The future of energy generation and storage

[basilio]

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.

Excellent summary Smurf. Seems flexible and creative.

But back to the economic world of businesses that own these plants. Will these owners consider a partial shutdown of some plant units? Does the business model give enough profit to have it happen ?
Could a government offer some incentive to ensure flexibility and power certainty as a back up but push renewable energy sources as the overriding priority ?

 

[SirRumpole]

Could a government offer some incentive to ensure flexibility and power certainty as a back up but push renewable energy sources as the overriding priority ?

IIMHO governments should build and own peaking power plants like CCGT stations to run at times when they are required.

They can start up fast, use a variety of fuels and be relatively cheap to run.

The reason governments should own them is that private enterprise would be reluctant to build them as they would only be used intermittently
and would therefore want to ramp the prices up.

I suspect that they would be a lot cheaper to construct than large scale hydro, but they could obviously pump the water uphill of a hydro plant when required.

 

[sptrawler]

IIMHO governments should build and own peaking power plants like CCGT stations to run at times when they are required.

They can start up fast, use a variety of fuels and be relatively cheap to run.

The reason governments should own them is that private enterprise would be reluctant to build them as they would only be used intermittently
and would therefore want to ramp the prices up.

I suspect that they would be a lot cheaper to construct than large scale hydro, but they could obviously pump the water uphill of a hydro plant when required.

My guess is that will be the likely outcome, the chances of having no at call fuel backup, is very close to nill IMO.
But as you say there will be very little money to be made, while it is sitting around offline, so as you say it makes sense to be government owned.
We are getting to the pointy bit, where there isn't enough renewable and storage to run the grid 24/7 and there isn't enough money in running fossil fueled plant.
So as we have said over and over again, it will be self resolving, either the private sector generators will ramp up their transition to renewables, or they will lose market share.
My guess is they have been sitting back waiting for a government handout like the NBN, to pay them to change over to renewables, accelerated depreciation, government incentives, co contributions etc.
When in reality they have been in the business for years, they have been making money for years, they should change their plant not the taxpayer IMO.
The time is fast approaching when the staring game is over, I don't think the government is going to blink first and the main generators are running out of time.

 

[Smurf1976]

They can start up fast, use a variety of fuels and be relatively cheap to run.

There's a compromise to be made there.

In order best to worst:

Fuel efficiency: Combined cycle / internal combustion / open cycle.

Startup time: internal combustion / open cycle / combined cycle.

Cost to maintain: open cycle / internal combustion / combined cycle.

Cost to build: open cycle / internal combustion / combined cycle

Operational range (ability to operate at reduced output): Internal combustion / open cycle / combined cycle.

Combined cycle wins on fuel cost and emissions but doesn't win on anything else. Hence the industry's lack of interest in it - of the 4 combined cycle plants in south-eastern Australia (NSW, Vic, Tas, SA) one is mothballed, one is rarely operated with closure officially announced, one has run at 20% of capacity over the past 12 months and the other has run close to 50% although that's very likely to drop sharply in the near future.

Technically they're great, financially they've turned out to be dead ducks in Australia.

That's to the point that wo smaller CCGT's, one each in Qld and NSW, have been converted back to open cycle operation. That is, simply remove the steam turbine and keep the rest. Meanwhile the owners of another one in Qld just revalued the facility to $0.

I'm not saying government should or shouldn't go down that track, just pointing out that less technically efficient approaches stack up better financially (but not environmentally....).

 

[SirRumpole]

There's a compromise to be made there.

In order best to worst:

Fuel efficiency: Combined cycle / internal combustion / open cycle.

Startup time: internal combustion / open cycle / combined cycle.

Cost to maintain: open cycle / internal combustion / combined cycle.

Cost to build: open cycle / internal combustion / combined cycle

Operational range (ability to operate at reduced output): Internal combustion / open cycle / combined cycle.

Combined cycle wins on fuel cost and emissions but doesn't win on anything else. Hence the industry's lack of interest in it - of the 4 combined cycle plants in south-eastern Australia (NSW, Vic, Tas, SA) one is mothballed, one is rarely operated with closure officially announced, one has run at 20% of capacity over the past 12 months and the other has run close to 50% although that's very likely to drop sharply in the near future.

Technically they're great, financially they've turned out to be dead ducks in Australia.

