The future of energy generation and storage

[Smurf1976]

As much as Smurf knows about this industry, I doubt he could play the game any better with a deck stacked against him.

If someone handed me formal responsibility for fixing the situation then I'd be changing the cards that's for sure and doing so quite radically.

That doesn't mean nationalisation, there's no reason why private enterprise can't run this stuff, but it does mean radical change in how it's all approached. Otherwise, well if you keep doing the same or very similar things then you get the same or very similar results.

In short I'd separate the corporate stuff from the operations stuff on a day to day basis. Those in suits can go and do whatever they like so far as business is concerned but I'd disallow that to in any way obstruct efficient operation of generating plant or the grid.

It's rather silly when you've got a crisis going on at one power station and the better experienced technical workers, with virtually identical plant, just down the road aren't allowed anywhere near the place. That's the sort of thing I'd want a stop put to real quick.

 

[ghotib]

...In short I'd separate the corporate stuff from the operations stuff on a day to day basis. Those in suits can go and do whatever they like so far as business is concerned but I'd disallow that to in any way obstruct efficient operation of generating plant or the grid.

It's rather silly when you've got a crisis going on at one power station and the better experienced technical workers, with virtually identical plant, just down the road aren't allowed anywhere near the place. That's the sort of thing I'd want a stop put to real quick.

That sounds very like the way aviation works... hundreds of operators of varying levels of skill, capacity, and honesty; mandated problem reporting and a culture of open-ness (more or less) among technicians; constant tension between commercial pressures and technical best practice; an expectation that things will go wrong and constant efforts to prepare for problems. No doubt this picture is idealistic as well as sketchy, but is it a fair suggestion of how the energy system could work?

 

[Smurf1976]

Power companies were owned by the States for decades and no one complained about prices or lack of supply.

Now that they are privatised the energy sector is a disaster.

The problem is more about the concept of a competitive market than who actually owns things.

AGL has a history going back to the 1830's and is among the oldest companies of any sort in Australia. For the vast majority of that time AGL's sole function was as a monopoly gas supplier in Sydney. They ran the whole show and could simply be described as a privately owned utility.

I can't remember the company names but same arrangement in Brisbane.

In Tasmania the Launceston Gas Company operated from the 1850's as a privately owned utility comparable to AGL in Sydney. Via a series of corporate actions dating back to the 1980's the LGC ended up as what is now the very much larger company Origin Energy. For the record Origin does officially acknowledge it's historic origins going back to Launceston.

The US in particular has a long history of privately owned electricity utilities comparable to the former state authorities in Australia.

Now at this point someone's going to scream at me and say something about monopolies price gouging and so on.

In theory I take that point as it sounds like a very reasonable one.

In practice though I'm going to drop the nuclear bomb on it and point out that AGL in 2019 charges more for gas in Sydney in a competitive market than it charged the exact same customers years ago as a monopoly.

That last paragraph sums of much of where this has all gone so terribly wrong. Blind faith in economic ideology that hasn't worked in practice but which is taken so seriously that it gets in the way of doing what needs to be done.

Get away from that ideology and it all starts to become a lot easier to find way forward in all of this.

 

[SirRumpole]

According to this story, https://www.abc.net.au/news/2019-01...used-them-and-is-this-the-new-normal/10751412

"He said the National Energy Market had a "reliability standard" which allowed 36,000 customers to be without power for an entire 24 hours, or 88,000 customers to be without power for 10 hours."

So don't complain about a blackout for a couple of hours.

 

[qldfrog]

Not necessarily.
..
SP has a life work history in the power generation field around coal and gas. Why should that knowledge of working power systems be ignored ? On the other hand there is a rapidly emerging wind/solar/battery industry that has challenged the economics, reliability and diversity of historical energy suppliers. And this is still developing.

The ignore recommendation was obviously not to ignore SP but for entries which are just ideological warfare.
And while we often differ Basilio, we can agree on many points and agree to disagree on others

 

[sptrawler]

The States and Federal government should re-enter the generation & storage markets. This is being done with the SA battery and Snowy Hydro 2 and should be continued with extra government owned infrastructure that engineers advise to be the most effective long term solutions.

IMO and I know it will start another rant, you are spot on Rumpy.

The problem with electricity is it is an essential service, people want and need it.

The problem with supplying it is, you have to install a lot more than you actually need.
This is to cover the load that exist today, the load that is expected in the foreseeable future due to natural growth, expected retirement of existing plant and unavailability plant due to planned and unplanned outages.
This IMO is where the private model doesn't work, someone has to install and pay for this excess plant, that isn't required all the time.
When it was Government it wasn't an issue, new plant was installed before it was actually needed, maintenance was carried on a regular basis and plant was retired in an orderly manner.
Now we have an issue, because no private operator wants to spend money re tubing a boiler, when they may not run enough time to repay the capital outlay.
The banking sector wont lend any money to replace existing coal generation, as it is obviously on the nose.
So that leaves gas, nuclear, and renewables.
Or the Government building a new very large coal station, and retire the old stations.
This would solve a lot of the problems IMO, you have a new higher efficiency power station, that shuts down existing old unreliable plant.
The Station would put a bottom line on generation costs, as the privates would be competing against it, also it would give breathing space to give time to install the pumped hydro and renewable generation.
To meet our carbon targets, we need to cut our coal generating capacity from about 23 GW to 5.5GW.
So build the power station to 5.5GW output Government owned and start getting the privates to change over to renewables.
As the renewables increase, you just reduce production at the oldest coal fired station, untill the point you close it and blow it up.
Then when they are all blown up, you only have the Government one left, and when it is no longer required. Switch the lights off coal.
There you go, my idea, tear it to bits I won't be entering a slanging match over it.

