The future of energy generation and storage

[Smurf1976]

I certainly hope this rapid shift from coal generation, has some upside

I'm pretty sure that every generator still in business can see an upside.

1. Wait for a hot day. Going to happen sometime surely.

2. Put the price up.

Nothing more to it really and have no doubt that's exactly what's going to happen.

 

[sptrawler]

The funny thing is, the Government of the day, got the ball rolling, now it is out of control.
Amazing how history repeats, we never seem to do well, with World leading ideology.
But it really doesn't matter, we have moved on to marriage equality and some 18c thing, but we haven't lost focus on married at first shag, or I'm not gay I just speak funny, or get me out of the jungle, I have creeping heat rash.
It is just great to see, we have all the real issues, front and centre.
Everyone thinks Trumps America is a joke, they should see the fiasco we're running.
If anything is going to burst the housing bubble, it will be energy bills. IMO

W.A's new Labor Government has said, the public has to pay for the real cost of electricity, that's interesting because the seperation of generation and distribution that they enacted last time in office, caused a lot of extra costs.
Hope they do a better job this time.
But cancelling a road, that will have to be put in anyway, doesn't bode well for their intelligence.

 

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My Web Host, VentraIP Australia, has started a unique PowerDown™ scheme that transfers sufficient power from their servers in Melbourne and Sydney to safeguard South Australia's needs for years to come. This is their announcemen:

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“We’ve done the math and have discovered that by simply shutting down our servers from 10pm until 6am every day for the next 12 months, we’ll have donated enough electricity to power all of South Australia for the coming decade!”

“The PowerDown™ campaign is an opportunity for VentraIP Australia to once again lend a hand to the local community and help those who really need it. We’re aiming to transport a whopping total of 1.0417 gigawatts from our Sydney and Melbourne NextDC data centres direct to SA. That’s a whole lot of power!”

Mr. Giuffrida said that with the final stage of the project complete, he is confident that the PowerDown™ scheme will be a great success.

“The completion of the Ventrasaurusmobile was the final stepping stone in getting the PowerDown™ campaign online. Our first shutdown event will begin at 10:59pm this Saturday. We can’t wait!”

 

[SirRumpole]

My Web Host, VentraIP Australia, has started a unique PowerDown™ scheme that transfers sufficient power from their servers in Melbourne and Sydney to safeguard South Australia's needs for years to come. This is their announcemen:

It's not April 1 yet !

 

[pixel]

It's not April 1 yet !

They give an early warning
That's why they're Leaders in their field

 

[SirRumpole]

No guarantees there won't be blackouts next summer.



Summer power blackout warning as Hazelwood, other coal power stations close their doors



http://www.abc.net.au/news/2017-03-...for-blackout-risk-as-hazelwood-closes/8402446

 

[Smurf1976]

1.0417 GWh = enough to run SA for about 40 minutes typically or about 18 minutes at the peak.

Peaks generally aren't that high on April Fool's Day however....

 

[bellenuit]

It's not April 1 yet !

Apparently all the states (with WA being the only dissenter) have come up with a scheme that requires all power generated to be put into a common grid and to be allocated in the same ratio as their GST distribution. So for every MW that WA generates, they will be returned 350KW.

In a joint statement, the non-wa states have said that since WA's financial needs to drive economic activity is 35 cents in the dollar of GST collected (as determined by them), it goes without saying that their power requirements should be in the same proportion.

 

[Smurf1976]

No guarantees there won't be blackouts next summer.

From the article linked:

"AEMO chief operating officer Mike Cleary said it hoped to prop up the system with reserves from Pelican Point, which is coming back online in July, and power stations in Swanbank, Queensland and the Tamar Valley in Tasmania."

Now I'm getting worried.

Pelican Point is located in Adelaide and will certainly help the situation in Vic and SA, no argument there.

Swanbank is in Qld, not far from Brisbane, and I'd love to see how someone's going to get that power into Vic or SA given that the only possible route (presently existing) is NSW to Vic via the Snowy and those lines being fully loaded is already factored into calculations which show a supply shortfall. You can't put electricity onto a truck and drive it from Brisbane to Melbourne, you need transmission lines for that and they're already maxed out.

