The future of energy generation and storage

[Smurf1976]

The forecast for Wednesday 29th at this stage is a near miss in NSW.

NSW forecast maximum demand = 12,970 MW
Generation available in NSW = 12,399 MW

Supply from Qld can fill the gap but there's not a lot of room to move if anything fails. AEMO estimates the spare capacity available at 856 MW so it would only need a generation fault or the weather to be a bit warmer and there'd be a problem.

That's not trying to run around saying the sky is falling but just pointing out this is all rather stretched really.

Current plant outages in NSW:

Eraring #3 - 700 MW (coal, Origin Energy)
Liddell #2 - 420 MW (coal, AGL)
Tallawarra - 435 MW (gas, Energy Australia

 

[sptrawler]

I'm not sure about other states but in some at least it was the reverse.

The Victorian and SA governments were both propped up by cheap SECV and ETSA funds over the years never the reverse. That's why the utilities ended up in quite a bit of debt - the state government in Victoria especially held a gun to the head and demanded huge dividends for which money was borrowed to pay. By the early 1990's the debt in Vic was crippling and that was the end of it.

NSW government got up to similar antics even before that and their subsequent panic and over-reaction, following by another stuff up by a later state government, has quite a bit to do with where we are today.

Labor governments in all cases for the record except the latter debacle in NSW which was Liberal.

From memory similar happened in W.A, the generators, ended up carrying most the debt from the gas pipe and the take or pay contract Kwinana was converted to burn gas. Again from memory I'm pretty sure most of Alinta's debt was handed to the generators, when Alinta was privatised.

 

[sptrawler]

The forecast for Wednesday 29th at this stage is a near miss in NSW.

NSW forecast maximum demand = 12,970 MW
Generation available in NSW = 12,399 MW

Supply from Qld can fill the gap but there's not a lot of room to move if anything fails. AEMO estimates the spare capacity available at 856 MW so it would only need a generation fault or the weather to be a bit warmer and there'd be a problem.

That's not trying to run around saying the sky is falling but just pointing out this is all rather stretched really.

Current plant outages in NSW:

Eraring #3 - 700 MW (coal, Origin Energy)
Liddell #2 - 420 MW (coal, AGL)
Tallawarra - 435 MW (gas, Energy Australia

Smurf do you think it will be more difficult as summers go on, or is there some serious generation coming in the near future, before Snowy2?

 

[Smurf1976]

Smurf do you think it will be more difficult as summers go on, or is there some serious generation coming in the near future, before Snowy2?

For NSW there was a change of decision by the owners of a small CCGT plant. It was 171 MW with 3 gas turbines and 1 steam turbine and was going to close in 2018 but with the situation they changed their mind and kept the three small gas turbines in open cycle configuration with a combined output of 109 MW. The steam turbine is gone though.

So I suppose that could be counted as, well it's not additional but it was a planned closure and they're still open so it's at least not a loss of supply. The plant's less efficient and a third smaller but it still generates something. Location is an industrial area in western Sydney.

There's a plan to upgrade 4 existing units at Bayswater (coal) from 660 M to 685 MW each in 2020, 21, 22, 23. Owner = AGL.

Origin have their pumped storage expansion plans at Shoalhaven to add either 160 MW or 240 MW depending on how they go about it. They're targeting the bigger option and if that doesn't stack up will look at the smaller one. Timing is uncertain but the dams are already there as are two power stations, they just need to add tunnels and a third one, and given the distances are fairly short etc they could probably beat Snowy 2.0

New 800 MW line between SA and NSW isn't 100% committed but I think rather a lot of people would be stunned if it didn't go ahead. It's almost in the "too big to fail" category really for political reasons more than anything else.

Other than that the only thing committed in NSW is wind, solar and closure of Liddell (1680 MW) in 2022. Nothing wrong with wind and solar of course, they'll work nicely with the pumped storage, but there's a big hole in firm generating capacity 2022 - 24 assuming 2024 is the date for Snowy 2.0 so that's when it could get interesting.

