The future of energy generation and storage

[Smurf1976]

Final comment for the moment is about market prices.

Looking at the spot price received (or paid in the case of pumping or battery charging) on average across the NEM over the past 12 months:

All prices are per megawatt hour.

Market average = $97.51

Biomass = $81.66
Wind = $86.94
Coal = $91.45
Solar = $96.10
Hydro = $107.47
Gas = $142.25
Battery Discharging = $213.04
Diesel = $1821.24

Energy used for pumping = $64.39
Energy used for battery charging = $76.56

A reminder that those are the market prices received (based on the spot price) for the generated output. That is a simple calculation of volume x price at the time = average over the year. They do not necessarily reflect the cost of production which, as with anything, isn't necessarily the same as the selling price.

 

[SirRumpole]

Smurf, you are a gem for taking the time to write such a detailed explanation, thank you.

Two things, geothermal wasn't mentioned, I take it that possibility is a fizzer ?

What about concentrating solar plants with molten salt storage ? Any possibilities there ?

 

[macca]

Brilliant posts Smurf, thanks

 

[rederob]

Happy to answer the question etc.

Except that you never responded to the point I made.
If you rely on thinking in terms of what there is, you will overlook where change is occurring, and that appears the case with your detailed replies.
Our renewables market is immature and grid infrastructure deficient. For example, Tasmania's Battery of the Nation will require significant infrastructure investment to be viable, and without an eastern seaboard interconnector spine, is dead before crossing the water
Look closely at your charts on wind generation and you will clearly see that the early gaps in wind generation on a daily basis are being filled. Australia's wind market is in its infancy, as in mature markets (which is interesting of itself in that renewables -mostly grid scale wind/solar - don't have a long history) solar is subservient. Wind therefore has a very long and profitable road ahead, clearly being one of the cheapest forms of new capacity generation. Moreover, as shown in the link, the areas of best wind potential have not yet been tapped.

Back to my point about Snowy2.0 and using your data for clarity & simplicity. The present summertime eastern seaboard generation shortfalls would, by 2025, cease to be a problem if Labor's plan of 1 million home batteries were installed (assuming a 10KW battery), as that's nearly half of total daily demand. It's ambitious, but even getting part way there negates Snowy2.0.
Assuming battery cost continue on their downward trajectory, especially given that scaling has not occurred for the domestic market (as it has for solar panels), then residential battery penetration will be higher than Labor's target even without subsidies, although not for around 10 years.

Clearly winter will not have much solar potential, but your charts suggest that present wind capacity is in areas which show greater generation in these months than in summer months. Were investment trends commensurate with seasonal generation patterns to date, then wind & battery could easily smooth the daily variability. The data from wind farms that I have read suggest that unless wind farms are spread greater 1200km - and are interconnected - then seasonality is difficult to mitigate.
However, there is 2000km of coast from Adelaide to Perth which would overcome this problem, and this (see figure 2) is in one of the world's best untapped wind resources.

Let's now assume Snowy2.0 is built and we pump water into it so that it can generate electricity. Let's generate 1MWh in this example and use smurf's (above) spot prices (not the best metric?).
We need to take about 1.15MW from the grid to generate the 1MW from Snowy2.0.
Using average spot prices, that would otherwise have earned $112.13 (1.15 x $97.51).
Using the pumping spot price is, however, the economic path so to get the water in the dam will now only cost (1.15 x $64.39 =) $74.04
Snowy2.0 then sells the 1MW into the spot market and receives $97.51
The margin is therefore $23.47 per megawatt.
The question is why would a generator want to derive $23.47 per megawatt when investments in other carbon neutral generation capacity such as wind would derive $86.94 or $97.51 from the present mixed energy offering?
Put differently, the federal government could better spend it's money facilitating both grid scale and residential battery storage while putting in place the necessary infrastructure.

 

[Smurf1976]

Looking at SA right now:

Wind farm output = 69% of load within the state
Solar output (all solar) = 36% of load within the state

So wind and solar combined exceed total load in SA.

Due to the need to have synchronous plant, that is big rotating machines attached to alternators, online for system strength, all units are running at Pelican Point (Engie / Origin Energy) generating 26% of load in SA and one unit is online at Torrens Island B (AGL) generating 3% of load. Pelican Point and the one unit that's online at Torrens Island B are all running at the minimum technical output whilst keeping the machines running as such as they need to be.