Tamar Valley is in Tasmania and I'll put it this way. Hydro Tas has no problem fully loading Basslink (Vic - Tas) during times of peak demand in Vic and SA since that coincides with low demand in Tasmania (peak demand in Tas being driven by cold weather and heating loads versus hot weather driving the peak in Vic and SA).

Running generation at Tamar Valley serves a purpose for either economic reasons (simply makes a profit by changing the balance of exports and imports over Basslink, a situation which depends on the gas price and the power price in Vic), to conserve water in Tasmanian dams or during hydro plant outages BUT it does absolutely nothing to increase the capacity of transmission Tas to Vic.

Hypothetically if there's 300 MW of unused hydro plant in Tas during the Vic / SA peak with Basslink running at maximum, and that's a fairly typical situation, then running Tamar Valley simply displaces some of that hydro generation, it does nothing to increase supply to Vic. Suffice to say that Hydro Tas already does that when it makes physical or commercial sense (eg has been done for the past 3 months, purely for commercial reasons in this case) to do so and if AEMO thinks we can just fire up Tamar Valley and send extra power to Vic then they're in for a big surprise.

Technical details of relevant plant:

Swanbank E = 385 MW combined cycle gas turbine located in SE Qld near Ipswich (not far from Brisbane). Plant is presently mothballed for economic reasons. Fuel is natural gas.

Tamar Valley comprises 5 generating units as followed, all located at Bell Bay (near George Town, about 45km north of Launceston).

208 MW combined cycle gas turbine. Fuel is natural gas only.

58 MW open cycle gas turbine. Fairly modern (2010) and efficient so far as OCGT's go. Fuel is either natural gas or diesel (gas is the normal fuel in practice but yes the diesel firing capability is routinely tested in case it's needed).

3 x 40 MW open cycle gas turbines. Part of the Tamar Valley station but officially known as Bell Bay Three (with reference to the former Bell Bay power station units 1 & 2 which are now decommissioned). Old and less efficient than other plant at Tamar Valley but significant $ has been spent in recent months to refurbish them and improve reliability as a backup source of generation if required. Fuel is either gas or diesel same as with the 58 MW unit.

Historic but no longer operating at these sites:

Swanbank A (coal, 396 MW), Swanbank B (coal, 480 MW), Swanbank C and D (oil-fired gas turbines, small but can't remember the exact capacity).

Bell Bay units 1 & 2 (oil-fired steam turbines, 120 MW each, later converted to gas).

 

[basilio]

With the closure of Hazelwood and the heightened risk of blackouts energy storage technology is going to need a kick along.
Good analysis here on the current state of play.

Salt, silicon or graphite: energy storage goes beyond lithium ion batteries
Technologies that use gels, liquids, and molten silicon or salt could all claim a slice of the growing renewable energy storage market

Comments
12
Dyani Lewis


@dyanilewis

Thursday 6 April 2017 09.47 AEST Last modified on Thursday 6 April 2017 10.21 AEST

Between the political bickering following a spate of blackouts in South Australia and the billionaire entrepreneur Elon Musk tweeting that he had a fix, and then the South Australian government announcing that it will build a grid-connected battery storage facility, interest in renewable energy storage has never been higher.

While lithium ion batteries sold by Tesla and others are perhaps the most widely known storage technology, several other energy storage options are either already on the market, or are fast making their way there.

All are hoping to claim a slice of what, by all indications, will be a very large pie. The Australian Energy Market Operator forecasts that more than 1.1m new battery storage systems will be installed in Australian households by 2035. And, according to a 2015 report by the Climate Council, battery storage capacity is expected to grow 50-fold in under a decade.

