The future of energy generation and storage

[Smurf1976]

This will come to a head in the next couple of years IMO, each State is going to have to commit to some pumped hydro, or at call gas installations. The EU is showing just how useless the narrative they have been pumping is, they are in more $hit than Ned Kelly if Putin turns off the gas and they know it.

I suspect something that'll shake most planning to the core is afoot and there's no going back now, just that most haven't realised it yet.

Gas.

I expect you know the history with oil pretty well but for those who don't, the short version:

1958 - Cheap and abundant Middle East oil flooded the world market, finally ending post-war fuel shortages globally. Even if some place was still short on coal, no problem since now oil was cheap and plentiful.

Early 1960's onwards - New oil-fired power stations started to be built first for peak load but in due course even for base load. In some places, WA was one, even existing coal-fired plants were converted to oil since it was now cheaper to use that than to use coal. Meanwhile industries ditched coal boilers in favour of oil, homes and offices switched heating to oil and so on. Coal was pretty close to dead by the late 1960's, being viable only for the largest scale uses in places where it could be mined more cheaply than most.

October 1973 - The Oil Embargo cut oil supplies from the Middle East and the price tripled almost literally overnight. Physical shortages emerged with products, including petrol, simply not available to consumers at any price.

From that came the entire concept that energy was something to pay attention to. Prior to that most governments had no such thing as a Ministerial position that specifically referenced energy, business and consumers saw it as no more an issue than the supply of any other random item and so on. Until all of a sudden it had the attention of Presidents and Prime Ministers around the world and was seen as a crisis.

Now about those oil-fired power stations most of which were still virtually brand new or even under construction. Some were ultimately converted to coal or gas at huge expense and, in the case of coal, usually with significant technical and logistical shortcomings though it beat paying for oil. Others went with more exotic niche ideas such as CWF (coal water fuel, a black oil-like liquid made by mixing extremely finely ground coal particles with water) or Orimulsion (a proprietary emulsion of about 70% natural bitumen and water) but plenty ended up being economic millstones for the next 35 or so years until finally being closed.

Plus of course the infamous one in NZ that was built and never generated a single kilowatt prior to demolition. Pretty much the ultimate write off there.

Now back to 2022 and my point about oil is that we're now in an extremely similar situation with gas.

The LNG price was soaring well before Russia started moving troops around but has now gone through the roof, it's simply cost prohibitive at this point using gas at international market prices to generate electricity. Just like what happened with oil 48 years ago.

Now for the EU to ditch Russian gas imports via pipeline requires a one third increase in total worldwide LNG consumption. A one third increase of something that's already in short supply!

Now I could add that Russia itself accounts for 8% of world LNG production. LNG as distinct from gas supplied by pipelines.

Russia has 23% of the world's proven gas reserves. And the second biggest reserve holder? Well that would be Iran. Add in all the other former USSR countries and the Middle East and that's the bulk of the world's known gas reserves.

Ahh....

Australia's got a bit under 1.6% for the record and most of that's already sold for export.

So I don't think it has really sunk in for most yet but in my view we're now in a new era. An era where history doesn't repeat but it rhymes - in the same way nobody wanted anything to do with oil-fired generation after 1973, they're not going to want anything to do with LNG going forward either. At least not unless they've got seriously deep pockets financially.

LNG being relevant because importing LNG is the proposed means of supplying gas to south-eastern Australia with works having commenced for the Port Kembla (NSW) terminal and others planned for Newcastle, Geelong, Avalon (near Geelong) and Adelaide.

Now I've no doubt not everyone will agree but to the extent I end up being right, well that would leave more than a few corporate and government plans in tatters if gas costs an outright fortune.

 

[SirRumpole]

So we have or will have an abundance of coal that we can't sell, and a shortage of oil that we can't buy.

Thinks...

Ah ha !!

