Budget 2018 was old news for energy policy – the next big headlines won’t come until July


David Blowers, Grattan Institute

As with many previous budgets, matters relating to energy and climate change were relegated to little more than a footnote in Treasurer Scott Morrison’s 2018 budget speech. And even the contents of that footnote told us nothing new.

This will bring relief to some, but cause frustration for others.

No money was set aside for a new coal-fired power station, despite the plaintive calls from the backbench in recent weeks. Nor was there any extra help for consumers struggling with sky-high electricity bills. There was no extra funding for the government’s Emissions Reduction Fund, but neither was money cut from the Australian Renewable Energy Agency or the Clean Energy Finance Corporation.




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What Budget 2018 did contain was three “announcables” – or, to put it more accurately, re-announcables.

First, Morrison declared that adoption of the federal government’s National Energy Guarantee would save the average household A$400 a year on its electricity bills. This is a bit of sleight of hand. Yes, modelling for the NEG shows that consumers’ bills will be on average A$400 lower than in 2017. But much of those savings will occur before the NEG comes into force in 2020.

Second, the treasurer declared that:

All energy sources and technologies should support themselves without taxpayer subsidies. The current subsidy scheme will be phased out from 2020.

The subsidies to which Morrison refers are from the Renewable Energy Target (RET). But it is hardly news that the scheme will to be phased out from 2020. This has been known for a decade. In fact, it’s a bit of a stretch to say the subsidies are being “phased out” at all.

After 2020, existing or new renewable energy projects will still be able to generate the same renewable energy certificates for every megawatt hour of electricity they produce, which they can then sell to retailers. The ability to generate certificates – and therefore generate a subsidy – will only end in 2030. The difference between the pre- and post-2020 RET is that there will be no annual increase in the target.

Finally, the treasurer pledged that the federal government will keep up the pressure on the big energy companies to give consumers better electricity and gas deals. This announcement is a signal as to when we can expect to see the next real action from the government on energy. It will come in July, when Morrison receives the report on the Retail Electricity Pricing Inquiry, which is being carried out by the Australian Competition and Consumer Commission (ACCC).




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The Turnbull government will be keen to act on the ACCC’s recommendations, given the looming federal election and the pressure on all politicians to find a way to cut voters’ energy bills.

The ConversationSo if we want some real headlines on energy, rather than some reheated footnotes, we will be waiting for a couple of months yet.

David Blowers, Energy Fellow, Grattan Institute

This article was originally published on The Conversation. Read the original article.

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Federal government sets sights on August approval for National Energy Guarantee



File 20180420 163995 ieadn4.jpg?ixlib=rb 1.1
Josh Frydenberg met with state energy ministers in Melbourne the latest round of discussions over the National Energy Guarantee.
AAP Image/Luis Ascui

Michael Hopkin, The Conversation

Federal energy minister Josh Frydenberg says he is confident of securing state governments’ support for the National Energy Guarantee, with a final decision now timetabled for August.

At a meeting today, state energy ministers agreed to progress towards a final version of the policy, which aims to ensure a reliable electricity supply while also cutting the sector’s greenhouse emissions by 26% by 2030.

Details of the policy were first unveiled in October 2017, after the federal government opted against Chief Scientist Alan Finkel’s recommended Clean Energy Target. It features two components: a “reliability guarantee” and an “emissions guarantee”.



The Conversation, CC BY-ND

Under the latest iteration of the policy, developed by the Energy Security Board, electricity retailers would be required to ensure they do not exceed a certain level of greenhouse emissions per unit of electricity sold. They would also be expected to invest in extra generation capacity in advance of any forecast shortfall, so as to ensure reliability.

Grattan Institute energy analyst David Blowers wrote this week that although the 26% emissions target is far too modest, the policy could deliver much-needed bipartisan political support. It would create investment certainty and then could be ramped up later.

But RMIT’s Alan Pears previously wrote that the government’s slow and modest policy ambition has been overtaken by the breakneck pace of change in renewables and energy efficiency.

Economic analysts have voiced fears that the policy’s “technology-neutral” approach is a stalking-horse for coal and may put the brakes on renewable energy investment in Australia.

Frydenberg today confirmed that the policy will not prevent states from pursuing their own more ambitious renewable energy targets. But he said the overall emissions reduction target for the electricity sector will not be increased beyond 26% by 2030.

“States can knock their socks off with their own renewable energy schemes, as long as they meet their reliability obligations under the National Energy Guarantee,” he said.

The ConversationAsked about the views of the Monash Forum, a grouping of Coalition MPs that has agitated for new government-funded coal-fired power stations, Frydenberg said he did not expect any new coal stations to be built. But he said it was likely that Australia’s 20 existing coal power stations would continue to attract private investment.

Michael Hopkin, Section Editor: Energy + Environment, The Conversation

This article was originally published on The Conversation. Read the original article.

AGL’s plan to replace Liddell is cheaper and cleaner than keeping it open


span>Kriti Nagrath, University of Technology Sydney

The Commonwealth government called last week for AGL Energy to consider selling its Liddell power station to rival Alinta.

Federal Energy Minister Josh Frydenberg has raised concerns that the scheduled 2022 shutdown of Liddell will affect New South Wales’ energy reliability. It’s suggested the sale would provide a way to keep the ageing power station open past the end of its normal 50-year operating life.

