Australian (ASX) Stock Market Forum

The future of energy generation and storage

Jump to new
Smurf1976 said:
In my view the expected and entirely foreseeable outcome.

He's given it a decent shot, so have others, but the bottom line is we've far too many fundamental problems in this industry to be in a position to supply ~500MW to what is effectively a factory of sorts and to do that at an internationally competitive price.

There's entrenched inefficiency leading to higher than necessary costs and until such time as we face and address that reality there's not likely to be overly much success with this sort of thing. :2twocents
Click to expand...
Great summary smurf, I would guess the reality of producing anything efficiently requires reliable continuous energy supply, has finally hit home.
Twiggy may have finally twigged, if he is using renewables even he will need firming, for a 24/7 process.
So the solar farm is only one of the suppliers he would have to pay.
 
Last edited:
Smurf1976 said:
In my view the expected and entirely foreseeable outcome.

He's given it a decent shot, so have others, but the bottom line is we've far too many fundamental problems in this industry to be in a position to supply ~500MW to what is effectively a factory of sorts and to do that at an internationally competitive price.

There's entrenched inefficiency leading to higher than necessary costs and until such time as we face and address that reality there's not likely to be overly much success with this sort of thing. :2twocents
Click to expand...

Can you expand on the "entrenched inefficiencies" please?
 
I'm sure insiders would have known about this, but it hasn't been in the media from what I've seen(or haven't).

Queensland premier Steven Miles apologises to Pioneer Valley locals about pumped hydro announcement timing​


"
Queensland Premier Steven Miles has apologised to residents who could lose their homes to make way for the world's largest pumped hydro scheme, while insisting it will still go ahead.

The ambitious Pioneer-Burdekin proposal near Mackay is touted as the world's largest pumped hydro scheme.

It would involve constructing three dams adjacent to the Eungella National Park at an estimated cost of $12 billion.

About 50 homes and vast agricultural land could be flooded to make way for the project, which could also displace native platypuses.

Mr Miles fronted an angry crowd of about 150 locals late on Tuesday, who were concerned about the impact on local industry.

It is the first time a premier has met with locals in the region, and Mr Miles apologised for the way affected property owners found out two years ago.

"At the outset I want apologise for the pain and suffering you have felt around the way the initial announcement about this project was made," Mr Miles said."
www.abc.net.au

Premier apologises to Pioneer Valley locals who could lose homes but says pumped hydro scheme will still go ahead

Queensland Premier Steven Miles meets with locals opposed to the Pioneer-Burdekin Pumped Hydro project, saying he is sorry for the "pain and suffering" caused by its announcement, but plans are still moving ahead.
www.abc.net.au www.abc.net.au
 
I guess this fits in with Smurfs comments


Sir Mark Oliphant: (an excerpt from his 90th birthday speech at the Australian National University in 1991) "In Australia we have learnt recently that economics is indeed the dismal science. Perhaps it will be one who graduates today who will recreate it as a source of getting things done rather than providing reasons for no creative activity. We have the people with skills to do almost anything. We have the materials required for almost any task. What we lack is the will on the part of governments, industries and individuals to go ahead and do the job. When we dig to produce our own vegetables, or prune our fruit trees, or even build our own garage, we do not feel that we are thereby in debt. Our labour has produced something which did not exist beforehand. We have created an asset and owe no one anything as a result. But as a nation we create enormous debts rather than assets. We import rather than make. There is something wrong somewhere in a land which in general prefers the creative skills of other nations."


Full transcript here from the ABC science show you can also listen to the podcast.

Meet the man who changed the world forever​


www.abc.net.au

Meet the man who changed the world forever - ABC listen

Sir Mark Oliphant of Adelaide was the main person missing from the film Oppenheimer. It was Sir Mark who carried the letter from European scientists to New York to convince the American President that Hitler was trying to make an atomic bomb and needed to be beaten to the chilling quest. It...
www.abc.net.au www.abc.net.au
 
SirRumpole said:
Can you expand on the "entrenched inefficiencies" please?
Click to expand...
It spans three basic areas:

First is the industry structure itself in an organisational sense.