That's to the point that wo smaller CCGT's, one each in Qld and NSW, have been converted back to open cycle operation. That is, simply remove the steam turbine and keep the rest. Meanwhile the owners of another one in Qld just revalued the facility to $0.

I'm not saying government should or shouldn't go down that track, just pointing out that less technically efficient approaches stack up better financially (but not environmentally....).

Thanks for pointing that out.

Were the units you were referring to designed for full time operation or peaking ?

Would it be the case that if we had gas turbines for peaking output then open cycle would be the way to go because of less complexity and maintenance cost ?

 

[Smurf1976]

Were the units you were referring to designed for full time operation or peaking ?

Their history varies but in short they were all intended to be run 60%+ of the time. So at least ~7am to 10pm daily and for most of them 24 hours a day in practice.

High gas prices eroded the economics of that on the cost side then wind and solar eroded it on the demand side. End result is drastically lower operation in practice.

For the more "interesting" backgrounds:

Anything in Queensland was at least in part underpinned by the state government having at one point mandated that 13% of all electricity must be generated from gas. Not coal, not renewables, must be gas and nothing else.

As a concept that left rather a few thinking that government really had lost the plot but it was what it was, it existed, and drove the construction of gas-fired plant.

Then there's the saga of Tamar Valley power station in Tasmania. Long story short Alinta started building it to compete against Hydro Tas. Somewhere along the lines they must have done their sums and offloaded the partly built station to an investment bank. That bank then ran into financial trouble during the GFC and, fearful of the ACCC getting excited about monopolies, it was decided that Aurora Energy, at that point an electricity retailer and distribution network operator only, would take it on. Four years later Aurora was close to broke and long story short Hydro Tas ended up as the owner which it still is today.

The common element to all the CCGT's though is they were built in an era of cheap gas and were either built by those who didn't look too far ahead, or were profitable based on their initial gas contract so nobody cared too much what came after that and if the plant ended up worthless then so be it, it was profitable even if it only ran for the initial contract period.

 

[Smurf1976]

Would it be the case that if we had gas turbines for peaking output then open cycle would be the way to go because of less complexity and maintenance cost ?

In short, from a financial perspective yes but not so good environmentally.

Take a 100 MW (nice round numbers for simplicity) open cycle unit and add a steam turbine. Now you get 150 MW for the same fuel consumption, that's the benefit of combined cycle basically. 50% more power for no extra fuel is a huge winner if it's going to run steadily.

On the downside, well an open cycle plant can run completely unmanned, they can be started and run with nobody there, and as such the cost of having plant just sitting there ready to go isn't much at all.

In contrast a combined cycle plant won't be run without humans to be present to run it and it takes far longer to get online so higher costs there. A third less fuel per unit of output though.

If it's only for backup then from a financial perspective open cycle wins. Any reason to go for combined cycle would be based on lower emissions etc - something that government might see as worthwhile but a private owner driven by financial considerations won't.

 

[sptrawler]

Thanks for pointing that out.

Were the units you were referring to designed for full time operation or peaking ?

Would it be the case that if we had gas turbines for peaking output then open cycle would be the way to go because of less complexity and maintenance cost ?

Smurf has as usual explained everything beautifully.
I will add just as real life context, Kwinana power station in W.A installed a large combined cycle and as smurf says there are a lot of additional costs due to the steam set, which entails employing people to ensure the steam set isn't damaged(to save argument).
Later a further two large open cycle high efficiency gas turbines were installed, these are completely unmanned and operated by power system control.
The difference in efficiency of the combined cycle, with its inherent complexity and manning, is about 10%.
So in reality the combine cycle is only worthwhile as a base load unit IMO, as peaking and standby units the HEGT's are the goto units, their flexibility far outweighs any efficiency gains that combined cycle units offer.

 

[Smurf1976]

But back to the economic world of businesses that own these plants. Will these owners consider a partial shutdown of some plant units? Does the business model give enough profit to have it happen ?

Energy Australia have today publicly announced the closure of Yallourn power station in 2028.

Victoria’s Yallourn coal power plant to close early as clean shift slashes prices

Victorian coal-fired power station Yallourn will close four years earlier than scheduled, casting doubt over the future of hundreds of workers.

www.smh.com.au

Energy Australia has committed to installing a 350 MW / 1400 MWh battery, likely to be located at Jeeralang power station (not far away from Yallourn).