With noting that NSW is unique in having a major peak in both Summer and Winter with minimal difference in peak on a properly cold day versus a properly hot one. In contrast all other mainland states are strongly Summer peaking and Tasmania is strongly Winter peaking.

 

[rederob]

There's really four aspects to the overall dilemma:

1. Need to meet the technical (electrical) requirements. Fail that and the lights really will go out, no question about it.

2. Financial cost both in terms of the actual costs and the price charged to consumers.

3. Use of natural resources. 50Hz AC power does not exist anywhere in nature, it is a completely man-made thing, and in order produce it requires that some source of primary energy be used. Some of the available sources of primary energy are plentiful and with minimal consequences to their use but others are physically limited, or entail broader implications such as importing from unstable or unfriendly sources, and a valid question exists as to whether or not is is sensible to use these resources to generate electricity? That is particularly so in the case of relatively limited non-renewable resources which have important uses for other purposes.

4. Environment. The mainstream environmental movement is often associated with trees and whales but it's a matter of historical fact that in the Australian context the movement had already tackled issues relating to hydro-electric schemes versus the wilderness, pollution and the use of limited resources at gas-fired power stations and the generic concept of building a nuclear power station several years before the movement focused on anything relating to trees.

I frame the problems from different perspectives, noting you tackle them in a fashion.
1. Not enough spare capacity to address present weather extremes simultaneously with plant outages

• this will be exacerbated if responses do not account for future plant closures

2. Investor unwillingness to commit to fund large scale projects without clarity on a price on carbon

• COAG EC opted for a NEG rather than Finkel's blueprint for transition

3. We need to incentivise solutions to intermittency in a transitioning market

• cost curves for FF energy and renewables (VRE) trend opposite such that CST for example, will be cheaper than coal in the early 2030's

4. We need a commitment to fund the spine of a fully interconnected eastern seaboard grid, and upgrade the technical componentry to progressively tie-in VRE

The adage "if it ain't broke, don't fix it" cannot apply if it ain't there.
Finkel wanted it all to be there because Australia is to big for a one size fits all solution.
The feds want - and it's their policy - that what we already have must be cheap for consumers as we lead into the next election. But a lot of what's there is already broke and needs fixing.

Skipping directly to 2 as it solves 1. Investors understand the global market either already has or is putting a price on carbon. Should that occur after an investment decision is made, the commercial viability of a project can disappear. As SP noted earlier, generators don't want to be burnt by stranded assets. That leaves governments to fill any void. However, the States seem unwilling given it defeats the purpose of a NEM, while the Commonwealth quickly splurges up to $5bn on a giant battery that removes electricity from the grid and won't be available for about 6 years.

Point 3 is pivotal. Finkel's approach included utility-scale renewable generation, storage technologies, flexible thermal supply (CST) and distributed energy resources (of which microgrids and bi-directional energy flows from EVs are subsets). This paper shows that CST will in future become cheaper than coal and could prove a quicker fix to intermittency than Snowy 2.0. It also solves energy problems for more remote regions of Australia.

Point 4 just adds to Smurf's point 1 in that we need additional interconnector infrastructure as well as the concomitant technology to tie-in the many VRE options.

My argument from the outset is that we have political failure to act. The options are available to get on top of and ahead of out energy dilemmas. COAG EC has received excellent advice and understands what the future holds.
In the meantime we, the consumers, are being screwed over.

 

[SirRumpole]

However, the States seem unwilling given it defeats the purpose of a NEM,

Yes, but the NEM is an ideological framework formed by the belief that privatisation always results in the best deal for consumers. That is patently not the case in the electricity market and other essential services, so why cling to a failed belief system ?

 

[rederob]

Yes, but the NEM is an ideological framework formed by the belief that privatisation always results in the best deal for consumers. That is patently not the case in the electricity market and other essential services, so why cling to a failed belief system ?

You can call it what you want, but it is the lawful operational framework we operate within.
Within that framework the problems we recently faced were made known well in advance, and Finkel synthesised solutions in his transitional blueprint so they did not recur.
There is a head to the monster but, sadly, a non-functioning brain.