For a start there's the regulatory process and the multiple bodies involved.

The Australian Energy Market Commission (AEMC) develops the rules.

The Australian Energy Market Operator (AEMO) handles the day to day operation of the market.

The Australian Energy Regulator (AER) enforces the rules and makes judgments on the regulatory proposals of network operators.

The Energy Security Board (ESB) coordinates the reform blue print and reports to another body, the Energy Council.

The Australian Competition and Consumer Commission (ACCC) provides recommendations, collates data and also undertakes some enforcement actions.

Now add to this every network operator needs to, on a routine basis, go through a rather lengthy process to have their network tariffs approved. That's a rather lengthy process, that each operator does individually. Here's an example, the 2023-24 proposal for the distribution network (only) in SA: https://www.sapowernetworks.com.au/public/download/?id=321379

Now add all the other regulators of various sorts that apply to business and the industry at a federal, state or local government level plus the likes of ASIC, the ASX and so on.

End result is there's a huge number of people employed doing all this regulation either as a regulator or on the other side proposing to do something or ensuring their organisation is compliant. If the aim was to make work for lawyers then that objective has undeniably been achieved.

Then there's the fragmentation of retail across numerous companies, each with a board, costs of business compliance and so on. And the big one, NEM-compliant billing systems at circa $100 million per retailer.

Second big issue is with what's built.

Simple example but if you were going to build some gas turbines or install a large battery then putting them somewhere that also overcomes a transmission constraint would "kill two birds with the one stone" and save money. That's just obvious.

Trouble is transmission companies don't build generation and with minor exception generation companies don't run transmission. See where this is going?

So there are some examples where common sense has prevailed but there's more than a few where it hasn't. It ends up with installing generation or storage at location A, then duplicating the network from A to B because more peak capacity is required at B. That's an obvious waste.

Third one is real time operations.

Anyone who's familiar with the operation of a single integrated utility will be extremely aware of a concept known as "merit order dispatch". In short that's the golden rule and it's dead simple - run the cheapest generation as highest priority and the most expensive as lowest priority. Deviate from that only to the extent necessary for bona fide technical reasons.

So at times of low demand, only the lowest cost generation gets run. Eg wind, solar, efficient thermal plant. Not hydro because it makes more sense to save that water now and use it later to displace high cost (eg diesel, gas) generation when that would otherwise be needed. Exception if the dam's full obviously, in that case use it now.

When demand rises then the more costly generation gets run. Put the hydro to work and if that's not enough well that's when the gas comes next and diesel's the last resort if there's nothing else left.

Trouble is that approach is all rather boring. Someone can print the merit order out on paper, stick it on the wall, and a year later it'll still be accurate. Only if there's something new built, something closed, or a major change in relative fuel prices will there be a need to update it. Only complication's where to put the hydro in - the more water you've got, the lower down the list it goes and the less water the higher up.

Lower? Yep because dispatch is bottom up. Start from the bottom and work upwards is the normal approach. Bottom always runs - "base load generation" whist top is last to run - "peak load generation". Once you realise function, and how it would look if you plotted it all on a chart, starting at the bottom makes perfect sense so it's the way it was done. Water availability determines where the hydro slots in.

Bearing in mind there is of course always the option for manual overrides where warranted. Eg if there's a need to give something a test run after maintenance then sure, no problem, that can be easily accommodated as an intentional "out of merit" operation.

But we have the National Electricity Market and all this engineering-driven decision making doesn't make for much of a market now does it? Well no it doesn't....

So instead of having merit order dispatch as it used to be, what we now have is merit order dispatch based on prices offered by generators at 5 minute intervals and it's those prices, not actual costs, which determine what runs and what doesn't. Noting for clarity those prices are simply whatever prices the companies offer - they're essentially "made up" numbers, they're not a calculation that anyone has to prove the basis of.

Trouble is that nobody's going to offer prices that, on average over the long term, are below costs. The only way to do it differently from the old way therefore is if price is shifted upward. Without that there's no market in practice.

What really irks engineers and others is when the outcome of this process ends up with low cost (in terms of real, actual costs) generation not being run meanwhile high cost generation is run because it was actually offered at a lower price. That is, the actually cheap generation has been offered at a high price and is thus not run.

Now economists will say something about this not mattering because it's a free market and so on. What the engineers will say though is that since real gas or diesel fuel is being burned, when wind from an already built wind farm or a least the output of an already running and lower cost thermal plant could instead be used, that's real money quite literally going up in smoke and that being so, someone is going to have to pay for that. No amount of financial chicanery can make that go away - real money's been spent so someone is going to be paying for that. Now no prizes for guessing who that "someone" ends up being....

That is of course without mentioning the environment. Even among those who aren't concerned about climate change, I've never come across any technical person arguing that it makes sense to not fully utilise a wind / solar facility if it has been built. They might argue against having built it in the first place but, given it has been built, well it costs nothing to run so why on earth would it not be used as highest priority generation at all times unless a genuine technical issue precludes it?

The answer of course is the traders working for the wind farm owner are trying to get the price up as is everyone else. In doing that, sometimes they'll price themselves out of the market and so gas or diesel runs instead and the wind goes to waste. Indeed sometimes they'll do that deliberately to partial extent - because it's more profitable to generate half as much at quadruple the price.

AEMO uses the term "Economic Curtailment" to refer to this - it means wind and solar curtailed for purely market price reasons, as distinct from being curtailed due to either a technical reason (eg transmission constraints or system inertia) or simply due to lack of demand.

Now my personal view on all this is the pendulum has swung too far.

I'm not going to argue engineers always got it right. Indeed I'll outright say that if we turn the clock back 50 years then things did get somewhat out of hand with overly ambitious supply increases and the directly associated plans to dam and mine the lot. So I'm not going to say that some change wasn't needed and desirable.

It has however gone too far in the opposite direction in my view, the industry having been captured by economic ideology in much the same way it was previously captured by engineering, both losing sight of the point that supplying electricity to consumers is rationally the real objective. We've gone from an excessive focus on building things to an excessive focus on regulation and ideology, in both cases losing sight of whether or not that's actually the best approach.

That's not surprising really, it's a classic example of what humans tend to do. Realising one thing's a problem, we then go to the opposite extreme which also becomes a problem in a different way. That's a human thing that tends to happen in all manner of situations - one extreme to the other.

My view is what's needed is to come back half way. Keep a firm focus on economics but drop the ideology and use engineering to drive cost reductions. There's a lot going on that could be rationalised and reformed, most obviously shifting back to true merit order dispatch based on real costs not the posturing of traders. That plus streamlining the regulatory process to both reduce the cost of regulation and to avoid silly outcomes.

Unless it changes then reality is Australia's a relatively high cost country for energy indeed the same basic concept applies to various other industries as well. :2twocents
 
The problem with kicking the can down the road is, it's a bit like a credit card, the problem doesn't go away.
It's just that Dad is chipping in, low income earners need to start and put money away, sooner or later Dad will stop chipping in.

www.smh.com.au

PM signals budget help for families, small business

Anthony Albanese will use a speech on Thursday to say more help to deal with high power prices is on the way in the May budget.
www.smh.com.au www.smh.com.au
 
SirRumpole said:
I'm sure insiders would have known about this, but it hasn't been in the media from what I've seen(or haven't).

Queensland premier Steven Miles apologises to Pioneer Valley locals about pumped hydro announcement timing​


"
Queensland Premier Steven Miles has apologised to residents who could lose their homes to make way for the world's largest pumped hydro scheme, while insisting it will still go ahead.

The ambitious Pioneer-Burdekin proposal near Mackay is touted as the world's largest pumped hydro scheme.

It would involve constructing three dams adjacent to the Eungella National Park at an estimated cost of $12 billion.