So that's total generation of 135% of load within SA, the surplus 35% going to Victoria where it's supplying 11% of that state's consumption (or to be more precise, it's adding to the export from Victoria to both NSW and Tasmania).

Now, and of direct relevance to two ASX listed companies, is what's forecast currently by AEMO in the SA region.

For the 03:30 - 15:00 period tomorrow the forecast is for negative prices in SA, mostly at or close to negative $1000 per megawatt hour. Prices during other periods are also mostly quite low.

To keep the currently operating synchronous units online during that period would amount to, after the cost of gas is included, an overall loss in the order of $4 million. There's no electricity law saying they can't burn money but responsibilities to shareholders means they won't do it voluntarily.

To cut a long story short, AEMO has issued directions, likely to be in effect until 23 April based on present forecasts.

A direction is a formal "you will" sort of direction and is not negotiable. You will keep the plant running.

Note however that a direction is not a fine or penalty, it's simply a direction on what to do. In other words it's overriding the market because the outcome produced on account of the financial aspects isn't one that's technically suitable.

Such directions are common in SA in particular but not overly common elsewhere.

Once the direction is in effect, those operating under it can recover their actual costs but that's it, they're not operating for profit when under direction. Direction ends when normal market processes produce technically suitable outcomes once again, that in itself being a function of market prices and decisions made by the traders at the relevant companies.

This situation is symptomatic of the great dilemma in the entire industry. What's needed technically and what's profitable converge only partially. Some things which are profitable are not actually needed. Some things which are critical to have are not profitable.

So far as the renewables versus fossils debate is concerned, ultimately the idea of "100% renewables" isn't profitable. Hence why you see companies like AGL contracting or building some renewables but also spending $ hundreds of millions on new gas infrastructure and gas-fired generation. They're expecting a future with more renewables and a gradual winding down of fossil fuels but not to the point that they can't still be burning coal well into the 2040's and gas sometime beyond that.

Others have a view that involves the idea of going 100% renewable. That in practice is the future that Snowy and Hydro Tas are assuming with their ideas. Both do own gas-fired generation but they're not seeing that as more than a fairly temporary thing.

It's no coincidence of course that the government owned entities with a greater engineering influence are biasing more toward renewables whilst the listed companies with a financial focus are more toward gas. That's exactly the outcome that one would rationally expect.

 

[explod]

This may have already been shown here but these batteries are certainly getting very good:-

"
A company called CCT Energy Storage just put Lonsdale, South Australia firmly on the map. In late March, the start-up unveiled the very first high-density thermal battery, which out-performs its lithium-ion and lead-acid counterparts many times over. Called a Thermal Energy Device (TED), the modular unit stores electricity as latent heat, which can be converted back into energy on demand.

A standard TED unit can store 1.2 megawatt-hours of power and has a life expectancy of at least 20 years. “After 3,000 cycles of service on the test bench,” CCT’s CEO Serge Bondarenko says it shows no signs of degradation (compared to a lithium-ion battery, which drops 20 percent of its capacity after about 5,000 cycles). “In fact,” Bondarenko adds, “it appears silicon even gets better at storing heat after each cycle.”

TEDs accept any kind of electricity you throw at them—solar, wind, hydro, fossil-fuel, grid-fed—converting and storing that energy at more than 12 times the density of a lead-acid battery and six times the density of lithium-ion. They can charge and discharge concurrently, saving time and wasted energy. Compact and durable, the devices require very little maintenance and are 100 percent recyclable. And perhaps most surprising, they’re cheap: about three-quarters of the cost of an equivalent lithium-ion setup.

CCT—which stands for Climate Change Technologies—designed the units to be easily scalable and just as appropriate for small 5kW applications as they are for entire remote communities, business districts, telecommunications networks, and transport systems requiring “hundreds of megawatts of instantaneous power.” This speaks to the company’s vision of a safe, sustainable energy source that can be used anywhere in the world regardless of urbanization, economics, or infrastructure.

CCT’s Thermal Energy Devices have huge implications for the renewable energy industry. Intermittent sources such as solar and wind depend on versatile, long-lasting storage solutions to bank extra power generated during peak production times. TEDs have the potential to make renewable energy a round-the-clock alternative energy source for any locale.

Through a manufacturing agreement with MIBA Group, the new tech will begin production for European and Australian markets this spring. By 2020, production is expected to increase exponentially in quantity and scale as negotiations with other countries get underway.