“The market for storage is huge,” says Kevin Moriarty, the executive chairman of 1414 Degrees, an Adelaide-based thermal storage company hoping to win South Australia’s 100MW storage system tender. The South Australian system will be the largest in Australia so far but Moriarty describes it as “a drop in the ocean” compared with what will be needed as Australia transitions away from carbon-dioxide emitting fossil fuels.

https://www.theguardian.com/sustain...rgy-storage-goes-beyond-lithium-ion-batteries

 

[SirRumpole]

Is electricity price re-regulation a valid option ?

http://www.abc.net.au/news/2017-04-...es-could-be-reregulated-watchdog-says/8435472

 

[Smurf1976]

Is electricity price re-regulation a valid option ?

A few thoughts:

Prices are getting a bit out of hand really.

Average for Vic 2014-15 = $30.35 and for 2015 -16 = $46.14

Past week we're seeing daily averages between $90.88 and $140.99 and that's despite seasonally low demand due to mild weather. Today around $200 during the peak. Tomorrow forecast to be a minimum of $96.50 at the far off-peak period and $150 - $200 during most of the normal business working hours.

Now factor in higher demand when it gets colder. Basic supply and demand there as with any market = price goes up further.

Now consider what happens if there are major plant outages (will be sometime, things break and/or need maintenance). Lower supply = higher price.

Then there's the question about gas supply adequacy to run the increased level of gas-fired generation during winter. Gas price may well go up or become physically scarce particularly in Vic and SA. Hold onto your hats if that happens.

My personal view is that we've seen a "crisis" with physical supply and reliability in SA but the next problem is going to be price. It's only a matter of time until these higher wholesale prices flow through to households and business users. That's not going to go down well politically, it's a disaster for those on low incomes and no doubt many businesses, and it won't help the broader economy as households divert $ away from discretionary spending into paying power bills.

Regulation?

The first problem there is that no retailer is going to sell at a loss and that there's nothing compelling the retailers to sell at all if they choose not to. Looking at those active in Victoria, AGL, Origin and Energy Australia are all either privately owned or owned by foreign governments. Momentum is owned by another state government (Tas). The smaller retailers are all privately owned. Lumo and Red are offshoots of Snowy Hydro and that's the only involvement the Victorian government has via their 29% ownership of Snowy.

So if the Vic government is going to regulate prices then it's going to have to do it in a manner that is still profitable for retailers otherwise they can and will simply walk away. So it's a bit like regulating anything, they could tinker around the edges but ultimately the price still has to be profitable. A 5% drop maybe, 50% no chance.

At a broader economic level the soaring cost of power isn't going to be good that's for sure.

 

[basilio]

Smurf how much does the wholesale price of electricity actually impact on final consumer prices ? For example if the wholesale price is $50 (Per what ?) and doubles to $100 how much extra per Kwhr does that the extra $50 represent in raw terms ?

Thanks

 

[Smurf1976]

Electricity is traded in the market in MWh (megawatt hours) whilst at home you will normally be charged on the basis of kWh (kilowatt hours) plus a fixed daily supply fee.

There are exactly 1000 kWh per 1 MWh.

A complexity is transmission and distribution losses. Not all electricity that comes out of power stations actually makes it to consumers, some being lost in the lines as heat. It's less than many seem to think, not much is lost in transmission (big power lines usually on steel towers) but at the local distribution level (lines on poles beside the road or underground) the losses are generally higher due to the lower voltages used.

As a general ballpark figure, loss from the power station to your home is about 10%. That will vary a lot with location - less in the CBD of a city, considerably more in the middle of nowhere but on average it's around 10%. For heavy industry directly connected to the transmission network it's less than half that.

Then there's also GST to consider, that being applied to consumers bills but not included in the wholesale prices I've referred to.

An increase in wholesale prices of $50 per MWh would thus add about 6 cents / kWh to household and small (in power consumption terms) business electricity prices including GST.

As for the significance of that, prices vary hugely across the country, between retailers and network owners and so on. I'm aware of residential retail prices ranging from 11 to 50 cents / kWh but for most it will be in the high teens to 30 cents range.