 

[sptrawler]

So getting back to the problem, again smurf sorry to pick your brains, do you have any idea of the expected load growth for 2019-2020?
That will be a major driver of any requirement, if the load is expected to fall due to reduced economic activity, uptake of PV etc, they may be expecting the problem to be self resolving.
That is only a thought, but it may actually be the case, a long shot. IMO

 

[basilio]

Excellent article on ABC on the Snowy project. Very challenging project. Also a good p\icture of teh planned shutdowns of coal fired stations.
Hydro and seek
Snowy Hydro 2.0 – will it ever be built?

By Melissa Clarke
https://www.abc.net.au/news/2019-01-30/snowy-hydro/10683112

 

[sptrawler]

It was a good picture of the planned closing times, it will be interesting to hear surf's comments.

 

[basilio]

Very dangerous fires in Tasmania at the moment. What did catch my eye was comments about threats to power generation and transmission lines. Could cause trouble there and in the Eastern States as they export power.
Tasmania fires: scores of blazes rage as residents asked to conserve water
Fears Tasmanian bushfires will worsen as temperatures forecast to peak in mid-30s with winds up to 40km/h

....Chief fire officer Chris Arnol has warned it is likely more homes will be lost. There is also a threat to critical infrastructure including power generation and transmission lines.
https://www.theguardian.com/austral...zes-rage-as-residents-asked-to-conserve-water

 

[Smurf1976]

Very dangerous fires in Tasmania at the moment. What did catch my eye was comments about threats to power generation and transmission lines. Could cause trouble there and in the Eastern States as they export power

It's not a good situation in multiple parts of Tas at the moment with the fires. Hence the crews from Vic, NSW, SA and NZ attending in addition to local fire crews and volunteers.

From an electricity perspective there's rather a lot of transmission infrastructure surrounded by heavy smoke and that in itself is a problem with or without actual fire affecting it although there's that too. A few line faults have occurred with some brief losses of industrial load as a result.

As a whole, it would be fair to say the system's somewhat beaten up but it's still going apart from a few towns where the distribution network is now a tangled mess lying on the ground but in terms of generation and bulk supply it's still working thus far.

There's a lot of shuffling around of generation between power stations to deal with that and also Vic - Tas transmission is switched off in order to simplify things but it's not broken (could be operated manually if required but it would be a brave move, too risky, to do things automatically at the moment so manual control it is).

The one big advantage Tas does have over the other states is that all the limits are known and there's no need to worry about administrative details. As things unfold there's plenty of operators, tradespeople and engineers who between them hold vast knowledge on exactly what everything can and can't do, where the absolute limits sit and what workarounds exist.

In contrast the other states are in practice far more reliant on what it says on the spec sheet and following rules and so on. Some companies have very thorough knowledge of their own stuff, others are in a bit of trouble there , but there's overall quite a different approach and rules tend to triumph over keeping the lights on whereas Tas is the reverse - just because you've got a rule doesn't mean you need to follow it.....

 

[sptrawler]

Very dangerous fires in Tasmania at the moment. What did catch my eye was comments about threats to power generation and transmission lines. Could cause trouble there and in the Eastern States as they export power.
Tasmania fires: scores of blazes rage as residents asked to conserve water
Fears Tasmanian bushfires will worsen as temperatures forecast to peak in mid-30s with winds up to 40km/h

....Chief fire officer Chris Arnol has warned it is likely more homes will be lost. There is also a threat to critical infrastructure including power generation and transmission lines.
https://www.theguardian.com/austral...zes-rage-as-residents-asked-to-conserve-water

Fires can be a big problem, they trip lines very easily.
I was at work in the 1990's, when the two transmission lines between Muja and Perth (Kwinana) tripped, 'blacked' out the grid.
That wasn't a fun day, Kwinana was the only station that could black start, so as you could imagine it was a busy time.
The two major Power Stations, silent and all the units red hot, so getting them on was a nightmare.
Meanwhile you have the phones running just as hot, as everyone including parliament are sitting around in the dark, navel gazing.
I remember holding up the phone, when someone high up rang about the situation, "I said can you hear anything, he said no I said, neither can I but we have to get something happening and been on the phone to you isn't helping".