Suddenly, the idea of a clean energy future feels a little less remote, thanks to a Down Under start-up with a go-for-broke vision to provide “affordable power to those who need it most.” The global energy market will never be the same."

https://www.popularmechanics.com/te...unwuEzOLNiKZ6Vxllhn8__tC8uztbEZtAPE6oKN-3ouo4

 

[rederob]

So far as the renewables versus fossils debate is concerned, ultimately the idea of "100% renewables" isn't profitable.

Except that you have no data. And the global reality is that wind/solar+storage is beginning to take shape.

They're expecting a future with more renewables and a gradual winding down of fossil fuels but not to the point that they can't still be burning coal well into the 2040's and gas sometime beyond that.

That's a guess.
The cost curves (see @ 1:15 here) show that renewables+storage, with the right policy settings (and this does not yet include the NEM) will likely have made most FF capacity "stranded" by the early 2030s.

Others have a view that involves the idea of going 100% renewable. That in practice is the future that Snowy and Hydro Tas are assuming with their ideas.

See here at 23:15 where wind/solar+battery at 50% shares and small overcapacity can satisfy the market.

It's no coincidence of course that the government owned entities with a greater engineering influence are biasing more toward renewables whilst the listed companies with a financial focus are more toward gas. That's exactly the outcome that one would rationally expect.

Except that government entities can run their own race with fleeting regard to profit, while market players play to the rules of the NEM and obligated to their shareholders to deliver returns.
Market players want a policy setting that gives them a degree of certainty regarding future spends, and we are here talking ballpark $tens of billions rather than stopgap measures. Until that situation is in place, rational decision making is out the window.

 

[Smurf1976]

Except that you have no data.

I have posted you the actual performance of the sum total of all wind and solar currently in the NEM.

That's a guess.

It's a guess backed by significant amounts of shareholder's money.

Newcastle gas storage for peak demand = $310 million (in operation)

Barker Inlet power station = $295 million (under construction, completion 2019)

Victoria LNG import terminal = $250 million (proposed)

Newcastle open cycle gas turbines = estimated up to $400 million (completion 2022) plus investigation of additional capacity about double the size of that presently planned.

Bayswater upgrade additional 100 MW (coal, NSW) = estimated $200 million (completion 2023)

That is just AGL's current and recent fossil fuel projects. They also are doing / planning wind, solar, batteries and small pumped hydro. Eg Bells Mountain pumped hydro in NSW with 250 MW capacity, 2 GWh storage for $450 million is under investigation.

Point being they are developing renewables backed by a combination of gas and short term storage, they are not going down the track of total reliance on renewables since as you point out the large scale storage required doesn't come cheap.

AGL won't be spending / have recently spent almost $1.25 billion of shareholders funds on new gas and gas-fired generation plus $200 million on upgraded coal-fired generation without having concluded that doing so is the financially prudent course of action.

See here at 23:15 where wind/solar+battery at 50% shares and small overcapacity can satisfy the market.

Indeed they can and neither I nor anyone would sensibly dispute that. 50% renewables backed by fossil fuels works most certainly and doesn't require more than modest storage to achieve that.

Build more renewables, build the smaller scale storage to go with them, build new fossil fuel plant to replace what's wearing out and we'll be right for decades to come. Easy.

There is however a view, which is broadly pushed by the environmental side of politics, that a 50 / 50 fossil fuel / renewable mix might not be acceptable in the long term, or even for the relatively short period of half a century, and there could be a need for a lower use of fossil fuels due to the CO2 issue.

I have no expertise on climate science but that argument is certainly around, that getting to 50% renewables isn't really where it stops, and that thinking underpins the ideas put forward by Snowy and Hydro Tas which represent some of the infrastructure required to go to much higher levels of renewables in a reasonably economic manner.

Large scale storage doesn't compete against small pumped hydro and batteries. Rather, it plus additional wind and solar competes against fossil fuels for filling in the gaps, in practice that's primarily gas.

Except that government entities can run their own race with fleeting regard to profit, while market players play to the rules of the NEM and obligated to their shareholders to deliver returns.

All participants regardless of ownership are bound by NEM rules and they are strictly enforced with the exception of very small generators (households) although distributors do enforce some rules there.

Hydro Tas doesn't have the same profit motive that the listed companies do that is true but it certainly doesn't have the option of running up losses on an ongoing basis given it's a self-funded entity not something funded by taxpayers. The difference is thus about rate of return not whether there's a return on investment. For the record, yes government entities like that do pay taxes as anyone else, the only real difference being in the accounting terminology used.

