The future of energy generation and storage

[SirRumpole]

And the issues just keep coming.

Major wind farm withdrawn after more planning delays, downsizing, name changes and fierce opposition | RenewEconomy

Ark Energy pulls plans for its second wind project in six months, this time over repeated planning delays for a project criticised for being too close to world heritage areas.

reneweconomy.com.au

Update on that story.

"A record 130 renewable energy projects are currently being assessed under the federal regime, a process that Clean Energy Investor Group CEO Simon Corbell said "lacks predictability, transparency and timeliness".

More than 100 renewable energy projects are stuck waiting for approval under federal environment laws

More clean energy projects than ever are being assessed under federal environmental laws and it's slowing down the pace of development, according to investors.

www.abc.net.au

 

[sptrawler]

Update on that story.

"A record 130 renewable energy projects are currently being assessed under the federal regime, a process that Clean Energy Investor Group CEO Simon Corbell said "lacks predictability, transparency and timeliness".

More than 100 renewable energy projects are stuck waiting for approval under federal environment laws

More clean energy projects than ever are being assessed under federal environmental laws and it's slowing down the pace of development, according to investors.

www.abc.net.au

Meanwhile time moves on, the coal generators get older and the gas plant probably isn't getting built.

 

[Smurf1976]

Meanwhile time moves on, the coal generators get older and the gas plant probably isn't getting built.

Eraring (NSW) closure still planned for 19 August 2025. There goes 2880 MW.

Torrens Island B (SA) closure still planned for 30 June 2026 although one unit is already mothballed in practice. There goes 800 MW (or 600 MW if the mothballed unit isn't counted).

Plus on the gas supply side we're only about 12 weeks away now from the permanent shutdown of plant 1 at Longford (Vic). That's gas supply not electricity but has relevance.

 

[qldfrog]

Eraring (NSW) closure still planned for 19 August 2025. There goes 2880 MW.

Torrens Island B (SA) closure still planned for 30 June 2026 although one unit is already mothballed in practice. There goes 800 MW (or 600 MW if the mothballed unit isn't counted).

Plus on the gas supply side we're only about 12 weeks away now from the permanent shutdown of plant 1 at Longford (Vic). That's gas supply not electricity but has relevance.

Are you still involved in keeping the lights on?
I remember how frustrated I was dealing with managerial critical wrong decisions working for corporate mining and can only imagine how frustrated it must be....

 

[SirRumpole]

Eraring (NSW) closure still planned for 19 August 2025. There goes 2880 MW.

Torrens Island B (SA) closure still planned for 30 June 2026 although one unit is already mothballed in practice. There goes 800 MW (or 600 MW if the mothballed unit isn't counted).

Plus on the gas supply side we're only about 12 weeks away now from the permanent shutdown of plant 1 at Longford (Vic). That's gas supply not electricity but has relevance.

How capable is Eraring of continuing past 2025?

 

[Smurf1976]

Are you still involved in keeping the lights on?

Suffice to say my current focus is more on identifying what's actually happening, as distinct from what could or should be, so that money can be made or at least not lost.

That nobody's ultimately responsible, there's no single entity the buck stops with, is much of the trouble. Generating companies generate, retailers retail, mining companies mine coal etc, AEMO runs a market, AER regulates the market, and so on but if the lights go out they can and will all point the finger.

 

[Smurf1976]

How capable is Eraring of continuing past 2025?

Technically could get a few more years out of it but trouble is, it's getting awfully short notice now.

They'll be running down maintenance that's a given. So the longer it's left, the bigger the task would be to bring it back up to scratch to continue.

Then there's coal supply contracts.

Then there's staff and realistically at this point most are going to have some sort of plan post-closure. For some they might be retiring and willing to stay on but there'll be others for whom it's a case of sorry but no can do, they'll have some other plan quite likely involving relocation. Bearing in mind in a large portion of cases the workers will have family who'll also be part of any relocation or retirement plan (eg partner retiring at same time for example, or the family's moving to wherever).

Realistically the longer it's left, the harder it's going to be to extend it.

My guess is a 2 (of 4) unit extension is a probable outcome. Consolidate operations to half the plant for a period of time until a delayed final closure.

 

[basilio]

The reality of energy transition.

Wrapping government’s stewardship of the energy transition around these pillars – the need for self-sufficiency and the importance of local manufacturing – provides the government’s best chance of securing on-going social licence for this disruption, particularly among older voters who have been a big barrier to climate action.

This is the political equivalent of rolling up the nation’s sleeves, drawing up a national plan and doing the hard yards together, rather than just barking orders and expecting others to do the work.

Because here’s the truth. Energy transition is hard. Not everyone gets a pony. Jobs will change. Communities will be affected. This is the price of meeting the urgent and existential challenge of global warming. But it is also the prize for doing it well.

At a time when we have lost faith in our existing power structures, we have this one shot at building genuine self-sufficiency and sustainability where energy is a shared natural resource, not one that is hoarded and exploited.

That should be our hard ask.

Here’s the truth: energy transition is hard. Not everyone gets a pony | Peter Lewis

Jobs will change, communities will be affected, but we have a shot at rising to the challenge of global heating

www.theguardian.com

 

[SirRumpole]

Wholesale energy prices plummet while the consumer continually pays more.

A great example of "entrenched inefficiencies" pointed out by @Smurf1976 .

Maybe it's time for governments to take over the middlemen (retailers) who are obviously competing for higher profits not lower prices.

Why have power bills skyrocketed when wholesale electricity keeps getting cheaper?

The wholesale price of electricity in Australia is three times cheaper than it was two years ago, according to new data from Australia's energy regulator, but retailers are still jacking up their prices.

www.abc.net.au

 

[basilio]

Always something new popping up in battery development. This item looks promising in terms of reducing the costs and improving the performance of LiOn batteries.

A Cheaper and More Sustainable Lithium Battery: How LiDFOB Could Change Everything

Scientists have developed an ultralow-concentration electrolyte for lithium-ion batteries. Lithium salts enhance the power of batteries but also increase their cost. A new electrolyte with a very low concentration of the lithium salt LiDFOB could offer a cheaper and more sustainable option. Cell

scitechdaily.com

 

[sptrawler]

Wholesale energy prices plummet while the consumer continually pays more.

A great example of "entrenched inefficiencies" pointed out by @Smurf1976 .

Maybe it's time for governments to take over the middlemen (retailers) who are obviously competing for higher profits not lower prices.

Why have power bills skyrocketed when wholesale electricity keeps getting cheaper?

The wholesale price of electricity in Australia is three times cheaper than it was two years ago, according to new data from Australia's energy regulator, but retailers are still jacking up their prices.

www.abc.net.au

This is where I think the approach by the last Govt was better, in a way it was re nationalising the grid, if the private operators weren't prepared to adapt.
They were told new gas plant needed to be installed and tenders were called, non of the privates put their hands up and Kurri Kurri started.
That format if continued would have forced the privates to adapt, or go out of business, now we have a system in place where it is an open cheque book to meet a target.

 

[SirRumpole]

now we have a system in place where it is an open cheque book to meet a target.

Indeed.

I have always thought that subsidies to private firms should be in return for a portion of equity, ie shares where the taxpayers continually get dividends.

Just giving handouts makes companies dependent on them and they don't have to improve efficiency. If public servants suddenly appear on their boards and they are responsible to taxpayers , they won't get their million $ "incentive" payouts.

 

[sptrawler]

That's the problem with the Govt making a target, but having no control over it, the generators just say well mate you want us to shut down we ain't going to spend flck all on it, so it's your problem.
That's just good business, you can't blame the generators for that.
When Kurri Kurri was announced the Govt said, the AEMO says it's required to transition, if you don't want to put it in the Govt will.
That was a much better model IMO, encourage renewables and if the privates weren't interested in putting in firming, the Govt does it.
It would have caused the legacy private generators to either replace their obsolete coal generation, or lose market share.
Now we have everyone jumping on the target teat.

 

[Smurf1976]

I have always thought that subsidies to private firms should be in return for a portion of equity, ie shares where the taxpayers continually get dividends.

Other models have also worked pretty well in the past.

For example AGL was from 1837 to the 1990's a shareholder owned but in practice quasi-governmental company. The NSW state government officially protected the company in various ways, it couldn't be taken over for example, and granted it a monopoly over gas supply. One the other hand, government also regulated the price charged and required the company to make gas available to any industrial user that needed it, even if extending the pipes wasn't economic.

Or in SA's case historically SAGASCO was the equivalent. A privately owned company as such, but government was the largest shareholder. It didn't just supply gas to Adelaide, it was also one of the early Australian distributors of LPG to rural areas, something government saw as a priority at the time.

Or in Tasmania the Launceston Gas Company, which is the oldest predecessor company ultimately merged into what is now Origin Energy, went a step further. One thing it did, straight after WW2, is get involved with housing construction. The community desperately needed it done and the company had resources to do it. Not a unique situation - AGL once got involved with sealing roads in Sydney a very long time ago. Another "needed doing" situation.

So quite a few historical precedents for various arrangements. The details differ with what's required today but the same concepts could be applied of government working with private enterprise in a mutually beneficial manner.

 

[SirRumpole]

Other models have also worked pretty well in the past.

For example AGL was from 1837 to the 1990's a shareholder owned but in practice quasi-governmental company. The NSW state government officially protected the company in various ways, it couldn't be taken over for example, and granted it a monopoly over gas supply. One the other hand, government also regulated the price charged and required the company to make gas available to any industrial user that needed it, even if extending the pipes wasn't economic.

Or in SA's case historically SAGASCO was the equivalent. A privately owned company as such, but government was the largest shareholder. It didn't just supply gas to Adelaide, it was also one of the early Australian distributors of LPG to rural areas, something government saw as a priority at the time.

Or in Tasmania the Launceston Gas Company, which is the oldest predecessor company ultimately merged into what is now Origin Energy, went a step further. One thing it did, straight after WW2, is get involved with housing construction. The community desperately needed it done and the company had resources to do it. Not a unique situation - AGL once got involved with sealing roads in Sydney a very long time ago. Another "needed doing" situation.

So quite a few historical precedents for various arrangements. The details differ with what's required today but the same concepts could be applied of government working with private enterprise in a mutually beneficial manner.

Yes, whatever arrangements that worked for the benefit of all would be acceptable.

These days though the slavish addiction to market economics by some and the bloated cries of "sovereign risk" scare (some) governments away from any intervention.

 

[qldfrog]

Yes, whatever arrangements that worked for the benefit of all would be acceptable.

These days though the slavish addiction to market economics by some and the bloated cries of "sovereign risk" scare (some) governments away from any intervention.

It is funny how @SirRumpole sees the root of the issue as market economy aka capitalism when I see the mandated push to net zero, decades old talks of closing coal power stations, subsidies and law bypass to "green" projects while preventing gas exploration and usage the cause of our ills.
I think we can all agree that the current type of neither capitalism nor communism energy economy does not work...
When it is your money, aka private find, you do not and should not invest if everything can collapse at the next parliament session decision...
Strangely enough lolll, when it is the taxpayer money, no one seems to care
That is communism..sorry socialism..or even green economy which works well until it doesn't and the country is broke..Venezuela, South America, France, Greece.....
So why Mr Rumpole probably still vote alp and I would vote for anyone but.
Resulting in economic setup purely founded in tax payer money or incentives and based on ideology, and when these ideologies actually kill the tax money streams, we are in short aiming to the deep shxt...