Timing also allows prior completion of Marinus Link 1 with a capacity of 750 MW between Tasmania and Victoria and construction of the Cethana pumped storage scheme or an alternative (of which many have been identified) in Tas.

As background, the closure will mark the end of 104 years of continuous coal mining and power generation at Yallourn, a town (now itself consumed by the mine), built for that specific purpose.

A station opened in 1924 with 4 x 12.5 MW generators, two more added in 1928, and operated through to 1968.

B station opened in 1932 with 2 x 25 MW, the third added in 1935 and the fourth in 1938. Officially closed in 1969 but the turbines and alternators remained in place through to the 1980's and had the occasional run.

C station 2 x 50 MW opened 1954 and 55 with a small 6 MW back pressure turbine added 1956. Closed 1984.

D station 2 x 50 MW and essentially a copy of C station opened 1957 - 58. Closed 1986. C & D were both built with 6 boilers, only 5 of which were required for full output, in order to achieve higher reliability (since it's the boilers that cause most outages).

E station 2 x 120 MW was the first unitised plant in Victoria, that is one boiler per turbine, opened 1961 and 62 with closure in practice in 1988 and officially in 89.

W station, the only plant presently operating, comprises 2 x 350 MW opened 1973 and 1975 and 2 x 375 MW both opened in 1981.

Now queue the politics:

My guess is the Liberals are running around in a panic right about now meanwhile a certain environment group, which is not itself a political party, will be busily pumping out press releases claiming credit for a decision they had nothing to do with.

I took a shot at both sides there yes and for good reason - both extremes of the debate are filled with nonsense but ultimately it's commercial reality combined with the technical condition of the plant and the timing of alternatives that has driven EA's announcement. Not that the announcement was a particular surprise.....

 

[SirRumpole]

I took a shot at both sides there yes and for good reason - both extremes of the debate are filled with nonsense but ultimately it's commercial reality combined with the technical condition of the plant and the timing of alternatives that has driven EA's announcement. Not that the announcement was a particular surprise.....

If the plant was properly maintained would it have lasted another 4 years ?

Are commercial operators just letting these things run down and then crying poor that they can't maintain them ?

 

[sptrawler]

As you say @Smurf1976, the government is monitoring progress, I wouldn't be surprised if they don't build a gas plant.

Surprise coal plant closure fires Morrison government warning to industry

The Morrison government is demanding the energy industry invest in more power supply to replace the Yallourn coal fired power plant, which will be closing early.

www.smh.com.au

From the article:
Yallourn supplies up to 22 per cent of Victoria’s electricity demand and employs about 500 workers. EnergyAustralia plans to build a four-hour battery by 2026, which would help to compensate for the loss of coal fired output.

Mr Taylor warned energy companies that the federal government will monitor their behaviour to prevent a shortfall in supply leading to consumer power price rises, adding that his thoughts were with the workers due to the early closure.

Mr Taylor told Sky News he found out about Yallourn’s closure today and the Morrison government “won’t stand idly by” and watch power price rises.

He said the government would review the situation before it emulated its action in NSW - where it pledged to build a gas power plant to replace the dispatchable power lost in the 2023 closure of the Liddell coal plant.

″While coal exits impact reliability and system security, the major impact for consumers will be the significant increase in prices if not adequately replaced with dispatchable capacity,” Mr Taylor said.
Alex Wonhas, the chief system designer at the Commonwealth’s Australian Energy Market Operator, said state and federal governments needed to co-operate on the major reforms called for by the Energy Security Board, an advisory body set up when the NEG fell over.

“As the energy transition continues to gain pace, it is increasingly important that the Energy Security Board market reforms are progressed to ensure the exit of thermal plants is coordinated with the timely entry into the market of new dispatchable capacity to keep consumer prices low and energy reliable,” Mr Wonhas said.

Energy Security Board chair Kerry Schott said the current rate of renewable growth exceeds government projections and would take its current share of the energy mix from 37 per cent to 63 per cent by 2030 and 94 per cent by 2040.

 

[Smurf1976]

If the plant was properly maintained would it have lasted another 4 years ?

Ultimately it's all down to materials and money. Replace enough worn out components and it could run a very long time.

