The future of energy generation and storage

[qldfrog]

A new solar farm in Numurkah, Victoria.
https://www.abc.net.au/news/2019-09-05/solar-farms-helping-revitalise-rural-towns/11481510

From the article:
The state currently has 14 large-scale renewable energy projects under construction, with a further 46 large-scale wind and solar projects in the planning stages .

Isn't it actually a terrible news considering they will have to shut production whenever it becomes worthwhile every day around noon?
We should rejoice at every energy storage project, not production
What a twisted world we live in

 

[rederob]

I think the most common misconception among the general public and in particular business was that the state utilities were inefficient and that the NEM was going to lower costs.

Might have depended who you were and where you lived.
I recall back in those days a lot of commentary about how the private sector would need to raise prices in order to generate returns to investors.
The other issue I recall was that States were reluctant to spend big money on new power plants, which put businesses at risk of load shedding events.
It seems this latter issue has carried through to the NEM as a result of the policy void relating to incentivising investment.
Gold plating wires and poles in recent years has been the curse of consumers as that investment has had a huge impact on electricity prices as the monies spent are clawed back.

A new solar farm in Numurkah, Victoria.
https://www.abc.net.au/news/2019-09-05/solar-farms-helping-revitalise-rural-towns/11481510.

This project demonstrates that solar farms can not only coexist with agriculture, but the pv panel infrastructure actually enhances plant growth for grazing (or croping). There are similar projects in many other countries where arable land is being earmarked for solar farms.

 

[sptrawler]

This project demonstrates that solar farms can not only coexist with agriculture, but the pv panel infrastructure actually enhances plant growth for grazing (or croping). There are similar projects in many other countries where arable land is being earmarked for solar farms.

I personally think it is a bit early to draw that assumption, it will take a couple of years of complete weather cycles, to be able to qualify whether it makes a difference or not. If you look at the last of the distance shots, the area surrounding the farm appears a lot more lush, there is growth under the panels, but nothing like the adjacent fields.
But it doesn't bother me one way or another.

 

[Smurf1976]

Might have depended who you were and where you lived.

I should have clarified that I was referring to politicians, business lobby groups etc.

The general public was far more skeptical and rightly so but big business and allied politicians were pretty keen on the whole thing until they realised that their costs were going up not down and then they went really quiet.

As with any issue, I never take for granted that governments or business leaders are thinking too far ahead. Sometimes they do, very often they don't, and the consequences of that are something we see all the time in the stock market (in all sorts of companies not necessarily related to energy).

 

[rederob]

If you look at the last of the distance shots, the area surrounding the farm appears a lot more lush, there is growth under the panels, but nothing like the adjacent fields.

I would hope so as this region has hundreds of irrigated farms .

 

[Smurf1976]

There's a bit of a battle going on between the coal-fired generation owners at the moment.

In one camp is the one who's actively trying to get their plant to run at lower minimum output so as to fit better with wind and solar. There's another company which has also expressed an intent to invent that wheel who'll no doubt try and do so once the first one has done it. It's the same equipment in both stations after all, so they've only got to come up with the same solution and it should work.

Meanwhile there's some others who are going flat out to maximise market share and send huge amounts of large scale solar output to waste in the process. In doing so that's also discouraging the first group who are well aware that their innovation is really only handing market share to another coal plant and not having the intended effect with renewables.

Regardless of how convinced anyone is or isn't about the CO2 issue, I doubt that anyone would seriously argue that it's sensible to waste the output of solar facilities which have already been built. Any debate there is about the merits of building them in the first place but once they're built, the cost is incurred so there's no rational reason to not be making full use of their output except when technical issues preclude it which isn't the case in this instance.

If ever there was a straightforward demonstration of Australia's policy dysfunction then this is it.

 

[Smurf1976]

There's a bit of a battle going on between the coal-fired generation owners at the moment.

I generally avoid naming companies but over the weekend some pushing of the boundaries has been going on:

Energy Australia have been running unit 1 at Mt Piper power station (coal, NSW), down below 20% of capacity at times, which is a long way below normally accepted lower limits.

Origin Energy have been doing the same with unit 4 at Eraring (coal, NSW) running down to about 29% of capacity which is also rather low with the rest of the station operating normally.

Running coal plant at low output is problematic for a number of reasons, not least of which is that great big boilers with little coal fires in them have a habit of ending up without a flame which is obviously not the desired outcome. In addition there's issues with temperature, pressure and so on.

Being able to push the boundaries, get down to lower output levels, makes these existing plants more useful in conjunction with variable energy sources such as wind and solar, thus saving emissions and also saving the companies money. In EA's case there's also the not insignificant point that one of the problems they have with this particular coal-fired power station is a shortage of coal.

So there's a bit of a different thinking in all of this. Some trying to get lower output. Others in the supposed sunshine state intent on making sure the sun doesn't displace coal as a source of electricity. Hmm.....

 

[sptrawler]

I generally avoid naming companies but over the weekend some pushing of the boundaries has been going on:

Energy Australia have been running unit 1 at Mt Piper power station (coal, NSW), down below 20% of capacity at times, which is a long way below normally accepted lower limits.