 

[rederob]

The problem with electricity is it is an essential service, people want and need it.

True for the greater part, but the NEM can be avoided by industry and individuals nowadays by installing their own systems, eg solar PV off grid.

This IMO is where the private model doesn't work, someone has to install and pay for this excess plant, that isn't required all the time.

It's not a private model, but it's true that someone has to install and pay for this excess plant. To achieve this we have a NEM, operating under force of laws prescribed through National Electricity Rules. For those not appreciating this point:

National electricity objective
The objective of this Law is to promote efficient investment in, and efficient operation and use of, electricity services for the long term interests of consumers of electricity with respect to—

(a) price, quality, safety, reliability and security of supply of electricity; and
(b) the reliability, safety and security of the national electricity system.​

The singular failure of the NEM is evidenced by Smurf's advice that the only entities presently willing to invest are the federal government (which bought out Snowy Hydro Ltd on 1 July 2018 so it could implement Snowy 2.0 unimpeded) and the Tasmanian government.

Or the Government building a new very large coal station, and retire the old stations. This would solve a lot of the problems IMO, you have a new higher efficiency power station, that shuts down existing old unreliable plant.

Let's look at that idea:
For the federal government to do that would be contrary to law.
It defeats the purpose of a NEM.
It would involve massive borrowings, which was a key reason States wanted to divest the undertaking in the first place.
It would not be available for quite a few summers so we would be destined for more blackouts over coming years, irrespective.

The Station would put a bottom line on generation costs, as the privates would be competing against it, also it would give breathing space to give time to install the pumped hydro and renewable generation.

This would only be a yardstick for fossil fuel generators. On an LCOE basis wind will be cheaper and so will solar PV&storage on the basis of present cost curves.
The obvious problem is dispachable power with solar PV alone, and variable capacity with wind.
The practical problem is that we have a government unwilling to put in place a policy framework so that any potential/existing generators can make a commercial decision to add more capacity to the system.

(Smurf, most reading here probably share your concerns about the system. However, it's so tightly tied itself in knots that even Houdini could not escape. Nevertheless imperfect systems can still work. It's a bit like untrained people with perfect ingredients a detailed recipe and baking instructions cooking a decent cake. It can be done if you follow the rules etc.. But the NEM is missing the principle ingredient, viz., capacity, and is cooking up a disaster.)

 

[SirRumpole]

For the federal government to do that would be contrary to law.
It defeats the purpose of a NEM.

Governments make the laws, governments can change the laws.

It's a matter of what is best for the country, not someone's ideological wet dreams.

 

[rederob]

Governments make the laws, governments can change the laws.

It's a matter of what is best for the country, not someone's ideological wet dreams.

This has nothing to do with ideology.
So let's look at your idea:
Immediately any State government changes the National Electricity Law it falls outside AEMO and will immediately face the prospect of load shedding.
Moreover, like it or not, the market does drive electricity prices down because the need for additional capacity, correctly noted by SP, is nowadays shared across 6 State/Territory boundaries rather than each jurisdiction independently.
As a result, any jurisdiction wanting to opt out will in advance need to install additional capacity or face the consequences at the next election.
And on that last point, why do you think that the feds were quiet all last week?
Frydenberg dragged SA over the coals (irony ) when he blamed their push for renewables as the reason for blackouts. But over the last week renewables have been a saving grace, and only fell short because not enough has actually been invested in them.
I scoured the media to see where blame was being sheeted last week; it was principally to capacity failure from aging fossil fuel generators.

 

[sptrawler]

Governments make the laws, governments can change the laws.

It's a matter of what is best for the country, not someone's ideological wet dreams.

If they can't build it, I wonder how they are going to do Snowy 2.0 ?
I wonder why they even talked about it, if it against the law.

As for costing a lot, probably $4B due to economies of scale, not a lot for a secure power system, we spent 10 times that replacing telephone lines. At least everyone will want and use the power generated, not everyone wanted or needed the nbn.
There isn't much sense to me, in spending $50B on internet speed to download pr0n faster, when you haven't got the power to run anything.

In the scheme of things, it to me is the only safe secure way, of suppling power at a reasonable cost, while we transition.
But hey as someone will tell you, i know sod all.
That's it from me, keep up the good work Rumpy, don't let the spin doctors get you down, it is a public service as you say.