In practice though it comes down to economics. Much like a car, a point comes where what you've got is something where just about everything's worn out and the design's obsolete and so on. Unless it's for reasons of historical preservation etc, it ends up being more sensible to just scrap it and get something new that's of a modern design and so on.

In the case of Yallourn, well they do 4 yearly major overhauls hence moving the closure forward by 4 years and not moving it by, say, 3 or 5 years. Someone's crunched the numbers and concluded that the cost of running in the 2028 - 32 period, versus the likely revenue, doesn't stack up.

An issue there is the industry structure and that in the context of Victoria (and all NEM states except Tasmania) nobody's actually obligated to ensure adequate supply. That is, just because Energy Australia operates Yallourn doesn't mean they're under any obligation to continue to do so indefinitely or to replace it. As with any business, they're able to simply exit the market altogether if they so choose.

AEMO can and will dispatch the supply that's available and match that to demand, and they'll firmly tap operators on the shoulder if plant's not being run but could be run and it's needed, but ultimately they don't own power stations themselves.

It would be fair to say that those on the engineering side don't like that situation at all, they see it as too risky, versus those on the political and financial side who'll say "that's the market". There are pros and cons to both lines of thought - broadly speaking engineers will be overly cautious which leads to over-investment versus the market will take ever more risk until there's a crisis. Both are imperfect in different ways.

Where I do see a real problem is with the politics and explaining all this to the public. Even without the politics it's a hard message to get across that we've got two opposing problems, that being an over-supply and a shortage. To the average person, they don't grasp how that's even possible. Following chart illustrates the situation:

Green is wind generation, yellow is solar. Red line at the bottom is price - note that it went negative on the 6th and 9th of March so that's a price below zero yes.

At the peak shown above, wind and solar are almost 3000 MW so double the maximum output of Yallourn and about 60% of Victoria's average consumption (and about 30% of peak demand).

At the minimum however wind and solar went all the way down to 73 MW which is too small to be worth counting really. Even worse, that's not the lowest it gets - close to zero isn't unknown.

So within a matter of hours it can and does go from abundance to the opposite and that's without even considering that demand itself is variable.

Solution there is storage. Take power out of the grid when there's too much, stick it back in when the opposite situation exists. So long as everything's correctly sized that'll work.

Problem is, nobody's obligated to build what's needed - back to that debate about engineers versus those on the business or political side.

Needless to say, all this wasn't a problem when Yallourn was designed. No such thing as wind and solar power back then, so it just running steadily was exactly what it needed to do and it does that extremely well. Perfect for the 1970's, not what's really needed going forward however.

Separate to all that, and somewhat lost in the politics, is the simple reality that Victoria's gas fields are rapidly running out.

That's a resource depletion problem, not an electrical problem per se, noting that the majority of gas in Victoria and NSW is used for purposes not related to electricity. That is, it's used "as gas" in homes and industry with only a limited amount going into power stations.

That being so, there's a need to sort out the gas supply situation that's somewhat separate to the electrical situation. That is, regardless of what's done about electricity, there's still a need to supply gas for other uses at least in the medium term and the current sources aren't up to the task .

So putting all that together:

*Over-supply of electricity at times of low demand + high wind and solar production leads to negative prices, undermining the economics of wind, solar and old thermal plant unable to easily throttle back production.

*Yallourn is old and tired so there's a reluctance to invest further into it.

*We still need all current capacity to operate at times of high demand + low wind and solar production. That creates a need to replace the capacity being closed with something new that's able to operate flexibly in an economic manner.

*Large batteries and pumped hydro combined tick the boxes. They take in energy when it's abundant, return it to the grid when supply runs short.

*Gas supply across the combined NSW, ACT, Vic, Tas, SA region with current infrastructure can't meet demand beyond autumn 2024 on AEMO and the industry's current best estimates (some revision +/- a few months is possible there due to geological uncertainties and weather influence on the consumption rate).

*Some gas is used for electricity generation but the majority is used "as gas". That being so, no amount of new wind and solar power, or coal or nuclear, is an alternative to address the majority of the gas supply problem. Only options are either new sources of gas or a rapid reduction in consumption by homes and industry.

*The gas situation does of course preclude an expansion of gas-fired electricity in the absence of also expanding gas supply.