About 50 homes and vast agricultural land could be flooded to make way for the project, which could also displace native platypuses.

Mr Miles fronted an angry crowd of about 150 locals late on Tuesday, who were concerned about the impact on local industry.

It is the first time a premier has met with locals in the region, and Mr Miles apologised for the way affected property owners found out two years ago.

"At the outset I want apologise for the pain and suffering you have felt around the way the initial announcement about this project was made," Mr Miles said."
www.abc.net.au

Premier apologises to Pioneer Valley locals who could lose homes but says pumped hydro scheme will still go ahead

Queensland Premier Steven Miles meets with locals opposed to the Pioneer-Burdekin Pumped Hydro project, saying he is sorry for the "pain and suffering" caused by its announcement, but plans are still moving ahead.
www.abc.net.au www.abc.net.au
Click to expand...

You may imagine that there would be some interest in the "world's largest pumped hydro scheme", but so far there has just been crickets.

Is it real or an April Fool's Day joke? Why are the Greenies so quiet and not chaining themselves to trees, or is it too early in the process for that sort of thing?
 
sptrawler said:
Interesting article on the ABC website about solar farms, especially the part where there is expected to be 30,000 extra electricians required in the near future.
Click to expand...
Very interesting. Also the fact that 50% of the employees building these solar farms are backpackers. A back packer led recovery ?

.......................................
This story was intriguing. Seems as if we can create all the pumped hydro power we need at the drop of an old mine. Could be even more useful for the Rhenergise pumped hydro projects which need less head

Australia has 37 mine sites that could be used for energy storage. What are we waiting for?​

article-7772-hero.jpg
(Image via Flikr)

Timothy Weber & Andrew Blakers
Feb 28, 2024
0


Pumped Hydro Storage

The world is rapidly moving towards a renewable energy future. To support the transition, we must prepare back-up energy supplies for times when solar panels and wind turbines are not producing enough electricity.

One solution is to build more pumped hydro energy storage. But where should this expansion happen?

Our new research identified more than 900 suitable locations around the world: at former and existing mining sites. Some 37 sites are in Australia.
Huge open-cut mining pits would be turned into reservoirs to hold water for renewable energy storage. It would give the sites a new lease on life and help shore up the world’s low-emissions future.
reneweconomy.com.au

Australia has 37 mine sites that could be used for energy storage. What are we waiting for?

New research has identified open-cut mining pits that could be turned into reservoirs to hold water for renewable energy storage.
reneweconomy.com.au reneweconomy.com.au
 
basilio said:
Seems as if we can create all the pumped hydro power we need at the drop of an old mine.
Click to expand...
As with all of this, the devil is in the detail.

For example there's a lot of fuss being made at present about the 1GW pumped hydro scheme proposed near Sydney. In particular pointing out that it's using an old coal washing pit plus an existing water supply reservoir and can be built for a quarter the cost of Snowy 2.0

Sounds good?

Well sort of.....

All good that it likely is buildable and as a concept there's nothing wrong with using old coal pits or existing water supply reservoirs. All OK there.

But before anyone gets too excited, it stores 8 GWh. In other words it runs for 8 hours.

Snowy 2.0 stores 350 GWh.

So it's about half the cost per MW of peak power but it's almost 11 times the cost per GWh of energy stored.

Which comes back to something very fundamental. Business gravitates toward things that pick the low hanging fruit, leaving the rest in the proverbial "too hard basket", since that's the approach that makes the most money. Things like the scheme proposed near Sydney provide enough storage for day to day use but that's all, they can't cope with even one calm night and immediately fall back to gas turbines for that, requiring that a fleet of turbines and gas supply infrastructure is indefinitely maintained. Versus the heavily criticised Snowy 2.0 that doesn't have that problem, with much longer storage duration it's able to run flat out for a week if required.

Now neither approach is "good" or "bad", it comes down to what the objective is.

If the aim is to go 100% renewable then SH2 is a great project and we'd be wise to ensure we don't build too many shorter duration storage schemes lest they end up obsolete.