Coal liquefaction - Wikipedia

en.wikipedia.org

 

[The Triangle]

 

[sptrawler]

It just gives Europe the perfect reason to change over to renewables, they are cheaper per MW, they are cleaner, they just need to do it. ?
I mean really they are shutting down nuclear, they want to get rid of dirty gas, what better excuse?
It must be the Governments don't want to, same as in Australia, they know it is cheaper to put in wind and solar why not just do it? ?

 

[Smurf1976]

The big problem with all this is the tendency of many to focus on single issues, usually climate change.

Yep, CO2 emissions are an issue no argument there.

CH4 isn't too good for the environment either but that often conflicts with CO2.

War's pretty damn nasty too.

So is having the lights go our or the poorer half shivering in the dark.

And so on.

Point being there are many issues and what's needed is an overall workable plan. Without that, public and political support just won't be there, leading to nothing much being achieved and suffice to say that 90% of something beats having 100% of nothing.

So my argument is that yes we need to shift away from consumption of non-renewable resources and yes we need to stop altering the composition of the earth's atmosphere. Both of those ought to be obvious problems to anyone.

At the same time however, arguing that we shouldn't drill an oil well because it might make one of Russia's existing wells obsolete really doesn't cut it. It's going to be quite some years yet before oil ceases to be relevant and in the meantime it needs to come from somewhere, preferably somewhere that isn't intent on starting wars.

Whilst most of Australia's oil doesn't come from Russia, we do have a huge exposure to countries that could fairly be described as one or more of internally unstable, politically hostile to the west, military targets themselves or they're a dictatorship. Overall that's a huge risk.

 

[sptrawler]

Finland starts its first new nuclear reactor in 40 years.

A long-delayed nuclear reactor goes online in Finland

A long-delayed and costly new nuclear reactor has gone online in Finland after a wait of over 12 years

abcnews.go.com

 

[rederob]

Finland starts its first new nuclear reactor in 40 years.

A long-delayed nuclear reactor goes online in Finland

A long-delayed and costly new nuclear reactor has gone online in Finland after a wait of over 12 years

abcnews.go.com

If we start building one now then by 2038 if we are lucky we can run a long extension cord to our submarines which are apparently going to need nuclear power to operate.

 

[basilio]

Yet another big move in battery technology. This time the development of sodium ion batteries that are cheaper, safer and as/more powerful than lithium ion. They can be produced on the same production lines as Lithium Ion batteries

CATL says production will be from 2023. Another opportunity to reduce battery costs for vehicle and stationary applications. Well worth a look IMV.

 

[sptrawler]

AGL gets green light for big battery at Liddell coal site

AGL has won planning approval to build a big battery that it hopes will transform the site of its Liddell coal-fired power station into a low-carbon ‘energy hub’.

www.smh.com.au

Electricity giant AGL has secured planning approval to build a grid-scale battery on the site of the soon-to-be-closed Liddell coal-fired power plant in the Hunter Valley, beginning its proposed transition to a low-carbon “energy hub”.

The New South Wales government is preparing to announce on Saturday it has granted planning approval for AGL’s plans to build the grid-scale battery with a capacity of 500 megawatts and 2 gigawatt hours, making it more than three times the initial size of the “Tesla Big Battery” famously built by Elon Musk in South Australia in 2017.

 

[Smurf1976]

AGL’s plans to build the grid-scale battery with a capacity of 500 megawatts and 2 gigawatt hours

Putting that into perspective, NSW peak demand is a bit over 15,000 MW and average load is 8200 MW.

The 4 generating units at Liddell were originally 500 MW each, presently de-rated to 420 MW, whilst the largest individual units in the state are 720 MW each at Eraring.

So the battery is definitely significant in capacity yes.

 

[sptrawler]

Putting that into perspective, NSW peak demand is a bit over 15,000 MW and average load is 8200 MW.

The 4 generating units at Liddell were originally 500 MW each, presently de-rated to 420 MW, whilst the largest individual units in the state are 720 MW each at Eraring.

So the battery is definitely significant in capacity yes.