In Snowy's case I'm not sure what arrangements apply so no comment there.

Market players want a policy setting that gives them a degree of certainty regarding future spends, and we are here talking ballpark $tens of billions rather than stopgap measures. Until that situation is in place, rational decision making is out the window.

No disagreement there although I'll note that if you look at AGL, Snowy and Hydro Tas then their actions and proposals all have one thing in common despite their technical and ownership differences.

They can't really lose once they've built it. First mover advantage. Nobody's going to build anything to compete directly against what's already been built given that (1) there's plenty of upcoming opportunity to build other things which aren't competing against others and (2) they know that doing so would crash the price.

In that context I note that Alinta, Origin and Energy Australia have all invested $ firming up plans and in some cases have gone as far as land, permits, public announcements and so on for their own various plans.

For the listed and private for-profit companies they won't really care how it all plays out. AGL, Alinta, Origin or EA can build their gas, small storage and wind + solar or alternatively they can build less gas and more wind+solar in order to supply energy for pumping to Snowy and Hydro Tas and then sign hedge contracts with them to gain access to firm generation. Either way they win so long as they invest in something and do it in an efficient manner.

Only way they'll really lose is if someone comes along and builds large scale storage after the others have already invested in new gas-fired generation and small pumped hydro / batteries on the assumption that large storage won't be built. That would hurt but we're a long way from that point being reached.

 

[Smurf1976]

The way I see it regarding the risks of Snowy 2.0 and Battery Of The Nation:

If nobody comes up with something cheaper as a means of bulk storage and there is future pressure to go beyond 60% or so renewables then they will have been a good investment.

If someone does come up with a cheaper way of bulk energy storage and there is a need to go beyond ~60% renewables then the loss is the cost difference between these two projects and the cheaper means. Given that much of the cost is for civil works, they will have amounted to a blue collar make work scheme in regional locations.

If there is no future need to go beyond ~60% renewables then they will represent a loss to the extent that new gas-fired generation would have been cheaper. Based on AGL's recent cost estimates, a gas equivalent to Snowy 2.0 would cost $2.8 billion to build so that's $2.3 billion less than Snowy 2.0. The saved $2.3 billion would then cover the gap between buying gas, versus the cost of energy for pumping, for decades assuming the money is invested at commercial rates and drawn upon to fund the gas purchases over and above the cost of pumping.

So there's undeniably a financial risk but the extent of that risk is considerably less than the cost of construction. They will have an ongoing value, the only question will be whether or not they could have been done more cheaply or not in hindsight but the practical value remains.

Regardless of whether these projects are built or not, time is running out to get something built and to that end I'll simply say that the longer a decision takes, the more likely the ultimate outcome involves use of the word "diesel" and I doubt that anyone would consider that to be a good outcome given it's both polluting and expensive.

 

[SirRumpole]

The way I see it regarding the risks of Snowy 2.0 and Battery Of The Nation:

If nobody comes up with something cheaper as a means of bulk storage and there is future pressure to go beyond 60% or so renewables then they will have been a good investment.

If someone does come up with a cheaper way of bulk energy storage and there is a need to go beyond ~60% renewables then the loss is the cost difference between these two projects and the cheaper means. Given that much of the cost is for civil works, they will have amounted to a blue collar make work scheme in regional locations.

If there is no future need to go beyond ~60% renewables then they will represent a loss to the extent that new gas-fired generation would have been cheaper. Based on AGL's recent cost estimates, a gas equivalent to Snowy 2.0 would cost $2.8 billion to build so that's $2.3 billion less than Snowy 2.0. The saved $2.3 billion would then cover the gap between buying gas, versus the cost of energy for pumping, for decades assuming the money is invested at commercial rates and drawn upon to fund the gas purchases over and above the cost of pumping.

So there's undeniably a financial risk but the extent of that risk is considerably less than the cost of construction. They will have an ongoing value, the only question will be whether or not they could have been done more cheaply or not in hindsight but the practical value remains.

Regardless of whether these projects are built or not, time is running out to get something built and to that end I'll simply say that the longer a decision takes, the more likely the ultimate outcome involves use of the word "diesel" and I doubt that anyone would consider that to be a good outcome given it's both polluting and expensive.

