Archive for January, 2018

In the dark

Sunday’s events in Melbourne as Victorians strove to cope with extreme evening heat and humidity while watching Roger Federer demonstrate his wonderful tennis skills have seen the public energy debate descending in to yet another shouting match with the year barely begun — but whether the right questions will get asked in 2018 is another matter.

It, of course, didn’t take long for clueless politicians to seek to connect 50,000 Victorian households deprived of energy with the State Labor government’s commitment to driving investment in variable renewable power – even though a moment’s thought should have told them that this one was down to distribution network hassles. One of these was no less than the Deputy Prime Minister, Barnaby Joyce, tweeting before engaging his brain cells: “We said Labor’s power policy would cause blackouts over summer and it has.” Similar flatulence was produced by the State leader of the opposition.

The noise, I see, has sparked the ANU’s Hugh Saddler in to pointing out on The Conversation that “the reality is that blackouts, trips and intermittency are three very different issues, which should not be conflated.” He adds: “Unfortunately, for reasons of basic physics, electricity distribution systems do not work well when it is very hot, so the combination of extreme heat and high demand is very challenging. It appears that significant parts of the Victorian electricity distribution system were unable to meet the challenge, leading to uncontrolled blackouts.”

Networks United Energy, CitiPower and Powercor sought to make a similar point to the media but the comment was utterly buried in a long report in The Age as Melburnians blearily tried to cope with Monday morning (and an overnight “low” of 28 degrees after a peak of 38 degrees at 5pm Sunday): “A spokeswoman said substation fuse faults were the main cause of most outages as the mercury climbed past 40 degrees. The prolonged high temperatures and humidity through the weekend significantly increased electricity demand at many locations across the network.”

Upfront in the shouting match, it didn’t take long, meanwhile, for the Victorian Premier, Daniel Andrews, to get out a big stick to wave at the distribution businesses – who, at it happens, charge the lowest network costs of any State and who, in real terms, now bill their customers less than two decades ago even while adding hundreds of thousands of homes to their systems and doubling their operating expenditures (which include maintenance) in nominal terms.

As well, this level of performance hasn’t stopped the Greens’ leader, Richard di Natale, rushing out on Monday to declare that the era of power privatization should be over. (Andrews feels sufficiently pressured by this in seats where Greens are rivals, it seems, that he was soon declaring “most Victorians” would prefer that the State electricity system had not been privatized — two decades ago – “but a State take-over is not possible.”)

The Premier is also rabbiting on about “compelling” the networks to consider compensation for affected households and to improve their systems – while asserting they shouldn’t be “ripping off” consumers by “piling” maintenance costs on to bills.  He apparently is paying no heed to the roles of the Australian Energy Regulator or the process of determining network charges. The AER, after all, is not up for election next November……… and Andrews got the headline he sought: “Daniel Andrews lashes power companies over blackouts.”

Is it worth also noting that 320,000 Victorian homes now have rooftop solar PV (14 per cent of the State total)? One wonders how far this contributes to a “let it rip” approach to air-conditioning when the heat is on even when the sun has gone down?

Energy Networks Australia’s CEO, Andrew Dillon, is pointing out that “because of the period of prolonged, intense heat residential customers are using air-conditioners for longer periods of time, putting significant pressure on electricity networks at a local level.” He adds: “What solar power has done is certainly well and truly clicked the load off at midday and it has helped with these peaks at 3pm or 4pm. But what it’s effectively tended to do is shift them to later in the day, so now we’re starting to see the network peak doesn’t happen until 6pm or 7pm.”

Overall peak demand in the State on Sunday was 9,443 MW around 4pm at which stage rooftop solar was estimated to be contributing about 330 MW – but by 7pm this contribution had effectively disappeared while sweating Victorians still wanting much the same supply.

According to the Australian Energy Market Operator, “Victoria experienced its highest operational demand for a Sunday ever, recording 9,144 MW of demand at 7:30pm.” At this point the Victorian in-State load was being borne by brown coal, gas turbines and hydro power (with fossil fuels representing about two-thirds of the required generation) while some 900 MW was being accessed over interconnection with South Australia, Tasmania and New South Wales (which in turn was sourcing almost 600 MW from Queensland).