So if we take 24 cents / kWh for flat rate (same price 24/7/365 - not "Time Of Use" metering as used in some areas) then a rise of $60 per MWh at the wholesale level is about a 30% increase in unit rates for household consumption. Actual bills would rise by a lesser amount since fixed supply costs won't increase by the same amount.

Where it gets complex is that different retailers, particularly those who are owned by generators, will likely pursue different strategies for commercial / marketing reasons whereas the smaller players who are retailers only don't have that option, at least not unless they can afford to burn cash, beyond the duration of their current hedging contracts.

So it's probable that some retailers will take the hit where customers are willing to sign long contracts. Others might go down the route of rewarding their existing customers with a delay in price rises. And so on, they'll all likely pursue at least slightly different strategies for marketing reasons.

All this does vary a lot depending on usage and circumstances. There are some for whom, if the wholesale prices are fully passed through, will be looking at price rises in the order of 100%.

 

[basilio]

Excellent!! Thanks for that. It's good to get a clearer idea of how the wholesale price is reflected in the final bill

 

[Smurf1976]

Excellent!! Thanks for that. It's good to get a clearer idea of how the wholesale price is reflected in the final bill

No worries.

Where the complexity does arise though is how the retailers will respond and that is particularly so for those who also own generation.

AGL, Origin Energy, Energy Australia are all involved with both generation and retail. Same with Red and Lumo (Snowy Hydro) and Momentum (Hydro Tas) and others. That compares with some others who are either in retail or generation only but not both.

So the market price in Victoria might have gone from $46 to over $100 but there's nothing to stop AGL etc doing some internal accounting and selling their own generation output into their own retail business at a lower price if they want to. That would cost them money "on paper" but they'd be looking at an overall business strategy and deciding what their approach is. Same with all the others.

One issue is that generation hasn't been particularly profitable in the past. A lot has been said about "gold plating" and associated profits but that's in the networks whereas the reverse is true so far as generation is concerned. No gold sitting around in power stations that's for sure indeed some are in very bad shape (Hazelwood sure isn't the only one falling apart).

So that's why, among others, Snowy and Hydro Tas both decided they needed to get into retail. With the big 3 (AGL, Origin, Energy Australia) already integrated and with not a lot of $ being made just generating it was the most rational way to reduce business risk to sell directly to the public.

I don't know the details of the others but certainly Hydro Tas has a very substantial chunk of generation sold under contract either to Aurora Energy (a separate Tas Government owned energy retailer), its own retailer Momentum and directly to heavy industry.

There are also quite a lot of financial deals between generators. It's no secret in the industry that Snowy Hydro in particular has a lot of arrangements in place with the big private generators and retailers. Plus they'd obviously have internal arrangements with their own retail operations.

So it's all a bit like banks and interest rates. The RBA could put rates up 1% but it's up to the banks to decide what they actually do in terms of their relationship with customers. Some may just pass it straight through whilst others might get a bit creative if they think they can gain customers or profits that way.

 

[sptrawler]

At least the media are starting to get their heads around the real issues surrounding energy costs.

http://www.abc.net.au/news/2017-04-13/australia-faces-risk-of-recession-minack/8440570

Not only will the rising cost of energy stop investment, it will increase the cost of living, at a time when unemployment is rising and wages are falling.
How the hell did it get to this?
Politically motivated lunacy. IMO

 

[basilio]

Hmnn SPtrawler. Not quite sure what you mean by politically motivated lunacy in the context of this topic.
The overall picture which Smurf details exceptionally well notes that most of our coal fired base load power stations are nearing the end of their life and have been effectively worked to death. There is no economical prospect of renovating/restoring them so they will be closed down.
In terms of replacing this base load power solar and wind technologies are now more cost competitive. They just need the addition of some storage facility, pumped hyro- , battery banks whatever, to ensure stability of supply.
The big issue I think your referring to is the government decision to allow our national gas supplies to be sold overseas enmasse and the consequent exceptionally steep increase in gas. This will cruel gas fired generators and, as you point out, have a massive effect on energy intensive industries.
Cheers

 

[basilio]

Good story on the fundamental changes to Australian manufacturing and movement to renewable energy.

