at the end of the tunnel? Andrew Reddaway Alternative Technology - - PowerPoint PPT Presentation

Energy – is there light at the end of the tunnel?

Andrew Reddaway Alternative Technology Association

August 2017

Agenda

Alternative Technology Association

• Who is the ATA?
• Grid tariffs – what’s

the future hold?

• Renewable projects

for farms etc.

• What should

households do?

Who is the ATA?

• Over 6400 members and 14 branches
• Events & community engagement
• Policy & consulting projects
• International projects

Who is the ATA - Publications

Alternative Technology Association

 published since 1980  Energy efficiency, renewable energy, electric cars, retrofitting homes, recycling and reusing  DIY projects  Published since 2005  Sustainable homes case studies including house plans and spec sheets

Your bill

Alternative Technology Association

Fixed charge Energy charges Solar feed-in (exports to grid) No choice.

Where does your money go?

Alternative Technology Association

• NSW: higher network costs.
• Vic: higher retail margin.

Wholesale energy Retail margin Network Charges Green schemes

Source: http://www.aemo.com.au/-/media/Files/Electricity/NEM/Planning_and_Forecasting/EFI/Jacobs- Retail-electricity-price-history-and-projections_Final-Public-Report-June-2017.pdf

Retail costs

National Electricity Market (NEM)

Alternative Technology Association

• Longest grid in world.
• Distribution lines

extend further than transmission lines, and cost a lot more.

• Sized for peak demand

(eg air conditioning)

• Other grids in WA, NT,

Mount Isa etc.

Transmission lines

Network returns are regulated

Alternative Technology Association

• Natural monopoly.
• 13 distributors in the NEM, different areas.
• Regulator approves network tariffs 5-yearly.
• Tariffs allow for regulated return on

investment – low-risk business.

• Businesses have fought regulator decisions in

court.

https://www.aer.gov.au/news-release/federal-court-judgement-on-aer-electricity-and- gas-price-decisions-disappointing-outcome-for-nsw-and-act-consumers

Energy: Wholesale prices

Alternative Technology Association

• Separate prices by state.
• Vary each half-hour.
• Can be volatile

– Range from negative to eyewatering ($16/kWh) – Intentional feature to incentivise peak supply.

• Retailers pay generators.

– Many retailers own generators, to manage risk.

• “Energy-only” market set up in 1998.

– Other designs exist in other countries.

Wholesale prices doubled recently

Alternative Technology Association

https://www.aer.gov.au/wholesale-markets/wholesale-statistics/quarterly-volume- weighted-average-spot-prices

June 2017

Why the price increase?

Alternative Technology Association

• Old coal-fired power stations can generate

cheaply, as they were paid off ages ago.

• Hazelwood closed, short notice (1,600 MW).
• Supply has become tight.
• It’ll take a year or two for new renewables to

cover the gap.

• Gas-fired stations are currently filling the gap.
• Gas has become very expensive recently.

– Due to gas exports from QLD to overseas.

Gas: exports vs domestic

Alternative Technology Association

http://forecasting .aemo.com.au/

Exports Residential & Commercial Industrial Electricity generation

Renewables: New capacity

Alternative Technology Association

https://www.aer.gov.au/system/files/AER%20State%20of%20the%20energy%20market %202017%20-%20A4.pdf

Coal closing Nearly all renewables since 2012 Rooftop solar: 6,000 MW (Not shown on chart)

Where’s the plan?

Alternative Technology Association

The NEM has no coordinated, long-term plan.

• Power stations can close without notice.
• Market forces are expected to incentivise

companies to invest.

• AEMO produces “Statement of opportunities”.
• Climate policies are disjointed add-ons.
• Changes to market rules can take years.

Renewables accelerating

Alternative Technology Association

• In 2017, another 4,100 megawatts of wind

and solar farms will be under construction or completed*. Plus rooftop solar.

• Cheaper than coal and gas, and costs reducing

further, according to many sources inc. AGL**.

• Little incentive for companies to add energy

storage, or services for grid stability.

* https://www.cleanenergycouncil.org.au/news/2017/May/2billion-renewable-energy- investment-2017-unprecedented.html ** https://www.agl.com.au/-/media/DLS/About-AGL/Documents/Investor- Centre/Presentation-and-speech----A-future-of-storable-renewable- energy.pdf?la=en&hash=79A44C65B8D4D1469B8AD04B9C61CAA64C9CD117

Who’s running the show? Tough to answer that!

Alternative Technology Association

http://www2.pv.unsw.edu.au/videos/Penelope-Crossley- 3September2015/slides/Crossley-NEM-presentation.pdf

Plus commercial companies.