Blowing wind

As I write this in the middle of the latest south-eastern Australia heatwave yet another small storm has blown up between federal Energy Minister Josh Frydenberg and poll-bound South Australian Premier Jay Weatherill over the intermittency of wind power — with the former today labeling the latter “the Neville Chamberlain of energy.”

To quote Frydenberg: “The wind was blowing so little in SA during (last week’s) heatwave it was only producing 6.5 per cent of its capacity, which meant (SA) needed to import a stack of power from Victoria (which) was able to do this not only because of its coal-fired assets but also because of hydro-electric power from the Snowy and ­Tasmania.”

He points to last Thursday when it was still 30 degrees in parts of SA at 10.30pm and available wind capacity had dropped to 117 MW, a tenth of what the farms had provided just after dawn that day. Frydenberg argues (not for the first time) that, because of variability issues, “an over-reliance on wind power is causing (both) reliability issues and price volatility” in South Australia. Weatherill, he accuses, has failed to ensure the State has access to sufficient dispatchable power at peak demand periods.

Back in the latter part of last year, on the other hand, you may recall green power boosters getting exercised about wind accounting for 52 per cent of large-scale generation in SA in September and 45 per cent in October. This followed (although I saw no mainstream media reports providing the context at the time) June being probably the least windy month in south-eastern Australia for a decade.

As it happens, I looked at a snapshot of NEM capacity at 7pm last Friday when the available generation in South Australia was 2,503 megawatts against a State need of 2,816 MW – with supply (apart from the balance attained over the transmission line to Victoria which was under constraint at this time) at 1,842 MW from gas turbines, 212 MW from Weatherill’s controversial diesel generators and 428 MW from wind farms supported by 21 MW of battery storage.

Earlier (at around 4pm that day Adelaide time) the State grid requirement was 2,717 MW and local supply was 2,286 MW – with wind farms contributing 282 MW, again leaving the heavy lifting to gas plant (1,880 MW) supported by 157 MW from the diesel units and the flow over the interconnector. In addition, South Australians were using an estimated 365 MW from their rooftop solar systems.

There have been times in the current heatwave, I gather, when South Australians have been relying on interstate transmission for as much as 31 per cent of supply.

Looking this (Monday) morning, I see that at 8.40am in Adelaide the wind capacity contribution in SA was 270 MW and most of the in-State supply was again from gas (913 MW). By just after 11am the wind share was still only 290 MW against 969 MW from gas with the State needing 1,665 MW from the overall grid system. (At this latter point in Victoria wind power was contributing just 98 MW versus 4,254 MW from brown coal plant, 793 MW from gas turbines and 914 MW from hydro sources.)

The total wind farm capacity in South Australia at present is 1,698 megawatts (compared with 1,516 MW in Victoria and 826 MW in New South Wales.) NEM-wide current wind capacity is 4,360 MW.

Of course the variability of wind power is not (or shouldn’t be) news anywhere. In Germany last week, for example, available wind capacity on Friday was half what it had been on Thursday and in next-door France (where nuclear power was accounting for 91 per cent of needs) it was down 60 per cent.

This is the nature of the beast. Hence all the discussion here about the “national energy guarantee” for the NEM and disputation about the total system cost of an east coast grid with a much higher level of intermittent energy than today as the Greens and Labor desire.

It’s also worth noting en passant that the current cost of power for German householders (beneficiaries of the Energiewende) is reported to be 0.305 euros compared with 0.168 euros in France (and the cost for commercial and industrial consumers is 0.152 euros in Germany versus 0.099 in France).

If you scan the media here (green-boosting sites as well as the mainstream), it is notable that every opportunity is taken to talk up VREs (variable renewable energy) and to badmouth coal generation in particular (the anti-gas diatribes here are mostly limited to campaigning against exploration and production – the bans and moratoriums naturally feeding in to limitations on NEM gas-fired power generation).

A case in point in recent months has been reporting here of the rise of VREs in Britain and the decline of coal power. It is interesting, therefore, to dig in to the data for England, Wales and Scotland (Ireland is a different set-up) for past year. Supply (in terms of actual energy sent out) is widely reported to have been up sharply for wind generation – reaching 49 terawatt hours after a 20 per cent increase in capacity over 2016.

Barely noted at all in the media is the overall picture: the Brits obtained 70 TWh from nuclear power last year (a level hardly changed this century), 31 TWh from biomass (that is mostly burning wood), 134 TWh from gas turbines, 23 TWh from coal and about half that from solar (mainly available in summer).

Green PR boisterously sells the line that “Britain was completely coal free for 613 hours” last year in “Britain’s greenest power year ever”. I’ve seen that in any number of reports. Nowhere have I seen 613 hours rendered as 25 days.

Nor (except in the UK version of The Conversation) have I seen the fact that the low level of coal generation over 2017 masks its continued importance in providing capacity during hours of critical peak demand. During the highest 10 per cent hours of power demand of 2017, coal provided a sixth of Britain’s electricity. When it mattered most (which is the depths of winter there rather than our heatwaves), coal was relied on more than nuclear and more than the combined output from wind, solar and hydro (which was twice that of PVs over 2017).

What all this demonstrates in our debate is that, rather than the non-stop Punch-and-Judy show, we should be focusing on the best possible power mix in terms of reliability, affordability and carbon abatement. This is not going to be achieved by demonizing different technologies (and in the case of nuclear power maintaining an absurd total ban) nor by playing games with numbers.

PS: For all the fuss about South Australia, it is a tiddler in the NEM scheme of things. In the past week, for example, it appears the market required 3.8 terawatt hours of electricity – of which 3.3 TWh (or nearly 87 per cent) was produced in Victoria, NSW and Queensland. This share holds good for 12 months, too.

Banish the ban

One of the best (or worst) examples of our national inability to think straight about a reliable electricity strategy for Australia in a world hell-bent on reducing carbon emissions is the ongoing legislative ban on any form of nuclear energy production despite years of safe operation of a 20 megawatt reactor at Sydney’s Lucas Heights (for medicinal and research purposes).

John Howard had a stab at turning things round in 2006 with a task force chaired by Ziggy Switkowski which told him that nuclear power here could become competitive with fossil fuel-based generation in Australia if based on international best practice and with the introduction of low to moderate pricing of carbon dioxide emissions. Without a carbon price, such generation would be 20 to 50 per cent more expensive to produce than coal-fired power. The panel also said that, with deployment starting in 2020, it was conceivable a third of national power supply could be nuclear by 2050.

As we know, Howard lost office the following year and, for a time, we got a carbon price but there was no way that federal Labor (ever looking over its shoulder at the Greens) would embrace nuclear energy.

Then the Fukushima fiasco in Japan in 2011 made any such idea politically untenable here for years, but more recently a royal commission in South Australia proposed that the local legal prohibitions on nuclear power should be removed, suggesting the technology has potential to contribute to supply after 2030.

Commissioner Kevin Scarce recommended in 2016 “the development of a comprehensive national energy policy, which would enable all technologies, including nuclear, to contribute to a reliable, low-carbon electricity network at the lowest possible system cost.”

It would be fair to say, I think, that the nuclear bit did not gain even tepid consideration in the mainstream energy debate and then the “energy crisis” swept us all in to fresh fields.

Last year’s Finkel panel report, sparked by the South Australian blackout, irked advocates of a new approach here to nuclear energy by, in effect, failing to acknowledge it could have a role – but the New South Wales Deputy Premier, John Barilaro, subsequently caused a minor stir by declaring a debate on the issue was “crucial.” (Interestingly Premier Gladys Berejiklian, while saying she was “not convinced” reactors could play a role in NSW, declared she was open to discussing the issue at CoAG.)