Renewables roadshow: how Broken Hill went from mining to drag queens and solar farms
The home of BHP and Mad Max can now take credit for kickstarting the large-scale solar industry in Australia

........
Broken Hill gave birth to one of the least renewable industries on Earth, but it can now claim to be the Australian birthplace of one of the most renewable.

On the outskirts of the city lies a solar farm that covers an area equivalent to 75 Sydney Cricket Grounds. Built by AGL, the 53MW Broken Hill solar plant is one of two solar farms (the other 102MW one is in Nyngan) built in outback New South Wales at the same time. Adam Mackett from AGL, who was the project manager for the Broken Hill plant, credits these farms with kickstarting the large-scale solar industry in Australia.

Officially opened in January 2016, the plants were built with subsidies from the federal government through the Australian Renewable Energy Agency (Arena), as well as support from the NSW government.

With that funding, AGL was able to jump into the large-scale solar industry, and in doing so, create a supply chain that is bringing down the cost of solar farms around the country.

For example, Mackett says a manufacturing plant in the struggling car industry retooled to provide the frames for the solar panels, and is now able to do that for the whole industry.

“That was something [the plant] didn’t previously do,” Mackett says. “You can imagine they’ve learned a lot about that. And as they learn, they become more efficient and that brings the costs down.”


And come down it did. Government subsidies of about $1.50 per watt were needed to get the Broken Hill and Nyngan plants up and running. Last year that fell to just 19c per watt, and construction costs have fallen by about 40%. By kickstarting the industry, supply chains were built and the large-scale solar businesses became “de-risked”, making the cost of capital cheaper for subsequent projects.

Unsurprisingly, Makett loves the big Broken Hill solar farm. Travelling through the city, we find locals seem to love it too. Big companies sometimes have trouble convincing communities these projects are worthwhile – but not so in Broken Hill.

The deputy mayor, David Gallagher, says: “I’d love to have Broken Hill, being the first iconic heritage-listed city, [also be] the most [successful] renewable energy city in Australia. I believe we can do that – I believe we can go forward.”

 

[Smurf1976]

The overall picture which Smurf details exceptionally well notes that most of our coal fired base load power stations are nearing the end of their life and have been effectively worked to death. There is no economical prospect of renovating/restoring them so they will be closed down.

It's a bit like a car.

If it's a 5 year old car and the engine brakes then it's sensible and worthwhile to repair or if necessary replace the engine since the rest of the car is still in good condition with many years of useful life remaining.

But if the car's 25 years old then it's just silly to spend any significant $ on repairs hence why most old cars are scrapped once something significant needs fixing. Reason being that you could spend $$$ on a new engine and then a month later you've got problems with the gearbox. Fix that and 6 months later the diff starts making noises it shouldn't. And so on. A point comes where pretty much every part in the car is worn out and it's cheaper to replace than to try and keep it running. Only exceptions would be if you're not worried about the cost (classic cars etc) or can DIY all the work and are only paying for the actual parts but even then it gets marginal eventually.

By virtue of operating at high temperature and pressure coal-fired plants do suffer degradation which starts on day 1 of operation. After a few decades it all ends up worn out and it's either spend big $ or close. If you don't see a long term future in it then as an owner you close it rather than spending the $.

It's the same with gas and due to technological improvement with gas-fired generation being greater than with coal there's even less incentive to refurbish an old plant. It's no secret that Torrens Island, by far the largest power station in SA (it's about half the state's non-intermittent generation so hugely significant) is getting *very* tired and having a lot of problems with things failing.

Hydro does have an inherently long life, that it doesn't involve high temperatures and runs at a much slower speed is a big factor there, but it still needs regular maintenance and a few bits and pieces replaced due to mechanical wear, corrosion and so on. Even things like canals need cleaning if algae growth becomes a problem and restricts the water flow (yes it does matter since it cuts the flow more than you'd expect). It's quite a task to scrub clean a 20 km long canal: