The future of energy generation and storage

[sptrawler]

Now it's the US' turn:

U.S. Power Crisis Leaves Millions Cold, Dark as Blackouts Expand

China, France, Japan, US.....

There's a pattern here with all experiencing the same basic phenomenon in recent weeks. That of physical electricity shortages combine with natural gas trading at huge prices an order of magnitude higher than normal.

As has been noted previously, there are many places where infrastructure is stretched and which are thus vulnerable to such incidents, including some areas in which ASX-listed companies operate in this sector.

It is times like this that people realise how important electricity and gas is, catering for periods like this with renewables, will be extremely challenging for storage capacity.
It is difficult for solar panels when under a foot of snow and there is very little wind to drive iced over wind turbines.

'Truly unprecedented': Acropolis, Parthenon and Temple of Zeus blanketed by snow as cold snap hits Athens

Thick snow covers Greece's capital Athens as a cold spell sweeps through the country, causing blackouts, disrupting travel and halting COVID-19 vaccinations.

www.abc.net.au

 

[Smurf1976]

It is times like this that people realise how important electricity and gas is, catering for periods like this with renewables, will be extremely challenging for storage capacity.

With present technology it's really down to three options - fossil fuels, large scale hydro or at a stretch economically, nuclear.

I generally avoid the politics but this time I'll say it - the fossil fuel lobbyists will do all they can to stand in the way of big hydro projects for that reason. Expect to see a few fake "environmental" groups spring up and raise objections....

 

[SirRumpole]

With present technology it's really down to three options - fossil fuels, large scale hydro or at a stretch economically, nuclear.

I generally avoid the politics but this time I'll say it - the fossil fuel lobbyists will do all they can to stand in the way of big hydro projects for that reason. Expect to see a few fake "environmental" groups spring up and raise objections....

I'm surprised that the nuclear lobby hasn't been more active.

You would really expect the Greenies to be in favour. No carbon emissions to speak of, plenty of land to bury the waste, and plenty of the fuel on our land.

The weapons issue can be dismissed by proper inspections from world authorities.


Sure it's expensive but there is no reason it can't be part of the mix. It should at least be considered instead of being dismissed out of hand.

 

[Smurf1976]

Sure it's expensive but there is no reason it can't be part of the mix. It should at least be considered instead of being dismissed out of hand.

Ideologically I'm not opposed.

I am however very confident that a combination of wind, solar, batteries and hydro can beat it on cost so long as it's approached efficiently.

If it's deliberately stuffed up however well then that does leave fossils or nuclear as the only option.....

Sites for future nuclear power stations were identified in most states many years ago by the way. They fall into two categories - they're either commuting distance from the capital CBD or they're as far as possible away from it whilst still being practical. In some cases some preliminary work was done with geological assessment and so on but one did get as far as pouring some concrete.

In Victoria's case it's illegal to even propose the idea by the way. That's not just a ban on building it, it's a ban on proposing to do so. That's been around for years, it's nothing new. Doubt anyone would enforce it but technically the law exists unless it has been repealed.

 

[sptrawler]

With present technology it's really down to three options - fossil fuels, large scale hydro or at a stretch economically, nuclear.

I generally avoid the politics but this time I'll say it - the fossil fuel lobbyists will do all they can to stand in the way of big hydro projects for that reason. Expect to see a few fake "environmental" groups spring up and raise objections....

Imagine the cost, for the amount of hydro you would need to overcome the weather conditions currently being experienced in the U.S and Europe and I didn't mention pumped in hydro because there would be no electricity to pump it up the hill. ?
Rolling blackouts is the order of the day.

So when you say nuclear is expensive, as you know cost isn't an issue if you need it and if the lights go out so does the cost constraints.
Pumped hydro and batteries might work in Australia, with favourable weather conditions, a large land mass and a small population, but that isn't the case everywhere.

 

[sptrawler]

I'm surprised that the nuclear lobby hasn't been more active.

You would really expect the Greenies to be in favour. No carbon emissions to speak of, plenty of land to bury the waste, and plenty of the fuel on our land.

The weapons issue can be dismissed by proper inspections from world authorities.


Sure it's expensive but there is no reason it can't be part of the mix. It should at least be considered instead of being dismissed out of hand.

Maybe only allow thorium reactors, limit the sale of uranium?

 

[SirRumpole]

Maybe only allow thorium reactors, limit the sale of uranium?

As far as I know there are only a few research reactors so far, but it might be worth an investment in an experimental one , preferably in cooperation with other countries to share the cost to see if it can be useful.

 

[Smurf1976]

Pumped hydro and batteries might work in Australia, with favourable weather conditions, a large land mass and a small population, but that isn't the case everywhere.

Agreed - my comments are Australian-centric given it’s an Australian forum.

Locally in Australia we can shine, blow and dam our way to power most certainly but there are some places overseas where that isn’t an option.

Biggest problem in most places, and that includes parts of Australia especially Victoria, is winter. Worst time for solar and highest overall energy use. It’s not impossible to do it but it needs some serious storage capacity yes.

 

[Smurf1976]

Messing with Texas: The Lone Star state’s power grid is working exactly as designed

On President’s Day, many in Texas received an unexpected “gift” that was even less welcome than a day filled with discount mattress ads, as the state was plagued by a series of rolling blackouts. The outages came on a day when the southern U.S. is...

www.dailykos.com

Replace the word "Texas" with "Victoria", "NSW" or "SA" and apart from some minor details about interconnection and that we don't have nuclear in Australia, the rest and the basic thrust of the article is exactly the same. Built to be barely adequate and not even slightly more - hence the companies getting fired up at the idea of government building capacity since doing so then undermines their own economics.

 

[Smurf1976]

For those in WA, the Tasmanians have taken over Rottnest Island.

Well, taken charge of the power supply on it at least, WA still owns the actual island.

There's a nice graphical display here which shows how it's all working in real time - wind, solar, diesel and the desalination plant.

https://www.hydro.com.au/clean-energy/hybrid-energy-solutions/success-stories/rottnest-island

 

[sptrawler]

I would guess the Queensland Government, will be installing some serious batteries soon.

Coal generators fined after failing to match big batteries and putting grid at risk

Owner of two Queensland coal generators fined for failing to deliver grid services as promised, including in one incident when the power supply was put at risk.

reneweconomy.com.au

From the article:
The Queensland state government owned generation company CS Energy has been heavily fined after units at two of its ageing coal generators failed to deliver crucial grid services at various events the last two and a half years, and very nearly caused widespread blackouts in the sunshine state in one of them.
The Australian Energy Regulator says CS Energy has paid $200,000 in penalties for allegedly failing to ensure it could provide frequency control ancillary services (FCAS) that it had offered to the market. It has also repaid $1.3 million it received as payment to provide the services it failed to deliver.

FCAS helps manage the stability of the power system – responding to sudden variations in supply and demand – and play a crucial role in keeping the lights on for customers.

The FCAS market was once dominated by coal and gas generators, but big battery installations – as well as small batteries aggregated in what are called virtual power plants – have grabbed a major share of the market since they first appeared on the grid in late 2017.

Queensland, however, does not have any big battery installations – although one is being built at Wandoan (100MW/150MWh) and many more are planned. That means that the state is still dependent mostly on coal generators to provide FCAS, but there was been increasing concern about their ability to do so.

 

[sptrawler]

It sounds as though there are plenty of renewable projects in the pipeline, the transition is certainly gaining a head of steam.

Australia’s battery and hydrogen storage pipeline jumped by massive 20GW in 2020

Number of battery storage and hydrogen electrolyser projects in Australia soared in 2020, rivalling that of solar PV and wind energy as developers bet on a rapid transition to renewables.

reneweconomy.com.au

From the article:
The number of battery storage and hydrogen electrolyser projects in Australia soared in 2020, with the capacity pipeline now rivalling that of solar PV and wind energy as developers bet on a rapid transition to a renewables-dominated grid.

New data released by the energy consultants Rystad Energy shows that 19.2GW of battery storage and hydrogen electrolysers (which can also offer storage capabilities) were added to the project pipeline in Australia last year.
This number beats utility scale solar, which added 17.5GW of new projects, and came in just behind wind energy (21GW). In total, there is a pipeline of 225GW or renewable and storage projects jockeying for a position on the grid, although it is clear that not all will get over the line.

https://reneweconomy.com.au/wp-content/uploads/2021/02/FIG-1-project-proposal.jpg
The big increase in both battery storage and electrolyser proposals is significant, particularly as low wholesale prices cast doubt about the future of many coal fired generators, and as most utilities and institutions expect an even more rapid shift to renewables than had previously been predicted.
The battery storage projects will get a fillip with the introduction of 5-minute trading later this year, and the re-write of market rules that will open up yet more revenue opportunities for the range of services they can provide.
However, electrolysers at scale will take longer to roll out, mainly because the technology is new and the costs have not yet fallen to where the economics are easy.

Still, state governments are aiming high, seeing hydrogen as an opportunity to produce two or up to six times wind and solar needed for local grid demand, while Andrew Forrest has extraordinary plans to deliver up to 1,000GW around the world and 50GW in the Pilbara region of W.A., which is off the main grid.

 

[sptrawler]

Victoria finally starting to move ahead with renewables.

Under pressure: coal-fired power plants feel the heat from renewables

Experts say a surge in new renewable energy projects has shortened the odds of Victoria’s giant coal-fired power plants closing sooner rather than later.

www.theage.com.au

From the article:
Victoria University energy expert Bruce Mountain told The Age that recent events showed brown coal generation was in trouble and the challenge for the state government was to ensure enough alternative power sources were available to replace the enormous capacity of the three Latrobe Valley stations.
“On brown coal closure, the odds are shortening on it happening sooner rather than later,” Professor Mountain said.
“State governments need to get their skates on.

​

“It’s not panic stations, but the thrust of government policy must be to bring in alternative sources quickly.”

Victoria’s Environment Minister Lily D’Ambrosio last week launched the latest phase in the state’s $540 million effort to reboot its electricity grid. The system was originally designed around large-scale coal stations and has struggled to accommodate all the renewables projects waiting to connect.
“When we’re done, Victoria’s renewable energy zones will be home to 16 gigawatts of capacity – the equivalent of putting solar on every roof in Victoria,” Ms D’Ambrosio said.

“As our ageing coal-fired generators reach the end of their service lives, our long-term climate and energy targets provide the market with much-needed certainty to enable a well-planned transition to clean energy.”

 

[basilio]

In WA Liberal and Labour are fighting over who can offer the most advanced renewable energy policy. The current Labour Government has put some further chips on the table. The joining of Solar, Hydrogen electrolysers and battery storage in 1000 locations across the state to boost local manufacturing as well as energy reliability

Labor promises 1,000 stand-alone solar, battery and hydrogen microgrids​

By Sophie Vorrath February 18, 2021 Battery/Storage, Other Renewables, Policy, Solar 0 Comments

Image: Western Power
Western Australia’s Labor Party has announced plans to both build and install 1,000 standalone power systems – or SAPS – including solar, battery storage and hydrogen electrolysers across its grid over the coming five years, as part of a $259 million policy package to boost green manufacturing in the state.

The new policy package, which will also put $10 million towards local wind turbine manufacturing, was announced by the McGowan government on Wednesday, after it scrambled to deal with the Liberal Opposition’s refreshingly ambitious New Energy Jobs plan that includes a zero emissions grid by 2030.

Labor promises 1,000 stand-alone solar, battery and hydrogen microgrids - One Step Off The Grid

Western Australia to build and install 1,000 standalone power systems including solar, battery and hydrogen electrolysers, to replace poles and wires and diesel gen-sets, and boost the state's green manufacturing sector.

onestepoffthegrid.com.au

 

[sptrawler]

A new HV transmission line from Mt Isa to Townsville 1,100klm and costing $1.4b, that is a serious project.

Contractors sign on to start work on Copperstring 2.0 transmission lines

The proposed $1.5 billion, 1000 km high-voltage transmission project linking Mount Isa to Townsville is the biggest extension of the NEM in decades.

reneweconomy.com.au

 

[Smurf1976]

A new HV transmission line from Mt Isa to Townsville 1,100klm and costing $1.4b, that is a serious project.

In short there's been a lot of unhappiness among the mining industry there about the price of natural gas and thus electricity produced from it, that being the source of 100% of the area's power at present.

 

[basilio]

One of the key issues with the rapid expansion of rooftop solar has been the effective oversupply of solar power during the day.
So where does this excess energy go ?

In theory home owners could buy their own battery storage (or perhaps store it in their electric car battery ??) However the Victorian government is establishing a model of local community owned battery banks to smooth out excess solar power and help stabilise the system. Looks good !

Victoria to fund "neighbourhood-scale" battery projects up to 5MW - One Step Off The Grid

Victorian government to fund series of “neighbourhood-scale” battery demonstration and pilot programs, to unlock the role shared storage can play on modern grid.

onestepoffthegrid.com.au

 

[sptrawler]

It looks as though the situation we have been preempting since early in this thread is coming to fruition.
The choices will have to be made, whether people want clean power, expensive power or reliable power IMO.

Coal-fired power plants in peril as prices plunge

Most of Australia’s coal-fired plants are running at a loss as energy prices crash, sparking warnings about early closures.

www.smh.com.au

From the article:

Most of Australia’s coal-fired power plants are running at a loss as electricity prices continue to slide, battering the profits of energy giants AGL and Origin and sparking warnings from within the industry of earlier-than-expected plant closures.

An influx of renewable energy has been driving down daytime electricity prices and piling enormous pressure on the nation’s fleet of coal-fired power stations, which are far more expensive to operate and, increasingly, struggling to compete.

New figures reveal baseload electricity prices in Victoria have crashed 70 per cent from about $80 a megawatt-hour in March 2020 to $24 this month. In New South Wales, prices have more than halved to $38.
“The price falls would place most baseload thermal generation into negative profitability,” JPMorgan analyst Mark Busuttil said. “An announcement of capacity closures could come any day.”

Industry sources, not authorised to speak publicly about internal discussions, confirmed meetings were held last week about the severity of the situation and there was now a “consensus” that at least one coal plant was likely to close its doors in response to unsustainable prices and spiralling losses.
“I think the first one is the inflexible baseload plant would be at risk, but that’s probably as far as I’d go to speculate which plant comes out,” Origin Energy chief Frank Calabria said in February. “I just think it’s actually going to be a pretty messy period of time.”

“This lower-price environment will put pressure on existing generation in the market, while new generation build will increasingly rely on government contracts.”
Mr Busuttil said an earlier-than-scheduled coal plant exit would curtail supply and help elevate prices for those that remain. But he said all plant owners were at risk of bringing forward closure dates.

“They are all jockeying for position, saying we are in a better position than the plant next door and we are going to wait for the worst plant to close first,” Mr Busuttil said. “It’s like a game of chicken at the moment.”

While large energy providers are obliged to provide three years’ notice before closing a power plant, Mr Busuttil said governments could not force asset owners to operate at a loss. “We are a little bit in uncharted waters,” he said.

Origin’s black coal-fired power station in Eraring, NSW, is considered one of the most flexible in the market and can operate at a minimum output of 30 per cent. Mr Calabria said Origin expected to reduce Eraring’s future output. “We have to do enough to keep capacity available when it’s needed and manage within the flexible window of that asset,” he said.

 

[Smurf1976]

It looks as though the situation we have been preempting since early in this thread is coming to fruition.
The choices will have to be made, whether people want clean power, expensive power or reliable power IMO.

Suppose that you open a restaurant. The rules will be as follows:

1. All customers who turn up must be allowed in and provided with a seat at a table without delay.

2. You may take bookings but cannot insist upon them. You can never turn away a customer who simply walks in, and must promptly seat them at a table.

3. You cannot charge for use of the table or seat, only for food and drink supplied by you.

4. All food orders must be fulfilled without alteration and in a timely manner.

5. BYO drinks are permitted.

6. BYO food is also permitted.

7. If a customer turns up with more food or drink than they require, you are required to purchase the rest at a price higher than your wholesale supply cost, and regardless of whether or not you need that product.

Anyone willing to have a go at running this restaurant?

 

[Smurf1976]

Industry sources, not authorised to speak publicly about internal discussions, confirmed meetings were held last week about the severity of the situation and there was now a “consensus” that at least one coal plant was likely to close its doors in response to unsustainable prices and spiralling losses.

For those not familiar with the technical aspects I'll add that a closure doesn't have to be absolute.

Most thermal (fuel burning) power stations are comprised of multiple complete sets of generating equipment (in industry terminology simply "units") which operate independently of each other.

It's not out of the question to close some units at a power station and not others, thus retaining it as a working site just with a lesser workforce and other costs.

Also it's not impossible to mothball plant rather than outright closing, thus retaining the option to resume operations if required.

Another variant on that is seasonal operation. In practice that means simply shutting down at the end of the highest demand period and simply not intending to run again until some later time.

Another variant is to take a 4 unit station (most large thermal power stations are 2 or 4 units in practice although other numbers do exist) and deliberately run it as a "firm" 2 units. That is, keep them all able to operate but only run two at a time - if one breaks down or needs to be taken off for maintenance then put another one on. That effectively means you've got a 2 unit station but it's 100% reliable - which then means you don't need to financially take risk or hedge against failure when you've got your own backup sitting there.

So there's quite a few options available apart from the obvious one of outright total closure.

Some past examples:

Hazelwood (Vic, closed 2017) comprised 8 separate generating units. During the 1990's one was left unrepaired following a major failure, two others were mothballed and another was used only as backup to the 4 that were being run. So a combination of deferring maintenance, mothballing and deliberately running only 4 of the available 5 units. When demand and prices picked up, all were progressively put back into full operation. Capacity was 200 MW per unit, coal-fired steam.

Newport D (Vic, still operational) is a single unit station with gas-fired boiler. It was mothballed completely for a couple of years ~ 20 years ago. Capacity is 500 MW, gas-fired steam (oil-fired backup).

Munmorah (NSW, closed) originally comprised 4 units. Two were shut circa 1990, the other two were run until mothballing in 2010 and final closure in 2012. Units were 350 MW each, coal-fired steam.

Bell Bay (Tas, closed 2009) had both units mothballed in 1991, returned both to operational status in 1998 without any real operation apart from a test run, then operated intermittently from 1999 through to closure of unit 1 in 2008 and unit 2 in 2009. Units were 120 MW each, gas-fired steam plant (oil-fired prior to conversion 2002 and 2003).

At present, Torrens Island A (SA, owned by AGL) has units 2 & 4 mothballed and units 1 & 3 still in operation, with plans to mothball unit 1 later this year and to mothball unit 3 and thus the entire station in 2022. That's mothballing not outright closure though, a return to operation at a future time would need staff and a thorough inspection of the plant but as with Bell Bay it could be done.

Also at present AETV (a subsidiary of Hydro Tasmania) has mothballed the Tamar Valley CCGT plant, last operation being May 2019, but continues to operate other gas-fired generation at the same site. Mothballed plant is a 208 MW CCGT (gas-fired only). Operating plant is 1 x 58 MW and 3 x 40 MW open cycle (gas / diesel fired) although in practice they're really only used as backup anyway.

Swanbank E (Qld, still operational) was mothballed in 2014 and resumed operation late 2017. Capacity 385 MW (gas-fired CCGT) although for the record the current owners have recently written it's value down to zero.

So quite a few precedents there for temporary or partial closures.

In all of that, I'll draw particular attention to the idea of mothballing or closing part of a facility but keeping part of it open or alternatively shifting to intermittent operation. Those ideas are certainly around at the moment.

Another one to mention is that the commissioning of 4 large synchronous condensers in SA soon will reduce the amount of gas-fired generation required on at a minimum. Economically that becomes simply supply and demand with a reduction in "forced" supply. Eg right now that is the case, there's 255 MW of gas running in SA at a market price that wouldn't cover even a third of the gas cost to run it. Technically essential at present but financially a dead loss.

Also I'll mention that there's the already announced Liddell closure (NSW, AGL, 2022 and 2023), the mothballing of the remaining two units at Torrens Island A (SA, AGL, 2021 and 22) and the closure of Osborne (SA, Origin, end of 2023). They could plausibly be brought forward as a relatively easy option.

On the other side of all that, there's the very real problem that NSW and Vic simply don't have adequate peak generating capacity without the coal plants. All good when it's windy or sunny, but when it isn't? There's simply no way that existing non-coal facilities could cope, not even close.

Something new could be built sure, hydro, gas or batteries, but right now that something hasn't actually been built and does not exist. That reality creates quite a problem for government if a coal plant owner does pull the pin since blackouts don't help a government get re-elected.

Solar owners in SA could be in for a shock too since on a rolling 12 month basis the average spot market value of their output has now dropped below $10 / MWh (one cent per kilowatt hour). That could get "interesting" to say the least.....

Ultimately though the electricity industry isn't going out of business, just through a massive shakeup in how business is done.

SA with 61% from wind and solar over the past 12 months is, so far as I'm aware, the actual world leader so far as any major power system in a developed country being run from wind and solar is concerned. I'll stand corrected if that's not the case, but it's definitely what many do understand to be true.

61% from wind and solar but just one point - more than 90% of all electricity consumed is still purchased from an electricity company. The vast majority of wind and solar production is ultimately put into the grid and sold to someone via the likes of Alinta, AGL, Energy Australia, Engie, Origin and so on.

Individual companies might fail and in due course the coal power stations will close one by one but the electricity industry as a whole isn't going away, indeed with the likely transition to electric transport the future is ultimately one of growth not shrinkage.