The Minerals Council is maintaining pressure for a change of approach, telling the Turnbull government in its latest pre-budget submission that the ongoing ban is “hampering debate about future energy and climate change management,” noting that the policy is “at odds with Australia’s export uranium mining industry.”

The MCA adds that small modular reactors could offer a long-term stable electricity supply to underpin household and industrial needs in mining and other remote towns. The association argues that a new generation of venture-capital backed nuclear start-ups are coming through, with designs for smaller reactors with significantly reduced up-front costs.

This led the Sydney Morning Herald to run a story last week asserting that both critics and supporters of nuclear power “see little future for large-scale (generation) in Australia’s energy mix,” quoting Switkowski as acknowledging that “the window (here) for gigawatt-scale nuclear has closed.”

And this led my friend Barry Murphy to pen a short letter to the SMH which apparently has been ignored.

This is what Murphy, former chairman and CEO of Caltex Australia and former chairman of Delta Electricity, an advocate for the use of small modular reactors, wrote: “It is hard to know whether to laugh or cry about Australia’s confused position on nuclear power. The Minerals Council’s call to have the federal ban on this technology lifted makes good sense. The (energy) minister apparently agrees with this position, but bipartisan and State support is “…not evident right now. “  So nothing happens.

“The continuing obfuscation on this issue is putting Australia’s long-term clean energy portfolio at risk. Current developments with solar and wind (both dependent on electromagnetic radiation from nuclear reactions on the sun) and batteries will all play a part, but issues of scale, timing, cost and reliability will have to be assessed for the longer term. Deliberately refusing to look at how nuclear technology in its modern, smaller, modular form could provide a secure base for these renewables is a mistake. No one in their right mind would put a realistic proposal on the table while ever the ban remains in place. Memo to COAG Energy Council: banish the ban.”

I’m with Murphy on this – and also with the Energy Policy Institute when it argues (as it did in the wake of the Finkel report last year): “Recourse to all new technologies should be part and parcel of strategic energy planning.”

Nuclear power poses a particular dilemma for energy planners, EPIA says – it is a dispatchable, base-load form of zero-emissions power but its deployment in Australia is subject to a moratorium. “One might have thought that each State wishing to introduce a new technology, such as small modular reactors, should have the right to do so with appropriate safety and environmental regulation.”

EPIA executive director Robert Pritchard suggests that places like Ipswich, Mount Isa, Broken Hill, Olympic Dam and the Pilbara could all host SMRs a decade from now if the ban is banished. He says the start of a discussion here should not be about the technology – “that’s a given” – but about community support. “We now realise that politicians will follow the community view,” Pritchard said. “We have to get out and get the community on side.”

Sydney-based SMR Nuclear Technology, of which Pritchard is a director, sent a submission to the Energy Security Board in November declaring it will be “imprudent” not to factor the technology in to its thinking.

SMRs with unity capacity of 50 to 300 megawatts would be particularly suitable for the east coast grid, the company says, arguing that the current national legislative prohibitions were put in place “at a time when there was no real appreciation of the contribution that modern, safe nuclear power plants could make to energy security, affordability and emissions reduction in Australia,”

It seems to me that the appropriate launching pad for a discussion specifically about SMRs in the NEM is the CoAG Energy Council when it next meets in April and the appropriate vehicle for pursuing further consideration is the Energy Security Board.

Time to end the obfuscation?

Missing links

One of the things for which 2017 was notable in electricity supply was the replacement of “base load” in the discussion jargon by “dispatchability” (meaning power that can be sent out in response to demand).

In this context, it is being pointed out that the east coast market (the NEM) has some of the highest levels of dispatchable energy in the OECD – but the key load areas are not well-connected so that it is not uncommon for one sub-region to be experiencing a shortage of supply when three others have a surplus. Also of contextual importance is that there are currently development proposals for 20,000 megawatts of wind and solar power in a market that has 53,000 MW capacity.