Origin Energy have been doing the same with unit 4 at Eraring (coal, NSW) running down to about 29% of capacity which is also rather low with the rest of the station operating normally.

Running coal plant at low output is problematic for a number of reasons, not least of which is that great big boilers with little coal fires in them have a habit of ending up without a flame which is obviously not the desired outcome. In addition there's issues with temperature, pressure and so on.

Being able to push the boundaries, get down to lower output levels, makes these existing plants more useful in conjunction with variable energy sources such as wind and solar, thus saving emissions and also saving the companies money. In EA's case there's also the not insignificant point that one of the problems they have with this particular coal-fired power station is a shortage of coal.

So there's a bit of a different thinking in all of this. Some trying to get lower output. Others in the supposed sunshine state intent on making sure the sun doesn't displace coal as a source of electricity. Hmm.....

A lot depends on the type of mills they are using, ball tube, rotating table bowl or rotating hammer pulverizer, the turn down ratio is very different on each type. Also the style of boiler, front fired, corner fired, fuel support etc can make a difference.
But running coal boilers at really low load and keeping a stable flame is awkward, as you say, it is easy to snuff it out.

 

[sptrawler]

A good article, that re iterates what smurf has been saying, it shows we are on our way but there is a way to go.

https://www.abc.net.au/news/2019-09...not-help-consumers-in-the-short-term/11485614

 

[Smurf1976]

A good article, that re iterates what smurf has been saying, it shows we are on our way but there is a way to go.

Almost certainly there's going to be some "burned" participants from a financial perspective with all of that. Many of the wind and solar owners seem to have gone in on the basis that electricity was electricity, anytime anywhere, and a few didn't even have trading rooms of any sort.

No doubt they'll be having a rethink on some of that in view of more recent happenings with prices going below zero. Happened over the weekend in SA by the way.

 

[Smurf1976]

I'll post it here since it affects all companies in the industry and the spot price too but suffice to say some more drama in Victoria.

Loy Yang A (owned by AGL), the largest power station in Victoria, is currently three quarters shut down.

Unit 2 = major failure earlier this year.

Unit 1 = off for maintenance etc.

Unit 3 = shut down in an orderly manner on Monday 16th September. Not sure exactly what happened but it was an orderly shut down not an abrupt halt so it'll be a fixable problem.

That leaves unit 4 as the only operational part of the plant.

The lights aren't about to go out but that's really down to good luck in that there's decent wind generation in Victoria, demand is moderate due to temperatures and there's plenty of supply from other states especially SA.

A short time ago, supply to Victoria by source:

Loy Yang B (fully operational, coal, Alinta) = 23%
Yallourn (three quarters operational, coal, Energy Australia) = 23%
From SA = 13%
Loy Yang A (one quarter operational, coal, AGL (ASX: AGL)) = 11%
Newport D (fully operational, gas, Energy Australia) = 10%
From NSW = 8%
Wind (various owners) = 8%
Murray 1 & 2 (hydro, Snowy Hydro) = 4%
West Kiewa (hydro, AGL (ASX: AGL)) = 0.7%
Hume (Meridian Energy (ASX: MEZ)) = 0.6%

Rounded to the nearest 1% except those below 1% rounded to the nearest 0.1%. Figures don't add to 100% due to rounding.

To have Newport D running to its absolute limit in the middle of the night, or to have any hydro generation at all on in Victoria apart from Hume (needed to keep the Murray flowing), is unusual.

Also unusual to have maximum transfer from SA to Vic in the middle of the night and burning gas to generate the power - the plants doing that being owned by Engie, Origin Energy (ASX: ORG) and AGL and located on the outskirts of the Adelaide metro area. That's in addition to the very substantial output from wind generation in SA - right now it's equal to 79% of consumption within SA so the reason for running so much gas-fired plant is about supplying Victoria mostly.

I don't know what AGL's hedging position is but I'd be surprised if they weren't incurring any pain at all with the situation at present in Victoria. They're doing somewhat better elsewhere, particularly NSW, however. Worth adding there that the coal being burned by Alinta in Victoria is 100% supplied by a mine owned and operated by AGL.

Companies where I haven't indicated the stock code are not listed. Snowy Hydro is Australian Government owned and the rest are foreign governments or private (non-listed).

Not mentioned but also of relevance is the major outage of half of Mortlake power station (Origin Energy) and the disconnection due to problems in Victoria of all transmission to and from Tasmania until mid-October. Of less consequence there are also generating units out of service at Somerton (gas,

 

[basilio]

That is an absolute knife edge of power supply for Victoria Smurf. A pleasant (not too hot/cold) , sunny, windy spring day in Vic basically keeping us in power.
Many of the base load coal stations are out of commission for a range of reasons - some quite serious.

Sounds like a case for serious energy conservation as well as accelerated wind and solar installationa and storage capacity.

But we knew that all along didn't we ?

 

[SirRumpole]

Renationalise the energy grid ?