If however the aim is mostly but not fully renewable, well then there's a lot going for the idea of shorter duration storage and gas turbines. Just don't anyone who backs that come back a decade from now and complain about fracking or gas, because once we go down that track it's locked in for longer than any of us will be alive.

That's where the real debate is, indeed that's the only ongoing debate that makes any sense. Less storage backed up with gas turbines? Or more storage and ditch the gas?

Business generally favours small storage (especially batteries) + gas. Lower capital investment required, faster depreciation and since much of the total cost is "pay as you go" there's a lower risk of ending up with a stranded asset.

Engineers are generally employed to make happen what their employer wants to do but to the extent there's a bias, it's generally toward more storage and less or no gas. Not so much because of any love for hydro but more that it's not hard to find an engineer who sees burning gas (or oil) in power stations as a tragic waste of an incredibly versatile resource that could be better used for something else. That's long been the case, it's a broad thought that's been around for many decades and it's a pretty commonly held view. Of all things humans could do with oil and gas, electricity generation seems like the worst possible use short of just setting the stuff on fire in the open. From there comes the preference for hydro, nuclear, coal, geothermal or other renewables.

Environmentalists are split. Those in the "climate" camp generally favour anything that gets rid of gas. Those in the "traditional conservation" camp have an inherent wariness of engineers and hydro schemes, even more so when it's suggested they ought be large scale and involving large volumes of water storage.

Fundamentally those are value judgements. Nobody can "prove" by any method that one is overall the "correct" answer. At most they can say that one is best based on some specific criteria.

My view is government needs to make clear, lasting decisions in regard to those values, that's a proper role for our democratically elected representatives, then once that's done get right out of the way of the scientists, engineers, trades and others who make it happen. That is, decide what the end goal is?

Is some ongoing use of gas / oil acceptable or not? Everything else depends on the answer to that. :2twocents
 
Smurf1976 said:
As with all of this, the devil is in the detail.

For example there's a lot of fuss being made at present about the 1GW pumped hydro scheme proposed near Sydney. In particular pointing out that it's using an old coal washing pit plus an existing water supply reservoir and can be built for a quarter the cost of Snowy 2.0

Sounds good?

Well sort of.....

All good that it likely is buildable and as a concept there's nothing wrong with using old coal pits or existing water supply reservoirs. All OK there.

But before anyone gets too excited, it stores 8 GWh. In other words it runs for 8 hours.

Snowy 2.0 stores 350 GWh.

So it's about half the cost per MW of peak power but it's almost 11 times the cost per GWh of energy stored.

Which comes back to something very fundamental. Business gravitates toward things that pick the low hanging fruit, leaving the rest in the proverbial "too hard basket", since that's the approach that makes the most money. Things like the scheme proposed near Sydney provide enough storage for day to day use but that's all, they can't cope with even one calm night and immediately fall back to gas turbines for that, requiring that a fleet of turbines and gas supply infrastructure is indefinitely maintained. Versus the heavily criticised Snowy 2.0 that doesn't have that problem, with much longer storage duration it's able to run flat out for a week if required.

Now neither approach is "good" or "bad", it comes down to what the objective is.

If the aim is to go 100% renewable then SH2 is a great project and we'd be wise to ensure we don't build too many shorter duration storage schemes lest they end up obsolete.

If however the aim is mostly but not fully renewable, well then there's a lot going for the idea of shorter duration storage and gas turbines. Just don't anyone who backs that come back a decade from now and complain about fracking or gas, because once we go down that track it's locked in for longer than any of us will be alive.

That's where the real debate is, indeed that's the only ongoing debate that makes any sense. Less storage backed up with gas turbines? Or more storage and ditch the gas?

Business generally favours small storage (especially batteries) + gas. Lower capital investment required, faster depreciation and since much of the total cost is "pay as you go" there's a lower risk of ending up with a stranded asset.

