The future of energy generation and storage

[Smurf1976]

Well, it is clear that the renewable path is not competitive in Australia,where it should be with plenty of open space and sun.

I'll argue that isn't due to renewables but rather, it's due to a list of other issues and that being so, changing the means of generation to something else (coal, nuclear, whatever) won't fix our lack of competitiveness.

Some numbers to illustrate that reality in SA:

Average wholesale spot price for 2023-24 = 7.856 cents / kWh.

Based on retail offers available earlier this week when the calculations were done, a small business using 10,000 kWh per annum (an arbitrary figure just for example) will pay between 44.8 and 53.5 cents per kWh depending on which retailer they choose. So a mid point of 49.15 cents / kWh.

For a residential user consuming a statistically average 6992 kWh per annum and assuming some use of controlled load for water heating totalling 1500 kWh per annum (a low figure but the intent is to look at an average user here - eg many have gas hot water) they'll pay 37.33 cents / kWh with the cheapest retailer and 47.34 cents / kWh with the most expensive. So a mid point of 42.33 cents / kWh.

Note that the above is based on the total amount paid, including both fixed and usage charges.

No realistic change in generation is going to fix what is a structural economic problem in the industry. Even if the wholesale price were literally zero, that only reduces the price paid by small business by about 19% and it reduces residential prices by about 22%. In both cases that's including 10% line losses and another 10% for GST added to the wholesale price for the calculation.

In simple terms, the exclusive focus on the method of generation is not going to fix the retail price problem simply because ~80% of the money paid by consumers isn't going into generation. Halve the cost of generation and your bill goes down about 10%. Etc.

Now the real shocker would be if I pointed out that of the other costs, much of it isn't networks either. Network use of system charges in SA are presently:

72.59 cents / day + 17.14 cents / kWh for small business on flat rate tariff with controlled load charged at 7.56c / kWh.

57.53 cents / day + 15.04 cents / kWh for residential on flat rate tariff with controlled load at 7.56c / kWh.

So for a business using 10,000 kWh the total of wholesale electricity + line losses + network use of system charges + 10% GST comes to 29.3 cents / kWh versus an actual price, using a mid point retailer, of 49.15c / kWh.

Generation is an issue but the real question is the things that are not generation, losses, network costs or tax bearing in mind these other things comprise 40% of the retail price of electricity as per the above. That's where the real inefficiency and ticket clipping is occurring.

 

[SirRumpole]

Generation is an issue but the real question is the things that are not generation, losses, network costs or tax bearing in mind these other things comprise 40% of the retail price of electricity as per the above. That's where the real inefficiency and ticket clipping is occurring.

So is profit margin for a host of fingers in the pie.

 

[sptrawler]

Which all goes back to the electrical grid needs to go back into Government hands, rather than the Govt's continually subsidising a broken system, which isn't supplying cheaper power and is holding the Governments to ransom to further their own profits rather than just improving the grid.
Which in turn will improve Australia's economic future.
Oh what a mess.

 

[qldfrog]

So is profit margin for a host of fingers in the pie.

In that case origin energy and agl would make a killing which they are not: we are on a share forum and this is obvious.
I would suggest that the problem is Australia, the astonishing among if inefficiency, regulation, overpaid BS jobs.
I somewhat believe that if we had carried on coal as usual,there is no way we would have the cost we have, both generation and network would not have required major billions plus investment to go green, our bills would not have 7 or 8 plans each with time of use, daily solar feed , green power selection etc..and so would not have required new meters etc etc
Nor teams in all companies headquarters looking at carbon credit, carbon bilan etc etc

 

[Smurf1976]

In that case origin energy and agl would make a killing which they are not: we are on a share forum and this is obvious.
I would suggest that the problem is Australia, the astonishing among if inefficiency, regulation, overpaid BS jobs.

Nailed it.

Within the industry there's basically four categories of companies:

Shareholder owned. Eg AGL and Origin most obviously.

Privately owned or foreign listed companies. Energy Australia and Alinta most obviously but there's several smaller ones too.

Government owned either federal or state. Red and Lumo are both separate retail brands run by Snowy Hydro, the ultimate owner of which is the Australian government. Meanwhile Hydro Tasmania, the ultimate owner of which is the Tasmanian state government, retails outside its home state under the name Momentum Energy.

Government owned serving only a local market. Eg Ergon in Queensland. Operations outside the home state are extremely limited or zero.

Fundamentally they all have the same problem in that they're all bound by the same market rules, policies, procedures and all the rest. They're all carrying the same dead weights of forced inefficiency.

As two random examples of that:

AGL, which has always been a for-profit shareholder owned company since it's beginnings in 1837, charges more in real terms for gas in Sydney today under a competitive market than it charged 30 years ago as a monopoly gas utility.

Total employment in the Tasmanian electricity industry is today about 60% higher than it was back in 1998 prior to the modern structure of the industry being implemented. Suffice to say the state doesn't have 60% more people etc to justify that. Note that's only employees within the state, it doesn't include HT's interstate and overseas operations.

So both have become visibly less efficient not through their own doing but simply due to the industry structure, regulation and so on. Needless to say, that's going to be passed through to consumers.

Then there's all the hangers on. The reality that the volume of electricity traded financially is several times greater than the total volume of physical consumption. The reality that even quite modest businesses now find it necessary to engage the services of a broker just to obtain gas and electricity and that large business has their own permanent staff managing it. An entire industry of regulators, market operators, consultants, brokers and so on now exists that previously did not exist.

Plus there's scale of economy. The task of reading meters and sending out invoices is a back office function really. It's something that's necessary but it's not what first comes to mind if someone mentions the electricity industry - most would think of transmission lines, the distribution network or power stations not the process of collecting revenue. Rationally it'd be done as cheaply as possible.

But in SA well there's 25 separate companies all vying for a share of a not very big pie. Pacific Blue, Momentum, Kogan, Powershop, Energy Locals, Sumo, Nectr, Origin, iO, Tango, Amber, AGL, Lumo, Red, Ovo, Alinta, Dodo, Diamond, Zen, Energy Australia, Engie, Future X Power, GloBird, 1st Energy.

That's an awful lot of management and administrative overheads just to sell the same electricity, from the same power stations delivered via the same transmission and distribution network, to consumers. That alone is a substantial cost for what rationally ought cost very little.

 

[SirRumpole]

That's an awful lot of management and administrative overheads just to sell the same electricity, from the same power stations delivered via the same transmission and distribution network, to consumers. That alone is a substantial cost for what rationally ought cost very little.

More arguments for a government takeover in my opinion.

Regulations are needed now to protect consumers from unaffordable power prices, no real need for governments to regulate themselves, the consumers will make themselves heard at the next election.

One supply chain means that the hangers on are no longer necessary so inefficiencies are reduced.

Sounds socialist, but we are talking about an essential service and the current system is a demonstrable failure.

 

[qldfrog]

More arguments for a government takeover in my opinion.

Regulations are needed now to protect consumers from unaffordable power prices, no real need for governments to regulate themselves, the consumers will make themselves heard at the next election.

One supply chain means that the hangers on are no longer necessary so inefficiencies are reduced.

Sounds socialist, but we are talking about an essential service and the current system is a demonstrable failure.

From fondamentals i would agree then i just look at current PS, 35h doing 30 maternity paternity break super at 12% and all the lgbt dv ..good luck

 

[SirRumpole]

One opinion on the future of 'green' hydrogen.

Looks like something else the government will have to do itself if they think it's worth the effort.

Why Australia's energy policy continues to be dominated by politics rather than economics

Five months after the federal government committed more than $22 billion over 10 years to boost green hydrogen as an alternative fuel, two major projects have hit the skids.

www.abc.net.au

 

[qldfrog]

One opinion on the future of 'green' hydrogen.

Looks like something else the government will have to do itself if they think it's worth the effort.

Why Australia's energy policy continues to be dominated by politics rather than economics

Five months after the federal government committed more than $22 billion over 10 years to boost green hydrogen as an alternative fuel, two major projects have hit the skids.

www.abc.net.au

Taxes and debts on 2 generations but who cares, the boomers neg gearing and ghw gas are the issues

 

[sptrawler]

One opinion on the future of 'green' hydrogen.

Looks like something else the government will have to do itself if they think it's worth the effort.

Why Australia's energy policy continues to be dominated by politics rather than economics

Five months after the federal government committed more than $22 billion over 10 years to boost green hydrogen as an alternative fuel, two major projects have hit the skids.

www.abc.net.au

Add that to the made in Australia battery manufacturing green can dreaming, that is also now defunct and we are actually going backwards.

Our whole grid will be supported and operated by Chinese batteries, while we spend mega billions on nuclear subs to protect us from our battery supplier, the irony is only surpassed by our smug stupidity IMO.
It's a shame politicians don't have to pass some sort of aptitude test.

 

[qldfrog]

Add that to the made in Australia battery manufacturing green can dreaming, that is also now defunct and we are actually going backwards.

Our whole grid will be supported and operated by Chinese batteries, while we spend mega billions on nuclear subs to protect us from our battery supplier, the irony is only surpassed by our smug stupidity IMO.
It's a shame politicians don't have to pass some sort of aptitude test.

About battery plant:

https://www.news.com.au/technology/motoring/motoring-news/1600-jobs-slashed-as-green-revolution-stalls-at-northvolt/news-story/5d50ac9d945dcf67ccc7e00bdcf2c056

 

[Smurf1976]

From fondamentals i would agree then i just look at current PS, 35h doing 30 maternity paternity break super at 12% and all the lgbt dv ..good luck

One approach there is simply separation in the way it's done in Tasmania.

In short, Hydro employees are not public servants, are not covered by public service awards or conditions, are not covered by any political promise regarding the PS, are not represented by PS unions and so on.

It's a corporation and registered as such. Government ultimately owns it but it's somewhat removed from the rest of government due to that structure.

Another approach that differs from the present is the concept of a shareholder owned regulated utility. So a single entity that's subject to regulation over how it operates but it's not owned by government, being a listed company.

That model has been done before, indeed for most of its history that's what AGL was, Sydney's monopoly gas supplier operating as a regulated utility with quasi-governmental powers and protection by government. Similar models existed with an assortment of regional gas companies in Queensland, Tasmania and on a more centralised state wide scale in SA. All were shareholder owned companies subject to heavy government regulation and legislated protection against being taken over, with the added technicality that in SA the state was also a shareholder in the company.

That model worked well enough with gas so no reason it couldn't be used with electricity. It may be easier to implement ideologically than outright government ownership, and there'd be no shortage of finance - the superannuation funds would almost certainly want to own part of a low risk "can't fail" company albeit one that will only ever produce unremarkable returns.

 

[SirRumpole]

One approach there is simply separation in the way it's done in Tasmania.

In short, Hydro employees are not public servants, are not covered by public service awards or conditions, are not covered by any political promise regarding the PS, are not represented by PS unions and so on.

It's a corporation and registered as such. Government ultimately owns it but it's somewhat removed from the rest of government due to that structure.

Another approach that differs from the present is the concept of a shareholder owned regulated utility. So a single entity that's subject to regulation over how it operates but it's not owned by government, being a listed company.

That model has been done before, indeed for most of its history that's what AGL was, Sydney's monopoly gas supplier operating as a regulated utility with quasi-governmental powers and protection by government. Similar models existed with an assortment of regional gas companies in Queensland, Tasmania and on a more centralised state wide scale in SA. All were shareholder owned companies subject to heavy government regulation and legislated protection against being taken over, with the added technicality that in SA the state was also a shareholder in the company.

That model worked well enough with gas so no reason it couldn't be used with electricity. It may be easier to implement ideologically than outright government ownership, and there'd be no shortage of finance - the superannuation funds would almost certainly want to own part of a low risk "can't fail" company albeit one that will only ever produce unremarkable returns.

Whatever model, the politicians should stay out of decision making and just supply the money and necessary legislation.

 

[sptrawler]

Whatever model, the politicians should stay out of decision making and just supply the money and necessary legislation.

As if that will ever happen, currently we are working on the premise, everything is going fine.
Kurri Kurri is going to run on diesel, Snowy 2 is still digging holes, the coal fired power stations are being paid to keep running by the taxpayer, the hydrogen manufacturing dream has gone around the S bend, the critical battery materials to build the value adding manufacturing industry is following the hydrogen around the S bend and 2030 is only 5 years away.
Yep everything is going great.

 

[SirRumpole]

As if that will ever happen, currently we are working on the premise, everything is going fine.
Kurri Kurri is going to run on diesel, Snowy 2 is still digging holes, the coal fired power stations are being paid to keep running by the taxpayer, the hydrogen manufacturing dream has gone around the S bend, the critical battery materials to build the value adding manufacturing industry is following the hydrogen around the S bend and 2030 is only 5 years away.
Yep everything is going great.