Some experts think it's a good idea, (and a lot of voters do too, but we don't really count do we ?).

https://theconversation.com/the-case-for-renationalising-australias-electricity-grid-73951

 

[Smurf1976]

That is an absolute knife edge of power supply for Victoria Smurf. A pleasant (not too hot/cold) , sunny, windy spring day in Vic basically keeping us in power.
Many of the base load coal stations are out of commission for a range of reasons - some quite serious.

It could all be summarised as saying three things really:

1. There's not enough capacity installed in Victoria to ensure reliability, thus leading to a situation where something goes wrong and creates a very precarious situation. The same sort of fault if it happened in WA or Tas would be a nuisance and a cost to fix it but that's all.

2. As plant gets older, and in some cases is now old as such, reliability tends to fall.

3. That there hasn't been a supply disruption comes down to sheer luck that the timing of these problems has been when demand is low or moderate. It would be unwise to count on such luck continuing indefinitely however......

My main point in posting it is to say that if you're investing in this sector then be sure to understand what you're really investing in. What assets the company has, what risks they're exposed to, etc. Given that wholesale electricity prices are known to spike more than 100 fold on occasion and can also go negative, anyone exposed to the spot market does have a significant degree of risk associated with that. It's not like say wheat or oil where you can be reasonably sure of roughly what price you'd pay if you needed to buy on the spot market, worst case it doubles or something like that, whereas electricity is several orders of magnitude more volatile.

 

[Smurf1976]

ExxonMobil to sell all its operations in Bass Strait:

https://www.abc.net.au/news/2019-09...th-east-victoria/11524416?WT.ac=statenews_vic

As by far the largest supplier of gas to the combined NSW, ACT, Vic, Tas and SA market, this has implications for:

BHP in particular since they are the joint venture partner in the Bass Strait oil and gas fields.

Anyone who buys gas directly from producers. That is, gas retailers, power stations and the largest industrial users.

Depending on how it all unfolds it may also have implications for other energy companies which either produce alternatives to gas (eg they generate electricity from coal or solar) or which plan to import LNG to Vic, NSW or SA (or theoretically Tas but there's no current proposal to do so there).

Plus likely political implications.

Whether or not they can find a buyer will be the big question. Personally I wouldn't be counting on that - it's a very risky thing to be going into at this point in time, on the cusp of major production decline, given the political risk.

 

[sptrawler]

There could be a bit of carrot and stick motivation in the pipeline, hopefully some concessions and subsidies to counteract it.

https://www.smh.com.au/politics/fed...n-t-cope-with-more-solar-20190925-p52uvv.html

From the article:
Consumers are already doing their part and investing in their own rooftop energy generation but distribution networks are not moving quickly enough to realise the value of those investments," Mr Pierce said.


The AEMC's economic regulatory framework review found a system that does not provide consumers with choice or reward supportive behaviours could drive up costs .
Customers in NSW and Victoria are already battling energy price rises of up to 10 per cent a year.

"Failure to act now would mean either fewer people are able to export solar to the grid, or all consumers will pay more to build new substations and poles and wires that are rarely needed," Mr Pierce said.

The regulator's concerns echo those of the government-backed Clean Energy Finance Corporation. The $10 billion green bank is increasingly shifting its focus away from new renewable technologies towards bolstering the grid so that renewables can be transmitted.

Would you like pink batts, with your batteries.

 

[SirRumpole]

Traditional power companies feel the heat from solar.

https://www.abc.net.au/news/2019-09...synergy-posts-massive-financial-loss/11550420

 

[Smurf1976]

There could be a bit of carrot and stick motivation in the pipeline, hopefully some concessions and subsidies to counteract it

The big problem with this whole issue is summed up not in the article you linked but in the link itself:

smh.com.au/politics/federal

There's the problem. An engineering issue which comes back to fundamental physics and exists at a very local level, street by street, but we in Australia insist that it's political and federal when it ought be neither.

Same applies right across the spectrum of everything involving this issue from the supply of oil and gas through to transmission line capacity. Far too much politics and far too little focus on the actual issue as such.

At a much smaller but practical level my new Sanden heat pump is working nicely. An 80% energy saving for water heating so can't complain about that.

Not to be outdone though, my next step will be to link its operation to the existence of surplus solar power. If there's large scale solar being turned off during the day, and that happened again today in SA, then it makes sense to be doing non-time critical things like heating water during those times. Won't likely save me any money but I'm keen to push the concept so am looking at practical means by which to do it automatically.

 

[sptrawler]

I was thinking the only obvious way to mitigate the problem, in the short term, is to encourage domestic battery installation.
The difficulty with that is the cost of the batteries, the saving vs payback of the capital as a ratio of the life of the battery.
People aren't going to spend $10k on batteries, that take 20 years to pay for themselves and only last 10 years before they need replacing.
So that screams Government intervention one way or another, they either subsidies the batteries, or spend a lot more money on transmission and distribution.
Just my opinion.

 

[SirRumpole]

People aren't going to spend $10k on batteries, that take 20 years to pay for themselves and only last 10 years before they need replacing.

As opposed to solar panels with about the same lifetime ?