Archive for January, 2018

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.