The thing I like, is they are utilising the existing asset, so many of these obsolete power stations, just become a remote switchyards.
It indicates to me that they are accepting the reality and using the cash flow, to adapt into what will be the new grid structure.
So we now have a commitment to a serious size battery at the Liddell site, add to that the in principal agreement with Twiggy for green hydrogen generation at the site, it is starting to look like a plan to me.
I'm comfortable with my first buy into the power industry at $6.

 

[Smurf1976]

The thing I like, is they are utilising the existing asset, so many of these obsolete power stations, just become a remote switchyards.

FWIW AGL also installing a battery at Torrens Island power station in SA with the battery already under construction physically and they've got plans to put one at the Loy Yang power station in Victoria as well.

Origin looking to put one in at Eraring power station in NSW and Energy Australia planning to put one at Jeeralang power station in Victoria and in that case the power station will remain operational.

Another is the Wallerawang 9 battery in NSW proposed by a separate company but it's so named since it's at the same site as the former Wallerawang power stations which between them had 8 units, hence this is number 9 albeit different owners etc.

 

[SirRumpole]

Putting that into perspective, NSW peak demand is a bit over 15,000 MW and average load is 8200 MW.

The 4 generating units at Liddell were originally 500 MW each, presently de-rated to 420 MW, whilst the largest individual units in the state are 720 MW each at Eraring.

So the battery is definitely significant in capacity yes.

Replacement of generating capacity with storage capacity.

Any problems there ?

 

[Smurf1976]

Replacement of generating capacity with storage capacity.

Any problems there ?

Short answer is it depends.

As a source of power to meet peak load batteries are just fine.

They do however rely on being able to charge each and every day and the ability to do that requires that the sum total of fossil fuel + hydro + wind and solar can generate sufficient electrical energy (as distinct from peak power) over the course of the day to supply consumption.

That's what it comes down to and it's about worst performance there not average. That is, what's the worst short term output scenario for wind + solar (driven by weather) and fossil fuels + hydro (driven by plant outages) and can that supply enough energy to at least match consumption? If not then the outcome is the batteries end up flat.

Short term no problem but as more fossil fuel plant is progressively removed, it needs to be replaced with something that can do the job and that's where the debate starts. There's a limit to how far batteries can go and it's rather expensive to be massively overbuilding wind and solar so as to still have enough on the calmest, cloudiest day. That's where the argument about long duration hydro storage (eg Snowy 2.0) and gas turbines or other fuel burning plant comes in.

In that regard NSW has a moderate issue, since solar + wind does have "droughts" but they're relatively moderate and same goes for SA.

Qld has it relatively easy due to climate and being closer to the equator.

Victoria and Tasmania are both prone to extremely poor wind + solar yield and high consumption occurring at the exact same time. Tasmania has the "get of out jail card" with hydro but Victoria's a much more difficult problem to solve.

12 month daily chart of solar (yellow) and wind (green) in Victoria shows the issue. It's those multiple days of very low output, such as occurred at the beginning of July last year, that is the hard one to solve in an economical manner. Whilst not impossible, the degree of wind + solar overbuild required to do it that way would cost serious $.

Versus NSW which does have its ups and downs but isn't so brutal, it's easier to solve:

Both charts are daily for the past 12 months.

 

[sptrawler]

Replacement of generating capacity with storage capacity.

Any problems there ?

Like I said in the post, I'm pretty sure FFI and AGL have signed a MOU, to install hydrogen production facilities at the Liddell site, also if they can generate hydrogen to run GT's and have a 500MW battery to absorb excess generation, it sounds like it may be a pretty holistic approach to a fully renewable at call facility. Time will tell.

 

[sptrawler]

If this summer on the East coast, is a sign of how the weather patterns are going to be, more hydro needs to be installed IMO.
It could always be designed for flood mitigation, to control what we are seeing now, or for pumped storage when the weather pattern has less rain.

Sydney to be hit by 100mm of rain in four days as bureau warns of flood fatigue

Rivers and water catchments across the state’s east coast have not had enough time to dry out since the recent flood emergency, says the weather bureau’s senior meteorologist.

www.smh.com.au

 

[sptrawler]

Oh well @Smurf1976 how long have you been saying this is a looming issue?