Do you see any future for this ?

https://en.wikipedia.org/wiki/Concentrated_solar_power

 

[Smurf1976]

Do you see any future for this ?

That sort of thing was the big hope for many years and as a concept it still has technical advantages.

The problem and the reason there’s not a lot of interest really comes down to one word.

China.

Solar panels have become so cheap with massive scale production, primarily in China as with a lot of manufactured goods, that it’s hard for any other way of using solar energy to compete.

It now costs more for site works, frames, cables and so on to install the panels than the panels themselves are worth such is the extent of the price fall.

That’ great news in terms of increasing the use of solar but not so good for any other technology.

Given that the market pays for energy but it doesn’t pay for peak capacity or reliability that’s another issue which favours whatever is the cheapest “grunt” approach.

That said an issue for all developers is making sure everything’s in place and agreed up front.

I won’t name it, I’m not sure if it’s supposed to be public knowledge or not, but there’s one rather expensive large scale renewable energy project that has been mostly ready to go for months but is sitting there doing almost nothing in practice.

There’s another one, in a different state, that’s limited to about 25 - 40% of capacity depending on circumstances.

So it’s important for any devloper to get everything in place right from the start. Otherwise it’s a tad embarrassing if you can’t get the power out of the place or forgot that there’s a market you’re going to be participating in.

If you’re investing then make sure whoever’s doing it knows what they’re doing. A wind or solar farm doesn’t have much in common with a wheat farm.

 

[rederob]

I have posted you the actual performance of the sum total of all wind and solar currently in the NEM.

So what?
We have a very immature market for grid scale renewables.
You need to present data for more mature markets, and you will see that the "gaps" disappear in the manner I explained.

It's a guess backed by significant amounts of shareholder's money.

Yes, it's still a guess.
And again, the shareholders do not get a say in NEM policy, and that's the heart of the problem.

They can't really lose once they've built it.

They are hardly going to build it unless the grid infrastructure is in place.
Tassie's case, imho, is far superior to Snowy2.0 because they literally have nowhere near the upfront costs.

...or alternatively they can build less gas and more wind+solar in order to supply energy for pumping to Snowy and Hydro Tas and then sign hedge contracts with them to gain access to firm generation.

The trend is for renewables+storage to increase ten fold in ten years.
The most recent US supply contract I saw was renewables+storage at 3.9cents/Kw. That's where we can be in Australia with the right policy settings.
The base case for all pumped hydro is to use the lowest cost excess or spinning reserves to refill the dams off peak. Generators will opt for the best price they can get for all future capacity builds, and that will not be for pumped hydro unless the government owners are happy to subsidise big business - not a good look.
With regard to your ideas on "bulk storage," the future is not in large scale as you keep suggesting. VPP's/microgrids and integrated renewables+storage is where the rest of the world in now heading. It's a very simple direction dictated solely on economics.
Yes, grid infrastructure needs to be massively upgraded, but that's inevitable under all future scenarios.
And I agree that "decisions" need to be made soon. But without credible policies for the NEM, any stopgaps will merely subject consumers to ongoing higher prices. I cannot see the big players in the market losing in the near term, no matter how they get over the hump in the next few years.
We as consumers will keep carrying the can for governments that refuse to listen.
It's a travesty that there are years of reports to the various federal Energy Ministers who have refused to acknowledge that NEM policies need to price in carbon some way, and therefore lock us into not just more load shedding, but the incremental costs of continually accessing the highest priced electricity during peak periods.

 

[Smurf1976]

And I agree that "decisions" need to be made soon. But without credible policies for the NEM, any stopgaps will merely subject consumers to ongoing higher prices. I cannot see the big players in the market losing in the near term, no matter how they get over the hump in the next few years.
We as consumers will keep carrying the can for governments that refuse to listen.
It's a travesty that there are years of reports to the various federal Energy Ministers who have refused to acknowledge that NEM policies need to price in carbon some way, and therefore lock us into not just more load shedding, but the incremental costs of continually accessing the highest priced electricity during peak periods.

On that I think we can agree.

The deadline for making least cost decisions was 2010 in practice. That's when the current circumstances were irreversibly locked in through gas policy and consequent effects on electricity generation.

If I were to make one big prediction it's that the next government, whichever side that is, will seek to remove the issue from mainstream attention and will do whatever it takes to do so. Money will be spent, deals will be done, any obstacles will be removed, a few rules will be bent and so on but they'll want it out of the news.

