conversation.

Jacinta: Wait up, I think it might be fun speculating on and researching the matter, and then comparing our findings with the inquiry.

Canto: Which’ll come out in, what, five years?

Jacinta: An unnecessarily jaded remark. So let’s get stuck into some research, and look for solutions, always keeping in mind that 9-point plan.

 

Written by stewart henderson

October 4, 2016 at 7:54 pm