ACCC watching LNG exports as gas shortfall looms​

The competition regulator says ‘very concerning’ estimates show a gas shortfall over the whole east coast by 2026 or 2027.

 

[Stockbailx]

The War in Ukraine Has ‘Turbocharged’ This Sector Wednesday, 23 March 2022 — Albert Park By Selva Freigedo Editor, Money Morning [3 min read] In today’s Money Morning…it’s been pandemic déjà vu over there…high gas prices are making green hydrogen more attractive…there’s another factor that could bring green hydro High gas prices are making green hydrogen more attractive​ Hydrogen is the most abundant and simplest element in the universe. While hydrogen is a transparent gas, it’s denominated in different colours depending on the energy source used to process it. So just to name a few examples, there’s black or brown hydrogen (made with coal), grey (made with natural gas), blue (made with natural gas and carbon capture), and green hydrogen (made with renewable energy such as solar and wind). Green hydrogen is still a small percentage of the total hydrogen produced. This is because it’s been too expensive when compared to other types of hydrogen, even though renewable energy costs have come down in the last few years. But the Ukraine war could really be a catalyst for green hydrogen after gas price rises have increased the cost of producing blue and grey hydrogen in Europe. Here is Rystad Energy (emphasis added): ‘As the cost of blue and gray hydrogen surge in line with rising fossil fuel prices, the feasibility of green hydrogen as an affordable and secure source of renewable energy in Europe is growing, Rystad Energy research predicts. ‘Green hydrogen production was already set to take off this year globally and pass the 1-GW-milestone in 2022. However, the war in Ukraine has turbocharged the sector. Green hydrogen’s potential win comes at the expense of its fossil fuel-linked blue and gray alternatives, whose costs have increased by over 70% since the start of the war in Ukraine, rising from about $8/kg to$12/kg in a matter of days. The EU has announced plans for a €300 million funding package for hydrogen as well as the Hydrogen Accelerator initiative from REPowerEU aiming at reducing the region’s dependence on Russian gas with a further wave of support packages for green hydrogen specifically likely to emerge. Individual member states have also accelerated their domestic plans. Since the Russian invasion of Ukraine, the economics of green hydrogen have become increasingly attractive with lower production costs of US$4/kg (particularly in the Iberian Peninsula) compared to US$14/kg for blue and US$12/kg for gray in other part of Europe.’ There’s another factor that could bring green hydrogen costs down…​ You see, two things influence the price of green hydrogen. One is the cost of electricity. The other is the electrolyser, the system that uses electricity to split water into hydrogen and oxygen. There’s been a global effort to bring costs of electrolysers down and increase efficiency. And last week, an Australian start-up named Hysata claimed they’ve made a huge breakthrough in this sector. Hysata said they’ve developed a new ultra-high efficiency electrolyser that will allow them to produce hydrogen at a production cost of well below $2 a kilogram. Hysata’s CEO, Paul Barrett, said the company is on a ‘clear pathway to commercialise the world’s most efficient electrolyser and reach gigawatt scale hydrogen production capacity by 2025.’ He also said: ‘Our technology will enable hydrogen production of below US$1.50/kg per kilogram by the mid-2020s, meeting Australian and global cost targets much earlier than generally expected. This is critical to making green hydrogen commercially viable and decarbonising hard-to-abate sectors.’ We’ll see how they go. But with the economics improving for green hydrogen, we could see more investment pour into this sector. Looking at exciting opportunities in the energy transition such as green hydrogen is what my colleague James Allen and I do at New Energy Investor. To find out more about our service, you can click here.

 

[Humid]

I'll put this here ....

Five years on, Snowy 2.0 emerges as a $10 billion white elephant

There is no cause for celebration with this birthday. Snowy 2.0, having blown out to $10 billion-plus from the original $2 billion estimate, will be a burden on taxpayers, cost households more in electricity charges and damage the Kosciuszko National Park.

www.smh.com.au

 

[Humid]

$8000 000 000.00 over estimates and counting