Snowy 2.0 - I reckon there's more chance of an actual Labor-Liberal coalition government than there is of Snowy 2.0 not being built. I'll be amazed if it doesn't happen at this point given that both major parties support it, contracts are signed and so on.

Battery Of The Nation - Stage 1 is almost certain in my view. Stage 2 is probable. The second half is anyone's guess - I wouldn't place any bets.

Just my thoughts.

 

[kahuna1]

Nuclear. As with coal would be a government project in practice almost certainly. Big hassle would be getting it done quickly enough - construction alone would use up most of the available time so would need a "wartime" approach where planning proceses are suspended and construction just gets going ASAP using an "off the shelf" design purchased from France, UK, USA, China or wherever. Chance of it actually happening = virtually zero.

Fantastic thread .... wow !!
Nuclear, have written a few papers over the years on this topic. Economically, it is a no go. Not even close in MW hour costs. Ignoring as smurf said the political and risk side, the economics don't work out. Not likely to either, again as he said.

Like most things, Nuclear industry has a massive lobby group in the USA and with ancient reactors. nearing or at the end of their life, they would LIKE to build new ones, lobby for it, to remove restrictions, but PURE economics no one likes to mention is the COST. Whilst my papers on this are now 10 years out of date, pointing out at the frenzy of the Uranium market, new reactors DO NOT ECONOMICALLY work out, things have not gotten any better. Worse if anything.

Outside an ultra low cost labor nation like China or India, construction costs are horrendous and make the whole project ignoring other fears, totally uneconomic. Nuclear whilst a great power source for peak loads and constant power, its NOT able to compete with other things outside China or say India if they steamroll the construction.

Nuclear will always be a part of Australia, not for power generation, but for essential nuclear medicine needs. We need Lucas Heights and will need something for these applications for the foreseeable future. Lucas heights is not about power generation ... but research and the Medical side of the equation.

Battery stuff, and stored energy with renewable s interest me greatly as the future, and thanks for the posts here and learning from masters !!

Some other forms, again with fleas, but massive potential are a maybe for the future. Whilst say building a solar farm in central Australia is good, transmission of that electricity becomes and issue and a DC system would need to be built. So too catching the roaring 40;s wind off the coasts of WA and SA, again a very long way from consumers.

Tide and wave power interest me but, again, a nightmare in some cases politically. I do like another one of storing the power via a similar way to Snowy 2 power of pumping water back uphill during peak production times and when prices are low and demand also, but this one built on the coast and in effect pumping the sea water from either wind or wave electricity generation, pump water up a cliff to a storage tank on a hill when its not needed, and then when it is needed, like a dam, the water is released back down, generating electricity.


Looking at COST per MW hour generation costs ARE ... actually wrong in most cases. A hydro system built 50 years ago, has been paid off to a great extent, a nuclear reactor 40 years old, same thing, and the tendency of the coal and self interest groups is to IGNORE ... the NEW cost of production whilst bagging other alternatives to push their own agenda. As such I tend to treat a lot of the estimates at cost per MW hour with great caution. Extreme in fact when compared to alternatives. One is forced to use today's costing, the other, often from 40 years ago and just the current running costs are used !!

All pie in the sky stuff with the political climate even here what it is. Thanks for the great posts again.

Cheers

 

[rederob]

Snowy 2.0 - I reckon there's more chance of an actual Labor-Liberal coalition government than there is of Snowy 2.0 not being built. I'll be amazed if it doesn't happen at this point given that both major parties support it, contracts are signed and so on.

Building Snowy2.0 sounds like a good idea.
But who has seen the business case?
Shorten has not.
In fact nobody outside a select few in the Coalition and at Snowy have the numbers at hand.
The energy modelling that allows for Snowy2.0 to be viable is also nowhere to be seen. So Shorten got Snowy2.0 dead right, "It's sort of like the government is going to give you a battery with no plug, because they won't back in renewable energy."

But if the "plug" is going to be built before Snowy2.0 and actually incorporates storage at source - at about a 95% conversion factor of energy into the battery - it is more efficient than pumped hydro which achieves an optimistic conversion factor of 85%.
Aside from the dodgy economics, the logic to the project is unsound.
I personally am disgusted that our government can be so cavalier with taxpayer monies that it has already committed $1.38b to Snowy2.0 on the PM's belief that it's a good idea.
If it's such a good idea, why were we never shown how it stacked up?