Cynic.

 

[qldfrog]

Cynic.

But we have DV paid leaves, and mentally impaired patient taking holidays in Japan..with their carers,, on the NDIS.
We are progressing
We have to stop believing on IQ: EQ is the new IQ..keep moving with the time guys
We want an electricity grid with EQ.
Compassionate, green and first nation friendly.see any blackout as an opportunity to meditate, getting out of the rat race and enjoy the serenity of candlelights, in harmony

 

[SirRumpole]

But we have DV paid leaves, and mentally impaired patient taking holidays in Japan..with their carers,, on the NDIS.
We are progressing
We have to stop believing on IQ: EQ is the new IQ..keep moving with the time guys
We want an electricity grid with EQ.
Compassionate, green and first nation friendly.see any blackout as an opportunity to meditate, getting out of the rat race and enjoy the serenity of candlelights, in harmony

Cynic * 2.

 

[qldfrog]

Cynic * 2.

After 20y plus looking at the debacle, as an engineer and with @Smurf1976 , it is well past hope, so better laugh at it and care for self.

 

[sptrawler]

Another opportunity, or another project looking for easy Govt funding? As usual time will tell.

Coal town to battery base: WA firm keen to make power move

When one coal-fired power station closes, a green battery gigafactory could open in its place – and this company wants to directly redeploy coal workers.

www.watoday.com.au

When one coal-fired power station closes, a green battery gigafactory could open in its place.

That is the goal of a West Australian company, Auzvolt, that is waiting to hear whether it can set up in the south-west town of Collie and redeploy skilled workers when its power station closes in 2027.

Representatives from the company say the transition from a fossil fuel to a renewable energy industry is one that could be replicated in other parts of Australia, tapping into a workforce in high demand.

The company, based in Perth, plans to open a battery gigafactory that will scale up from repackaging battery cells produced overseas to locally manufacturing five gigawatts of battery storage by 2027.

At full scale, the factory could employ 750 local workers, Prainito said, and provide large batteries for mining firms’ micro grids, as well as smaller models for household solar energy storage.

The batteries will be produced using environmentally friendly technology from Hong Kong firm GRST which won The Earthshot Prize in 2023.

The process uses a water-soluble composite to bind battery elements together, Auzvolt chief operating office Michael Yap said, which makes the batteries slightly cheaper to produce and allows them to be broken down for recycling more easily.

“For us, it’s not just a mission driven by a green message,” he said.
“This translates into real economics, both at a production level and also when we need to recover and reuse those materials again.”
Prainito said the company expected to hear the outcome of its grant application within days.

 

[SirRumpole]

Another opportunity, or another project looking for easy Govt funding? As usual time will tell.

Coal town to battery base: WA firm keen to make power move

When one coal-fired power station closes, a green battery gigafactory could open in its place – and this company wants to directly redeploy coal workers.

www.watoday.com.au

When one coal-fired power station closes, a green battery gigafactory could open in its place.

That is the goal of a West Australian company, Auzvolt, that is waiting to hear whether it can set up in the south-west town of Collie and redeploy skilled workers when its power station closes in 2027.

Representatives from the company say the transition from a fossil fuel to a renewable energy industry is one that could be replicated in other parts of Australia, tapping into a workforce in high demand.

The company, based in Perth, plans to open a battery gigafactory that will scale up from repackaging battery cells produced overseas to locally manufacturing five gigawatts of battery storage by 2027.

At full scale, the factory could employ 750 local workers, Prainito said, and provide large batteries for mining firms’ micro grids, as well as smaller models for household solar energy storage.

The batteries will be produced using environmentally friendly technology from Hong Kong firm GRST which won The Earthshot Prize in 2023.

The process uses a water-soluble composite to bind battery elements together, Auzvolt chief operating office Michael Yap said, which makes the batteries slightly cheaper to produce and allows them to be broken down for recycling more easily.

“For us, it’s not just a mission driven by a green message,” he said.
“This translates into real economics, both at a production level and also when we need to recover and reuse those materials again.”
Prainito said the company expected to hear the outcome of its grant application within days.

Good, but storage doesn't replace generation.