*Long term, electricity demand is stable with the recent trend being slightly upward, a trend that's likely to accelerate with moves toward electric vehicles etc. The means of generation is drastically changing, the trend being away from coal and gas in favour of wind and solar, but it's not going away as such.

Total for all states excluding WA and NT. Black = coal, orange = gas, blue = hydro, green = wind, yellow = solar. Biomass and oil are also used but too small to see on the chart.

Note that 2005 data does not show the complete year. 2021 is calendar year to date.

 

[orr]

Smurf; luv your work above...
I can only hope that there's a broarder audiance to point to your nudging toward a 'mothball' led Recovery, (is it to late to get in on the ground floor) ...
The fundamental in'greed'ients of mothballs being serious hydroCarbons; This will be music to the clothears of Pearson and Kunkle both straight out of the Minerals Council and like suppositories, slipping their way into Morrison's oriface, oops Office.

Yallourn goes dark in 2028... 2028!!!
The Forward modeling on east coast electcity comsumption is bread and butter to every Major in the Eletricity market. As are projected prices of renewable electrcity.
The whole game is HV DC Interconnectors/Transmission and storage, Based aound that forward modeling. Liberal party schizoid embolisims like NSW's energy Minister Matt Kean are only at the begining of their run, the market is climbing over itself to invest in wind and solar, because the money ain't stupid.
A gas led recovery is. And we know who's 'Idea' that is....
Let alone the 'Jobs'n'Growth' being flushed down the dunny along with the future economy....Through lack of, or captured more likely, Federal Leader$hit....

 

[Smurf1976]

the market is climbing over itself to invest in wind and solar, because the money ain't stupid.
A gas led recovery is. And we know who's 'Idea' that is....

For electricity wind + solar + storage = solution.

I'll caution that we do need to sort out gas supply for use "as gas" though.

Longer term there might be a move away from it but there's basically no chance of that occurring in the time available given there's literally a few million appliances using gas. The sheer logistics of it mean that any change will take quite some time there.

For those interested, here's the AEMO report on the issue:

https://aemo.com.au/-/media/files/gas/national_planning_and_forecasting/vgpr/2020/2020-vgpr-update.pdf?la=en

A good summary is this quote from it:

committed supply is forecast to reduce by 37% from 2022 to 2024 due to field decline. Without additional gas supply, removal of pipeline constraints, or a liquefied natural gas (LNG) import terminal, gas supply restrictions and curtailment may be necessary from 2024.

AEMO aren't being political there, just stating how it is. SA's gas production peaked years ago and Victoria's now going over the edge of the cliff. Noting that there's presently no production of any significance in NSW or Tas and that the pipeline between Qld and SA can only supply about 20% of winter demand for NSW, ACT, SA, Vic, Tas hence the issue.

Where government has completely failed is to take any leadership with all this.

Or even to properly explain to the general public what it's about.

 

[SirRumpole]

Where government has completely failed is to take any leadership with all this.

Or even to properly explain to the general public what it's about.

I really can't get my head around this.

Australia is the biggest exporter of LNG in the world. https://www.climatecouncil.org.au/australia-worlds-largest-gas-exporter/

If we can ship gas to Japan, Korea etc, why can't we ship gas from WA to NSW or Victoria ?

The Federal govt is selling us out by not having a gas reservation policy.

They don't want to annoy big multinationals who provide their finance.

Some call it business, I call it corruption.

 

[sptrawler]

I really can't get my head around this.

Australia is the biggest exporter of LNG in the world. https://www.climatecouncil.org.au/australia-worlds-largest-gas-exporter/

If we can ship gas to Japan, Korea etc, why can't we ship gas from WA to NSW or Victoria ?

The Federal govt is selling us out by not having a gas reservation policy.

They don't want to annoy big multinationals who provide their finance.

Some call it business, I call it corruption.