If Labor gets in, I hope they run the numbers for Snowy2.0 against forward projections for the price of electricity in a renewables+storage (literal) energy landscape. The project will prove to be one massive white elephant.

 

[rederob]

Whilst say building a solar farm in central Australia is good, transmission of that electricity becomes and issue and a DC system would need to be built. So too catching the roaring 40;s wind off the coasts of WA and SA, again a very long way from consumers.

Not really problems given there are proven examples of HVDCs in excess of 2000km.
South Australia is to renewables, via energy potential, as Saudi Arabia has been to fossil fuel delivery.

 

[Smurf1976]

Building Snowy2.0 sounds like a good idea.
But who has seen the business case?
Shorten has not.
In fact nobody outside a select few in the Coalition and at Snowy have the numbers at hand.

That is certainly true but on the other hand, pretty much every significant participant in the industry would have a pretty good idea via their own modeling. Some pretty serious effort gets put into that sort of thing.

In practice big industry, unions and Labor could get that sort of information off the back of the proverbial truck if they really wanted it. Same with anything really.

As for the issue, well there does seem to be a pretty fundamental shift in thinking underway which amounts to a rejection of the approach taken over the past 25 or so years. That's not surprising since I don't think there's anyone, other than those with a vested interest in it, who would seriously argue it has worked well.

 

[rederob]

In practice big industry, unions and Labor could get that sort of information off the back of the proverbial truck if they really wanted it. Same with anything really.

When you are tendering for contracts from government you do not worry about project economics - just about winning the job and getting paid!

Here is a recent and massive Report on the case for Snowy2.0 which fleetingly covers renewables in various chapters.
I had used a 15% energy loss, however "Snowy 2.0 is proposed to have a cycle efficiency of 76%" (page 58), so it's calculated here at 24%. As I said previously, the energy loss from renewables directly into grid-scale battery is about 5%.
The Report is so poorly based in terms of attempting to reflect the emerging energy landscape that if I had commissioned, I would not have paid for it.
A detailed critique is here.

 

[Smurf1976]

When you are tendering for contracts from government you do not worry about project economics - just about winning the job and getting paid!

That is true but same with anything.

Someone tendering for a contract with Smurf Enterprises has no real reason to be worried about whether I make a profit out of it so long as I pay the contractor for their work.

As for the issue, well there's an ideological divide that won't be solved anytime in the next 30 years I expect.

 

[rederob]

As for the issue, well there's an ideological divide that won't be solved anytime in the next 30 years I expect.

Not quite sure what "issue" you are referring to here.

If it's about the economics of renewables, the debate is over. They are proven cheaper than FFs.

If it's about 100%renewables, then grid-scale storage needs to be implemented. It was benchmarked in 2018 in the USA for solar+storage as far cheaper than pumped hydro on almost any metric you choose.

If it's about Snowy2.0 then I am 99% sure the project will be an economic white elephant.
Two simple interlinked reasons include the project's failure to address pumping energy requirements, and the market distortion Snowy2.0 creates.
Example: let's assume Snowy2.0 runs for 6 hours at capacity and cranks out 12GWh of electricity.
It will need to plug in to off-peak spinning (or whatever other excess is available), drawing some 15GWh from the network. To put that into perspective, that is equivalent to what Victoria, Queensland and NSW combined required to meet their demand between 6am and 7am today. The pumping requirement itself will be difficult to achieve - or draw - from excess capacity during summer and winter peaks. So what was supposed to be pumping based on low cost off-peak will cease to be the case. But the real problem arises with displacement effects of regularly running Snowy2.0 which turns it from a battery into a generating behemoth at 2GWh (again, that's the present load requirement for Tasmania and South Australia combined from 6am to 7am this morning).
Market pricing will have a new dynamic where off-peak will barely exist in the south east of the continent, and separately a massive share of private sector power generation will have to close down each day to keep the government's Snowy2.0 in the picture. The problem with the picture is that Snowy2.0 was not conceived to be a key market generator, but unless it is, it will never deliver a return.
A third reason, acknowledged by everyone who read the linked Report, is that it presented costings for renewables which were overstated, while for other battery energy storage systems the metrics were so outdated as to be useless. For example the unsubsidised LCOS/MWh for a flow battery of US$373–950 (see Table 8) versus Lazard's current US$115 - 167 (or for Lithium at US$108-140).

If it's another "issue" I am sorry I missed it.