 

[SirRumpole]

It is funny how @SirRumpole sees the root of the issue as market economy aka capitalism when I see the mandated push to net zero, decades old talks of closing coal power stations, subsidies and law bypass to "green" projects while preventing gas exploration and usage the cause of our ills.

I simply point to the fact that when the country had State controlled power systems, prices were about half of what they are now.

Why some people think that commercial operations out for maximum profit can deliver cheaper services than authorities that don't have to make maximum profits is beyond me.

Yes, times have changed, but given that the government has decided to reduce emissions, a properly planned and coordinated approach through State owned systems would be more effective than the endless rounds of concessions, subsidies, regulations and "watchdogs" on the private sector, where people are tripping over their own feet and the prices for consumers only go one way.

 

[qldfrog]

I simply point to the fact that when the country had State controlled power systems, prices were about half of what they are now.

Why some people think that commercial operations out for maximum profit can deliver cheaper services than authorities that don't have to make maximum profits is beyond me.

Yes, times have changed, but given that the government has decided to reduce emissions, a properly planned and coordinated approach through State owned systems would be more effective than the endless rounds of concessions, subsidies, regulations and "watchdogs" on the private sector, where people are tripping over their own feet and the prices for consumers only go one way.

I agree but it is not market economics to blame, it is the crooked mixing of both model.... In a real market economy, the coal plants would produce 24/7 and your bill would be at 10c per kwh
So now if we want to decide on a technology etc..the CO2 stupid fight, then we force an uneconomic model and either we pay private companies to do it..and so pay for cost plus asset investment loans plus profit for said companies whereas obviously..but not so obvious for our leaders of both persuasions , just taking over the lot would make more sense: shareholder profits saved and cheaper credit..
So do we blame root cause..net zero various flavours..or the implementations ...dumb as we both agree..
I tend to blame the..not new..breaking of a working system under this new CO2 fighting faith..as this is what it is,a cult/religion/faith
But it is now too late for sorting either cause or effect imho.
So get your own power system , batteries and watch the show

 

[basilio]

I agree but it is not market economics to blame, it is the crooked mixing of both model.... In a real market economy, the coal plants would produce 24/7 and your bill would be at 10c per kwh
So now if we want to decide on a technology etc..the CO2 stupid fight, then we force an uneconomic model and either we pay private companies to do it..and so pay for cost plus asset investment loans plus profit for said companies whereas obviously..but not so obvious for our leaders of both persuasions , just taking over the lot would make more sense: shareholder profits saved and cheaper credit..
So do we blame root cause..net zero various flavours..or the implementations ...dumb as we both agree..
I tend to blame the..not new..breaking of a working system under this new CO2 fighting faith..as this is what it is,a cult/religion/faith
But it is now too late for sorting either cause or effect imho.
So get your own power system , batteries and watch the show

At some stage, I don't know when QFrog, I'd love to see you recognise the wider range of reasons why moving to a renewable energy economy is so much better for everything.

1) Coal power and other fossil fuels produce toxic gases that kill millions of people a year through direct air pollution. That alone should give one pause for thought

2) Fossil fuels are finite. They are running out. The remaining resources are more difficult to find. Why would one continue down a route that in the very forseeable future will end up with very limited energy supplies ?

3) Fossil fuels are now more costly than renewable energy alternatives. They may not have been a few years ago. They are well proven now and will only become more cost effective. Why would you persevere with a more costly alternative when a proven better outcome is operational ?

4) Yes excess human produced CO2 is cooking the planet. Repeatedly saying it isn't, it doesn't or whatever is not changing scientific reality. IMV that alone is a strong enough reason to make the rapid changes required. The fact that it is far cleaner, cheaper and has a much better long term future are valuable bonuses.

 

[Smurf1976]

It is funny how @SirRumpole sees the root of the issue as market economy aka capitalism when I see the mandated push to net zero, decades old talks of closing coal power stations, subsidies and law bypass to "green" projects while preventing gas exploration and usage the cause of our ills.
I think we can all agree that the current type of neither capitalism nor communism energy economy does not work...