Are you sure the Federal Government can have a gas reservation policy over a State resource?
This is where it all becomes a bit of a wank, everyone blames the Feds when it suits their political bent, but as was proven with the virus the Feds have very little control over what is State sovereignty.
When the States want to flex their independence and sovereignty, it is easy to to do as Mark McGowan and Daniel Andrews showed, they just tell the Feds to sod off.
It is just easy to blame the Feds, when in fact a lot of the responsibility sits with the States.
It is about time the States owned up to their responsibilities, rather than allowing them to be randomly allocated to the Feds by the media, ala the bushfires.
We in W.A had some bad bushfires this summer and we didn't give a rats ar$e where the P.M was, but we still managed and no doubt we will next year.
We also have a gas reservation policy, which was started in the 1970's, we didn't need the Feds to wipe our Ar$e funny how we do now?
https://www.abc.net.au/news/2013-05-17/the-cost-of-securing-wa27s-energy-future/4697136
From the article:

Legacy contracts​

What's largely cushioned households and industry from huge increases in their gas bills are the low prices locked in under 'take or pay' contracts signed with the North West Shelf 30 years ago.

Former WA premier Sir Charles Court was the architect of the original North West Shelf Agreement, underwriting the development and cementing the state with a long term supply of gas.

For many years there was an oversupply of gas in WA but the ramping up of the mining sector in the Pilbara soon took care of that.

The contracts, which include a mix of fixed and indexed prices, will begin expiring from 2015 onwards.

Since that report new gas reservation policies have been put in place by the State governments, especially Labor led by Allan Carpenter.
the Federal Government had nothing to do with the implementation of the reservation policy as far as I understand.
So how is it their responsibility to implement it over East, or is there some different set of royalty and sovereignty rules over there?
Or are we just beating the political drum and tamborine?

 

[Smurf1976]

Are you sure the Federal Government can have a gas reservation policy over a State resource?

They definitely have the power over export permits.

A state could develop the gas fields but to export any commodity requires a permit from the feds which could be refused.

That doesn't force reserving gas but if it can't be exported beyond a certain volume then it's a backdoor way of doing the same thing.

Some specific materials the feds do regulate quite actively. Eg uranium - they'll only approve export to specific customers, they won't approve it just to anyone. Depends what country it's going to basically.

 

[sptrawler]

They definitely have the power over export permits.

A state could develop the gas fields but to export any commodity requires a permit from the feds which could be refused.

That doesn't force reserving gas but if it can't be exported beyond a certain volume then it's a backdoor way of doing the same thing.

Some specific materials the feds do regulate quite actively. Eg uranium - they'll only approve export to specific customers, they won't approve it just to anyone. Depends what country it's going to basically.

Yes which is what happened in the W.A browse basin from memory and what a cluster F$%k that has turned out to be, like that helped Australia and a gas reservation policy, the Feds used that power to not back W.A. ?

It’s here! $12b floating gas Goliath arrives in WA

It dwarfs Sydney Opera House and has five times the steel of Sydney Harbour Bridge.

thewest.com.au

Shell’s $12 Billion LNG Experiment Becomes A Big Headache

The world’s biggest ship is on the way to becoming one of the oil industry’s biggest bloopers.

www.forbes.com

'It just hasn't worked': Just 3 years old, the world's largest floating factory remains offline

Shell's massive floating LNG factory off the Kimberley coast has been in shutdown since February and analysts are divided on whether the multi-billion-dollar facility has a future.

www.abc.net.au

Yep we need the Feds to get involved, I don't think so.
And how does the Feds floating fluck up help a gas reservation policy, when the W.A government wanted to process it onshore, but were shouted down?
If they had processed it onshore, as the State wanted, we would have move development potential in the North.

O.k lets say the Feds said right we are going to demand all State gas reserves, have to contain a 15% reserve component, or we wont allow it to be developed.
Magic, how are they going to allocate whatever returns they gain from that e.g the gas is in Queensland, but NSW and Vic need it, another mess on the horizon I think?

 

[sptrawler]

Some specific materials the feds do regulate quite actively. Eg uranium - they'll only approve export to specific customers, they won't approve it just to anyone. Depends what country it's going to basically.

Nice one to pluck out uranium, I'm not bas.

 

[Smurf1976]

Yep we need the Feds to get involved, I don't think so.

I don't advocate that the Feds get involved, I'm only pointing out that they do have the power in practice.

Point being they can't say it's all the states' fault. They had the power to stop it in practice if they wanted to. In practice they did nothing to stop it, indeed they actively cheered it on. I still remember the announcement.

The Feds will have that 15% of WA's gas loaded onto a ship if they can get away with it. A ship bound for somewhere overseas that is.