Alan Finkel on planning

Alternative Technology Association

"A long-term, integrated grid plan is required... “ "The lack of a transparent, credible and enduring emissions reduction mechanism for the electricity sector is now the key threat to system reliability." "In future, there may be merit in the creation of a single, national transmission planner with a whole-

• f-system focus.”

http://www.environment.gov.au/energy/publications/electricity-market-final-report

What’s the future hold?

Alternative Technology Association

• We expect more turbulence,

– Until the politicians cooperate on a proper plan.

• Electricity prices may moderate as more wind

and solar is built.

• Then may increase again when the

next coal-fired power station closes.

Renewable Energy Opportunities

for farms etc

Alternative Technology Association

Costs have dropped fast for solar panels and large wind turbines. Many opportunities, eg:

• Dedicated solar water pumping for irrigation.
• Grid-connect solar to cut electricity bills.

– Eg food processing.

• Off-grid solar system for buildings.
• Heat for greenhouses.

Solar water pumping

Alternative Technology Association

Vic winery, river up to dam. No grid nearby.

• NEW 30 megalitres per year, 100m head.

– Only allowed to pump 8 months of the year.

• 20 kW (27 HP) electric pump, 100mm pipe.
• Solar system rated at 40 kW (~150 panels).
• Special pump controller, but no batteries.

– Variable Frequency Drive.

• Total cost to winery ~ $150k.
• Ongoing costs are minimal.

Solar water pumping

Alternative Technology Association

Qld peanut farmer, centre-pivot irrigation NSW cotton farm 70 kW Solar Cut diesel bill 60%

Solar water pumping

Alternative Technology Association

WA centre pivot Over 400 panels Cost $300k Eliminates diesel cost < 5 year payback

Grid-connect solar, cut bills

Alternative Technology Association

• Analyse consumption from smart meter.
• Estimate electricity bill savings from solar.
• Feed-in tariffs are now decent: 11.3 c
• Need approval to connect (eg Powercor).

Vic potato farmer: ~ 90 kW solar 200 HP pump, cool store, packing sheds. Electricity bills halved.

Grid-connect solar, cut bills

Alternative Technology Association

• WA’s largest pork producer.
• Already has 360 kW solar, cutting bills 15%.
• Adding 1.8 MW wind generation
• Adding

batteries

Grid-connect solar, cut bills

Alternative Technology Association

Aboriginal community in WA

• 30 kW solar
• Financed via loan for 5 years
• All household bills reduced ~ 20%.

Off-grid for buildings

Alternative Technology Association

Need many panels, compared to grid-connect. Need big batteries and generator for backup. Example of costs:

• Household using 10 kWh per day (low-ish).
• Not compromising lifestyle.
• $50k for whole system.

Off-grid for buildings

Alternative Technology Association

Trust For Nature station near Mildura. Upgrade from previous system. Total cost: $75k

• Batteries rated 62 kWh
• 50 panels (13 kW)

Heat for greenhouses

Alternative Technology Association

Sundrop farms in SA, tomatoes for Coles

• Solar tower collects solar heat
• $200 million build
• Support from CEFC
• 23,000 mirrors
• 39,000 kW power
• Desalinates water
• Heat greenhouses
• 15,000 tonnes/yr

Heat for greenhouses

Alternative Technology Association

40 hectares of glasshouse near Stawell.

• Paired with new 63-turbine wind farm next door.
• Hydroponic vegetables for Costa Group.
• 34,000 kWh batteries.
• $220 million build.
• Vic govt support.
• Heat greenhouse

using heat pumps (like reverse cycle AC).

What should households do?

Alternative Technology Association

• Expect more turbulence, in the absence of

political miracles.

• Shop around for good energy plan.
• Rooftop solar is very worth it: bigger is better.

– Batteries still for early-adopters (for now).

• Plan for appliance replacement & electric cars.

– Gas is no longer a cheap option. – Cheapest heating option is a split-system aircon.

What about other options?

Alternative Technology Association

• Saving electricity is often cheaper than

generating it!

• Energy efficiency includes:

– Insulation – Draft sealing – LED lights – Window shading – Double glazing – Efficient appliances – etc.

Questions?

Alternative Technology Association

Andrew Reddaway Energy Analyst andrew@ata.org.au

Is “new coal” realistic?

Alternative Technology Association

• A coal-fired station is a big, long-term project.
• Needs to run for decades to pay itself back.
• Involves high risk:

– Future environmental policies. – Competition from future renewables. – Resistance from local communities.

Who would build new coal?