 

[Smurf1976]

Yes, but the NEM is an ideological framework formed by the belief that privatisation always results in the best deal for consumers

As a general comment debates about energy have long tended to take on a religious like nature and that goes back a very long way.

People become fixated on a concept and just won't consider any alternative. Plenty of examples of that over the years and it's one of the reasons it all changes so slowly, attitudes and beliefs become very entrenched.

That's more a public and political phenomenon than an industry one but it has been pretty consistent over the years with everything from petrol specifications to the choice of resources used to generate electricity. There's always a section of society, often the majority, with an entrenched belief that's very hard to change.

On the specific question of privatisation and the NEM, my observation is that it's the market structure rather than who owns it as such.

AGL, a listed company, in 2019 charges more for gas in Sydney than the inflation adjusted price during their long period as a monopoly supplier.

Snowy Hydro under the separate brands Red and Lumo, and Hydro Tasmania under the brand Momentum, are both owned by governments and both retail electricity in the high priced SA market. Suffice to say neither can beat the privately owned retailers in the same market to any major extent since they're all faced with similar costs.

The market structure, far more than who owns it, is the issue there. It creates competition yes but it adds a lot of costs in doing so.

 

[SirRumpole]

Suffice to say neither can beat the privately owned retailers in the same market to any major extent since they're all faced with similar costs.

Sure government controlled retailers in many ways can't compete with privates but they are expected to be there tomorrow and next year as opposed to companies than can close their books at any time, declare bankruptcy, avoid social obligations and leave an unsightly mess behind.

There is room for both in the market, just as there is room for public and private schools and public and private hospitals, but inevitably it's the public sector that end up carrying the load when businesses fail, the trick is getting the mix right and not letting ideology get in the way.

 

[Smurf1976]

Sure government controlled retailers in many ways can't compete with privates but they are expected to be there tomorrow and next year as opposed to companies than can close their books at any time, declare bankruptcy, avoid social obligations and leave an unsightly mess behind.

True but my point is more that the market structure as it exists today increases costs for anyone regardless of ownership.

AGL, Alinta and Snowy Hydro all have different ownership structures (listed company, not listed, government) but all incur costs in retailing that need not be there due to the current market design.

The way the market works is an issue in itself regardless of who owns things.

 

[Smurf1976]

Fires can be a big problem, they trip lines very easily.
I was at work in the 1990's, when the two transmission lines between Muja and Perth (Kwinana) tripped, 'blacked' out the grid.

The good thing though is that SECWA had planned ahead just in case something like that ever happened and put an OCGT out the back of Kwinana PS just in case.

An assumption on my part here but presumably that would have been used during the system restart.

That's the sort of thing that costs money to build and maintain, produces no revenue and sure can't make a profit, but which is critical to system integrity. The kind of thing that in a competitive market nobody wants to own.

For others who have no idea what I'm on about Kwinana is a now closed power station in its original form in WA. There are other generators at the site installed much later however but the original facility is shut.

Kwinana comprised 4 x 120 MW built in two stages or two units each (stages A and B) and 2 x 200 MW (stage C) steam turbines plus a 21 MW open cycle gas turbine.

The whole lot was built as oil-fired plant and initially that was the only fuel used. Following the oil crisis stages C and A were converted to also fire coal and SECWA received a fair bit of attention internationally for the speed at which this was all done. With the development of the NW Shelf natural gas fields the whole lot was also converted to fire gas whilst retaining the ability to use coal or oil.

Location - an industrial area not far from Perth.

 

[rederob]

Sure government controlled retailers in many ways can't compete with privates but they are expected to be there tomorrow and next year as opposed to companies than can close their books at any time, declare bankruptcy, avoid social obligations and leave an unsightly mess behind.