The Australian Energy Market Operator includes in its critical tasks, first, the non-negotiable operational and technical requirements for a secure and reliable NEM and, second, “the extent and mix of dispatchable capability required to meet consumer reliability expectations.”

In the latter respect, this involves “the provision of firm and flexible dispatchable capability that will in future depend on the relative cost trajectories of pumped hydro, batteries, solar thermal” as well as gas-powered and coal generation.

So far as New South Wales and Queensland (65 per cent of NEM supply and demand) are concerned, I would think this will mean for at least most of the next decade coal generation supported by gas plants and hydro power, providing most of the electrons and vying in the marketplace with wind power and solar PVs for dispatch.

Notwithstanding green boosterism, the potential for battery storage in this large slab of the market remains a matter for speculation while the role of gas will depend on its wholesale price – and that will depend on how much of the fuel is available on the south-east market.

There is another factor in all this that wasn’t by any means ignored in 2017 but will be getting more attention in the public debate this year, not least because AEMO is now engaged in producing a report on it, due out in mid-2018.

This is in response to the Finkel recommendation, taken up by the CoAG Energy Council, that AEMO interprets as saying it should “develop an integrated grid plan to facilitate the efficient development and connection of renewable energy zones across the NEM.” The actual Finkel wording calls for “the introduction of an integrated grid plan to inform investment decisions and ensure security is preserved in each region as the generation mix evolves”. This, the panel added, “will ensure that we can generate and deliver electricity more efficiently”.

The operator chooses to call this task coming up with “an integrated system plan” because, it says, it is necessary to consider “a wide spectrum of interconnected infrastructure and energy developments including transmission, generation, gas pipelines, and distributed energy resources.”

AEMO acknowledges that the key question is the best way to achieve the NEM-wide policy objectives of affordable, reliable, secure power while meeting carbon emission targets.

The Energy Security Board in its December-released report on the “health” of the NEM says this: “In the longer term the pattern of the transmission grid in the NEM must change. The grid was designed in the last century to run from large coal-fired generators to the load in the cities. It must now be reconfigured so that it runs from renewable energy zones (and dispatchable power resources) to the cities. Planning for this long term change has commenced.”

It seems from the new AEMO issues paper that foremost in its thinking is “what makes a successful renewable energy zone” – adding “REZ” to an already overgrown forest of energy acronyms – and then how to link REZs to the load regions. These are dominated, of course, by the greater urban areas of Melbourne, Sydney and south-east Queensland, between them accounting for three-quarters of the east coast power market whether measured in residential and business consumption or in the number of consumers (aka voters).

AEMO defines “REZ” as areas “where clusters of large-scale renewable energy can be developed to promote economies of scale in high-resource areas and capture geographic and technological diversity in renewable resources.” It intends to identify and map “prospective REZs” across the NEM and already tags Far North Queensland, New England, Snowy 2.0, western Victoria, the Eyre Peninsula, Tasmania and the intersection of South Australia, Victoria and NSW among them.

It also is going to consider “what is the optimal balance between a more interconnected NEM, which can reduce the need for local reserves and take advantage of regional diversity, thereby more efficiently sharing resources and services between regions, and a more regionally independent NEM with each region self-sufficient in system security and reliability?”

Coloring its thinking is a view that up to 30,000 megawatts of new wind and large-scale solar PV capacity could be built in the NEM by 2037. No doubt some stakeholders will be pitching in submissions to suggest this is not the only outcome it should be considering.

Some will be comforted by AEMO flagging that it needs to assess the total costs of these “REZ” developments “relative to other options, including the costs of augmenting the existing transmission network or building new transmission to develop each REZ, along with the costs of any other developments to continue to be able to operate the power system securely once the REZs are developed”.

The operator asserts that the need for transmission augmentation “previously driven by load growth, is now predominantly driven by the changing generation mix and the location of new generation”. To which it adds: “transmission networks in the NEM, designed for transporting energy from coal and gas generation centres, must transform if they are to support large-scale development of non-synchronous generation in new areas”.

The deadline for submissions to AEMO on this review is 2 February, which is not far away.