Engineers are generally employed to make happen what their employer wants to do but to the extent there's a bias, it's generally toward more storage and less or no gas. Not so much because of any love for hydro but more that it's not hard to find an engineer who sees burning gas (or oil) in power stations as a tragic waste of an incredibly versatile resource that could be better used for something else. That's long been the case, it's a broad thought that's been around for many decades and it's a pretty commonly held view. Of all things humans could do with oil and gas, electricity generation seems like the worst possible use short of just setting the stuff on fire in the open. From there comes the preference for hydro, nuclear, coal, geothermal or other renewables.

Environmentalists are split. Those in the "climate" camp generally favour anything that gets rid of gas. Those in the "traditional conservation" camp have an inherent wariness of engineers and hydro schemes, even more so when it's suggested they ought be large scale and involving large volumes of water storage.

Fundamentally those are value judgements. Nobody can "prove" by any method that one is overall the "correct" answer. At most they can say that one is best based on some specific criteria.

My view is government needs to make clear, lasting decisions in regard to those values, that's a proper role for our democratically elected representatives, then once that's done get right out of the way of the scientists, engineers, trades and others who make it happen. That is, decide what the end goal is?

Is some ongoing use of gas / oil acceptable or not? Everything else depends on the answer to that. :2twocents
Click to expand...
Do you have any insights on the proposed Pioneer-Burdekin pumped hydro scheme?
 
Absolutely, the big problem at the moment is fuel, H2 and bio isn't cost competitive, but down the track that might change.

20 years ago gas turbines were not competitive, as they could only get about 25% efficiency, this was due to limitations on turbine inlet temperatures, that drove the development of combined cycle gas turbines, more complex but raised efficiency to 50%.

Now with technological advances open cycle gas turbines can achieve 45% efficiency.

The only problem really is the cost of making the clean fuel in the quantities required.
It all becomes a circular argument, that unfortunately many can't grasp.
 
Last edited:
SirRumpole said:
Do you have any insights on the proposed Pioneer-Burdekin pumped hydro scheme?
Click to expand...
I posted quite a bit about it when it was first announced but in short, a key issue is there's more than one way of building it, indeed there's actually quite a lot of options for building something there.

At present they're going down the track of 24 hours' storage which, ultimately, does require deep firming from some other means (in practice, gas turbines). Alternative designs are possible, including scaling the whole thing up or alternatively keeping the present scale (or even scaling it down) but changing that to a higher or lower power output in return for a shorter or longer duration.

So on one hand I'll give absolute credit to the Qld state government. They've set up their own hydro company from scratch and they're jumping straight in the deep end of large scale projects. Not only that, they're not afraid to ruffle some feathers politically - Pioneer-Burdekin is literally right next to a National Park and not without controversy for the effects on residents too. So they haven't shied away from hard decisions there.

On the other hand, is 24 hours' storage enough? Well that depends on what the objective is and for that reason, I'm firmly of the view that an overall "master plan" is needed before building $ billions worth of infrastructure. Otherwise there's a risk of building the wrong thing, this isn't a situation where "cross that bridge where we come to it" is a wise strategy. Hence my previous post - society needs to decide the destination. :2twocents
 
At the "home" level, things will probably change significantly across the world as solar has got so cheap it's now a viable form of both roof and wall cladding, and also is inexpensive fencing.
1712964472231.png

The next step is how to make it prettier, and this is quite possible because panel colours can be many and varied:
1712964881127.png


As home battery prices continue to tumble, the need for mass-storage via Snowy 2 type projects gets less pressing, and would be even less of a need if all new EVs had V2G.
 

Similar threads

System
SS1 - Sun Silver
2
Replies
23
Views
5K
Sean K
Sean K
Dona Ferentes
PGTX - Platinum Global Transition Fund
Replies
1
Views
527
Dona Ferentes
Dona Ferentes
System
ASK - Abacus Storage King
Replies
15
Views
3K
finicky
finicky
System
D3E - D3 Energy
Replies
2
Views
1K
Dona Ferentes
Dona Ferentes
ducati916
August DDD
2 3 4
Replies
75
Views
18K
ducati916
ducati916
Top