Alternative Technology Association

Engie CEO: “We will build no new coal fired power stations”* CS Energy Chief Executive: “It would surprise me greatly if there were ever any more coal-fired technology built in Australia”** AGL CEO: "We do not believe that new coal plants are going to be the lowest cost options in the market.“ *** Energy Australia CEO: “It's not really on our agenda to build new coal (plant)". ****

*http://www.lefigaro.fr/societes/2015/10/14/20005-20151014ARTFIG00267-pourquoi-engie-renonce-a-se- developper-dans-le-charbon.php ** http://www.abc.net.au/news/2017-02-16/coal-power-generator-says-new-plants-not-viable/8277210 *** http://www.abc.net.au/news/2017-06-21/solar-wind-preferred-over-govt-coal-energy-plans-by-agl- ceo/8639992 ****http://www.afr.com/news/agl-energys-andy-vesey-says-coal-investment-doesnt-add-up-20170620-gwv2fq

A 100% renewable grid

Alternative Technology Association

• Multiple studies have found it’s feasible. Need:

– Energy storage to cover calm, cloudy periods. – More transmission lines to share energy around the NEM.

• Massive, long-term project.
• Cost-benefit looks good over the long term.

BZE 2010 CSIRO 2012 For more details and analysis, see http://www.ata.org.au/wp- content/general/One_Hundred_Percent_Renewable_Grid.pdf * http://www.energynetworks.com.au/electricity-network-transformation-roadmap **http://energy.anu.edu.au/files/100%25%20renewable%20electricity%20in%20Australia.pdf UTS 2016 ENA & CSIRO * 2016 ANU ** 2017 AEMO 2013 UNSW 2013

AGL CFO on renewables:

Alternative Technology Association

“Big renewables plus big storage will dominate

• ur energy landscape”

“Transition will be from big coal to big renewables, skipping big baseload gas”

https://www.agl.com.au/-/media/DLS/About-AGL/Documents/Investor-Centre/Presentation-and-speech----A- future-of-storable-renewable-energy.pdf?la=en&hash=79A44C65B8D4D1469B8AD04B9C61CAA64C9CD117

The best plan so far?

Alternative Technology Association

The ANU plan stores energy using oversized farm dams in hilly sheep paddocks.

• Much cheaper than batteries.
• Say 200 dams along dividing range and in SA.
• Storage = 21 hours of average NEM demand.

– 14 hours of peak demand.

• Pumps and turbines help stabilise the grid too.
• Generation capacity ~2 times peak NEM

demand.

**http://energy.anu.edu.au/files/100%25%20renewable%20electricity%20in%20Australia.pdf Includes detailed simulation, engineering and cost analysis.

Cost of electricity from new generators

Alternative Technology Association

https://www.agl.com.au/-/media/DLS/About-AGL/Documents/Investor-Centre/Presentation-and-speech----A- future-of-storable-renewable-energy.pdf?la=en&hash=79A44C65B8D4D1469B8AD04B9C61CAA64C9CD117

Gas Gas Coal Coal Wind Solar

Even if you add energy storage etc, wind & solar are already competitive with coal.

What’s going on in SA?

Alternative Technology Association

• Renewables driven by federal subsidy (RET).
• Concentrated in SA because of:

– Historically high electricity prices. – Great wind resources.

• Reached 40% renewable without good plan.

– All players must share some blame.

• Private companies have no incentive to rectify.
• State govt. was forced to intervene.

How about the blackout?

Alternative Technology Association

• Grid massively stressed due to super-storm.
• AEMO relied too much on wind farms and

interconnector (transmission lines from Vic).

• Some wind farms had software setting AEMO

didn’t know about.

• Those wind farms shut down (others OK).
• Interconnector overloaded -> blackout.
• Software was rectified soon afterwards.

https://www.aemo.com.au/- /media/Files/Electricity/NEM/Market_Notices_and_Events/Power_System_Incident_R eports/2017/Integrated-Final-Report-SA-Black-System-28-September-2016.pdf

Go with Finkel?

Alternative Technology Association

• In the ATA’s view, the Chief Scientist’s

blueprint is:

– Not perfect. – Provides a useful framework. – Much better than current arrangements.

• The key is to develop a credible plan,

and follow it.

• Politics is a major problem.

http://community.ata.org.au/news/ata-analysis-of-finkel-review/

Require renewables to have storage?

Alternative Technology Association

• There are probably better ways to build

energy storage into the grid, but:

– They would require big market reform. – Would take a long time to implement.

• The storage amount should be case-by-case.

– Some states don’t yet need energy storage. – AEMO should determine what’s required.

• Storage doesn’t have to be on-site.

– Can contract with off-site energy storage.

Off-grid, microgrids etc

Alternative Technology Association

• The grid is a great resource to share cheap

renewable energy.

• It makes sense for some towns to go off-grid

– Eg at the end of an expensive, blackout-prone line.

• For households, if the grid is available, going
• ff-grid is expensive and has downsides.

– Excess solar on sunny days is wasted.

Resources

Alternative Technology Association

• http://www.ata.org.au/ata-research/bigger-solar-is-better
• http://www.sanctuarymagazine.org.au/ideas-advice/quit-

grid/

• http://renew.org.au/photovoltaics/just-add-batteries/
• http://www.ata.org.au/news/are-we-still-cooking-with-gas