I'll argue the problem is in the detail.

If we look to the past, prior to the present model, then we had not just functional but actually pretty good examples of both government and private ownership between the electricity and gas industries.

AGL ran the gas in Sydney and was always shareholder owned albeit subject to protection by government against being taken over. G&FC in Victoria was 100% state government owned albeit with a privately owned upstream gas supplier (BHP-Esso joint venture). SAGASO in SA was a hybrid - shareholder owned but the state government was the largest shareholder.

They all worked well enough and, crucial point, there was considerable co-operation between them. Among other examples the AGL field service technical manuals were in reality just a reprinted version of the G&FC field service technical manuals to change the company name in the book. Likewise it was SAGASCO that went drilling for gas around Tasmania, thinking it would just sell bulk gas if it found any (which it eventually did, though it's piped to Victoria not Tas).

Similar in the electricity industry. A lot of brown coal tech was actually developed in Victoria under state ownership and it's good enough to have been directly copied by others, indeed there's an actual clone of Loy Yang in the US. Likewise plenty of stuff in Tasmania that was world first when done and which has stood the test of time. WA much the same - Kwinana was actually cited by the International Energy Agency as an example of best practice at one point.

Plenty of co-operation between the states too on technical matters.

So what's gone wrong?

How did we end up in a situation where after adjusting for inflation AGL charges more for gas today than it charged 35 years ago running a monopoly meanwhile the same's happened with state-owned electricity in Tasmania? Ownership hasn't changed so can't blame that.

Ultimately it comes down to the market design being inefficient in multiple ways. It adds a lot of costs at all levels from production to networks to administration. It's a long list of individually small inefficiencies but collectively they're huge, it's big $ all up.

There's a pretty long list of administrative costs which exist today but which didn't previously exist at all. That they exist now is a direct consequence of the market arrangement. Hence it costs your electricity retailer circa $150 a year just to administer a single small account eg household.

Energy cost also has a large administrative overhead now built in. On that I'll simply mention that the volume of electricity traded financially is about 7 times the volume of physical consumption. So there's a huge "big finance" involvement in all this.

Also physical operations. As a random example, 7 small gas turbines in Victoria had a run this evening. Now of itself that seems OK, until I point out two details:

1. The entire output of those 7 turbines could instead have been generated from 2 larger gas turbines that were idle, with that option requiring less fuel and incurring less cost for future maintenance.

2. No it wasn't a test run following maintenance or anything like that. Just "free market" at work noting different owners of different turbines.

Therein lies the problem. Competition and free markets can certainly encourage innovation and lower costs but as with most things that is conditional, it only applies if the cost of having that competition is lower than the benefits it achieves.

When a cost was essentially zero to start with, then no amount of competition can lower it. Instead, the cost of administering a market and multiple participants has to be recovered, that increases cost rather than reducing it.

Likewise if real physical costs are incurred, if real fuel is burned, then there's no way to undo that. Advocates of the market like to pretend that such costs aren't something for consumers to be concerned about, since it's market participants who'll be paying them, but ultimately it's consumers who provide all the money that funds the industry. Burn however much extra gas or diesel and that basically does amount to blowing money up the stack and ultimately consumers pay for that.

So overall yes private ownership can work, so can government ownership, there's firm proof in both cases. Noting there that the historic model of government ownership put engineers in charge not politicians, a point Sir John Monash famously gave an ultimatum over and got what he wanted - he recognised the need to keep politics at arms length from a state-owned utility otherwise it'd be messed up. Over a century later and I think we can say he was spot on correct about that, politicians ought be kept at arms length from technical things.

What's not working is a highly complex "unnatural" market design that comes with high administrative costs and which brings about physical inefficiencies in production. Those costs ultimately can't be recouped from anyone other than consumers.