 

[Humid]

And in the West the Libs were trying to flog Western Power ......Homer your mob

 

[rederob]

If they can't build it, I wonder how they are going to do Snowy 2.0 ?
I wonder why they even talked about it, if it against the law.

Go and read about how the system works. You still have not figured it out.

As for costing a lot, probably $4B due to economies of scale, not a lot for a secure power system, we spent 10 times that replacing telephone lines.

For all intents and purposes Snowy 2.0 is a giant battery. It cannot of itself add to new capacity.

In the scheme of things, it to me is the only safe secure way, of supply power at a reasonable cost, while we transition.

Hmmm, you are supposed to know a bit how energy supply works.
Whatever energy Snowy 2.0 puts back into the NEM, it must have originally drawn more energy from the NEM to begin.
As to being the only safe secure way, of supply power at a reasonable cost, while we transition, you do realise we are talking about late 2024 if all goes well - ie. in about 6 years time. We are already in transition, and that's why we are already in trouble.

 

[sptrawler]

And in the West the Libs were trying to flog Western Power ......Homer your mob

That was the dumbest thing ever, especially when I worked for them.
Barnett was going to sell them because, he couldnt get any backing, to get the GST back. Funny how we now get the GST fixed, when the Feds see a strong Lib, thrown out on his ar$e.

As for my mob, that is a term for someone who blindly follows a certain Party.
That's not me, I think McGowan is doing a good job, I will vote for him next election.
I think Barnett did a good job, I think the Libs in W.A without him, are a bunch of muppets.

 

[Humid]

How much CRC did it take to loosen the rust.......

 

[sptrawler]

How much CRC did it take to loosen the rust.......

Just took labor to put forward a sensible moderate leader, to me McGowan is putting the State first not the Party ideology, I like that.
To me that is what politics and politicians should be about.
IMO recently politics has become about, what the politician can get out of it, and what yarn he or she has to spin to get the media and vocal minority behind them, because they are Party driven by ideology.
Unfortunately they mostly put Australia second, to their own personal goals.
It is like the electricity crisis over East, who gives a $hit what caused it, FIX IT that's what you are voted in for.
As with the pilots strike years ago, Hawke fixed it, the unions didn't like it( I didn't like it, as a unionist) but he did fix it.
I'm sure if Hawke, Keating or Howard were in, they would FIX IT, Australia has lost leaders. IMO
IMO politics and Parties are just a job recruitment industry, for out of work lawyers and public servants, that want to get more money.

 

[Humid]

https://www.abc.net.au/news/2017-10-23/the-case-for-an-east-coast-gas-reservation-policy/9074896

Another Labor government Homer

 

[sptrawler]

https://www.abc.net.au/news/2017-10-23/the-case-for-an-east-coast-gas-reservation-policy/9074896

Another Labor government Homer

Alan carpenter, another great leader who led by example, he asked the polies to not accept the stupidly generous superannuation as it sent the wrong message.
From memory, he was the only one that did, top bloke. sad he didn't stay in long, i think he became fed up with the people he had to work with.

 

[sptrawler]

https://www.abc.net.au/news/2017-10-23/the-case-for-an-east-coast-gas-reservation-policy/9074896

Another Labor government Homer

You should start a thread, "Great Australian P.M's and Premiers and what made them Great", it might give the current crop something to read up on.

We are probably getting completely off thread.

 

[sptrawler]

Governments make the laws, governments can change the laws.

It's a matter of what is best for the country, not someone's ideological wet dreams.

Have you noticed a common trait, in the thread Rumpy, it is called negativity, Abbott used it to great effect.

You criticise anything another poster puts froward, then ask them to put more ideas forward and criticise that.
As happened with Abbott, when he was asked to put forward his ideas, he was found wanting.

There is a lot of similarities on this thread, where some posters criticise, yet put nothing forward themselves.
You don't have to go very far back, to see examples of this unpopular trait.

 

[rederob]

Have you noticed a common trait, in the thread Rumpy, it is called negativity, Abbott used it to great effect.

You criticise anything another poster puts froward, then ask them to put more ideas forward and criticise that.
As happened with Abbott, when he was asked to put forward his ideas, he was found wanting.

There is a lot of similarities on this thread, where some posters criticise, yet put nothing forward themselves.
You don't have to go very far back, to see examples of this unpopular trait.

That's so funny.
There you are thinking something allowable under the NER is illegal.
Then there are other ideas above that do not pass any test of reason.
The Snowy 2.0 is a great initiative, but it's not going to add network capacity and it's 6 years away at best.
Then there's the blame game.
The solution is not hard.
All the options for market participants are available to add capacity.
But you and others here have not worked out that until there is a clear policy framework for them to commercialise their options, there is no point investing into a potentially poisoned pot.
In fact, I have yet to see that anyone else has mentioned the problem of a policy framework.
As a minimum it needs to consider a price on carbon, and it needs to reward an investment in storage.
Over and above that, the framework must model displacement effects because EVs are likely to be the principal purchase off showroom floors by the mid 2020's and beyond. If that proves the case then generator investment decisions made in the next few years will need to accommodate that further increased demand.