Given the NEM does not work that way, the expectation is unrealistic.

There is room for both in the market, just as there is room for public and private schools and public and private hospitals, but inevitably it's the public sector that end up carrying the load when businesses fail, the trick is getting the mix right and not letting ideology get in the way.

The difference is that the NEM is the principal market, and other generators need to apply to the regulator to not come under AEMO.
Last December was the 20th year of the NEM and despite a lot of the issues identified by smurf it was reasonably reliable until the COAG EC Chair impeded investment decisions on ideological grounds.
For very understandable reasons I know why smurf avoids any comment with a political tone, but I am not shackled.
The Abbott government's opposition to renewables was immediately transparent, and for over 5 years we have had attempt after attempt to maintain a fossil fuel energy future despite increasingly overwhelming evidence that it's a fatally flawed policy stance.
The palpable position of the feds was best demonstrated by its protracted and failed attempts to have AGL maintain Liddell beyond its commercially viable life. What was most striking if you followed what was happening is that AGL clearly stated its intention to replace lost capacity with other technology.
That was not good enough so the feds pressured AGL to sell to Alinta.
Now that might sound ok to some reading here because it looked like Turnbull was doing the right thing to keep the lights on. But in fact it was desperation from the PM knowing that the COAG EC was avoiding Finkel's solution which was effectively predicated on a price on carbon.
Turnbull's next desperate step, so as to ensure the lights would not go out, was a decision to spend $6b buying out the State's shares in Snowy Hydro. This measure meant that nothing short of a change in federal government would stop another $4b to $5b being spent on this project (as has been already evidenced in redacted sections of the plan to date).
What is now ironic is that the lights have since gone out and are likely to keep going out for the many years ahead because Snowy 2.0 is simply too slow in coming.

 

[SirRumpole]

What is now ironic is that the lights have since gone out and are likely to keep going out for the many years ahead because Snowy 2.0 is simply too slow in coming.

Yes.

The situation as I see it, from my amateur point of view is,

* Our current coal stations are getting towards the end of their lives and those that own them don't want to maintain them any more.

* New coal stations take a long time to build. (6+ years)

* Large scale storage like more hydro is going to take a long time to build, so a lot of renewables will go to waste.

* Intermittency of current renewables is a problem for the grid without sufficient storage.

* Baseload power will still be needed untill storage and more renewables come online.

* We have a lot of gas which we are currently exporting at cheap prices.

Therefore my conclusion is that the best medium term solution is to build more gas fired plants, both open cycle (online sooner) and CCGT (more efficient) to fill the baseload power gap while we are building Snowy Hydro 2.0 and other Hydro sites and more renewables.

Whatever we do is going to cost a lot of money. We should aim for the best technical solution , penny pinching is going to do more harm than good in the long run.

 

[sptrawler]

Yes.

The situation as I see it, from my amateur point of view is,

* Our current coal stations are getting towards the end of their lives and those that own them don't want to maintain them any more.

* New coal stations take a long time to build. (6+ years)

* Large scale storage like more hydro is going to take a long time to build, so a lot of renewables will go to waste.

* Intermittency of current renewables is a problem for the grid without sufficient storage.

* Baseload power will still be needed untill storage and more renewables come online.

* We have a lot of gas which we are currently exporting at cheap prices.

Therefore my conclusion is that the best medium term solution is to build more gas fired plants, both open cycle (online sooner) and CCGT (more efficient) to fill the baseload power gap while we are building Snowy Hydro 2.0 and other Hydro sites and more renewables.

Whatever we do is going to cost a lot of money. We should aim for the best technical solution , penny pinching is going to do more harm than good in the long run.

Good summation Rumpy, you have been listening to smurf.

The one thing you have a bit wrong, is the time it would take to build a new coal station, if the used a site like the old Hazelwood site a lot of the infrastructure is already there coal handling, switchyard, etc.
As Hazelwood was 2,000MW, I would guess you could get 4 X 500MW units up within 4 to 5 years