However, AGL responded to government concerns in December 2017 by releasing a replacement plan. Liddell’s theoretical maximum output is 1,800 megawatts (MW), but the firm capacity – the power that can be relied upon at peak time – is 1,000 MW. AGL is confident this can be replaced by a mix of improved efficiency, renewables and demand response.

AGL’s proposal unpacked

Late last year, in response to the Commonwealth government’s pressure, AGL updated its Liddell replacement plan. The updated plan includes generator efficiency upgrades, new natural gas and renewable energy generation capacity, and demand response.

This plan builds on the planned 2022 closure of the Liddell station. Phased investments in new, low-emissions generation and upgrades to existing generation will replace the 1,000 MW of coal-fired power by:

  • increasing the capacity of AGL’s nearby Bayswater coal-fired power station by 100MW
  • installing 750MW of high-efficiency gas power (at potential sites in Newcastle and/or elsewhere in NSW)
  • adding 1,600MW of new renewable generation capacity (wind and solar farms)
  • providing 100MW of firm capacity from demand response and 250MW from battery storage.

The replacement portfolio is split into three stages. The first aims for 550MW of new generation: 300MW from two solar power plants, to be built by third-party developers, and 250MW from a new gas peaking power station located at Newcastle (or other suitable sites in NSW).

Further, AGL has already approved 650MW of wind projects. The Bayswater efficiency upgrade will add 100MW to the capacity without burning any additional coal.

This, along with the 20MW of demand response, will provide the “firm capacity” required to meet existing customer needs, in line with the federal National Energy Guarantee. The “firm capacity factor” is the proportion of the installed capacity (the theoretical maximum) that can be relied upon to be available at peak time.

The next two stages will progressively add new capacity from renewables, battery storage and demand response to meet the energy needs of AGL’s potential uncontracted customers. Stage 2 and Stage 3 feasibility is expected to start by 2020 and 2021 respectively, for a 2022 delivery.

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AGL is relying on the market

AGL’s Liddell replacement plan is designed to provide an equivalent amount of energy and dispatchable power at a similar level of reliability.

The plan’s total investment of A$1.36 billion is more than the A$920 million estimate of the 2027 Liddell extension plan, but once operating and fuel costs are included the average cost of replacement generation is more affordable at A$83 per megawatt hour (MWh), compared with extending the life of Liddell at A$106 per MWh.

Levelised cost of energy based on information sourced by AGL including: the capital cost of the Liddell life extension works as advised by Worley Parsons (Advisian). AGL’s discount rate in line with their commercial target returns. Westpac Banking Corporation’s forecast of the Newcastle coal price discounted based on the lower calorific value required for power station coal. A carbon emissions cost has been included as per AEMO’s ‘moderate’ 2015 scenario.
AGL’s NSW Generation Plan

Though the replacement plan has an installed capacity of 2,900MW, it accounts for a firm capacity of 1,000MW.

The Australian Energy Market Operator has endorsed AGL’s Liddell replacement plan. It said the plan provides more than enough energy and capacity to meet the potential shortfall created by the closure if AGL completes all three stages by the 2022 deadline.

Some of this plan is already under way, as the AGL board has approved the upgrades at Bayswater and Liddell and the new solar and wind power plants. However, the next two stages are dependent on market signals and investments other companies make in new resources.

If stages 2 and 3 of AGL’s plan are not undertaken in time and other market players do not invest, there could be a reliability gap that results in supply interruptions. While this is unlikely to occur, this is exactly the type of problem that the government’s National Energy Guarantee is supposed to fix. The guarantee envisions that retailers carry the responsibility of meeting the required amount for dispatchable energy. Failure to do so would invite financial penalties, with the energy market operator stepping in as the procurer of last resort.

However, AGL has proposed an adequate plan to meet the gap that the Liddell closure would create. It’s ultimately improbable that regulator intervention will be needed.

That said, AGL’s plan is not necessarily the best plan. There are other lower-emission options that are more cost-effective.

The ConversationA study by the Institute for Sustainable Futures (which I have contributed to) proposes a third “clean energy package”, including renewable energy, energy efficiency, energy storage, demand response and flexible pricing. Rather than selling Liddell, if the Commonwealth is looking for low-cost and reliable solutions, this is the approach it should be pursuing.

Kriti Nagrath, Senior Research Consultant, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.

The pro-coal ‘Monash Forum’ may do little but blacken the name of a revered Australian


Marc Hudson, University of Manchester

The coal industry has a new voice in parliament, in the form of the so-called Monash Forum – an informal government faction featuring former prime minister Tony Abbott and backbench energy committee chair Craig Kelly.

The group, which also reportedly contains former deputy prime minister Barnaby Joyce alongside as many as 11 of his Nationals colleagues, is agitating for the government to go beyond its current energy policy and build a taxpayer-funded coal power station.

As several commentators have pointed out, the move is a calculated push by the usual backbench suspects to put pressure on Prime Minister Malcolm Turnbull, two weeks ahead of crucial talks with state and territory leaders over the design of the National Energy Guarantee (NEG).




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Perversely, the Monash Forum’s members want the NEG to prove its “technology neutral” credentials by including coal as well as renewables. And let’s not forget that the NEG policy was cooked up when it became clear that Chief Scientist Alan Finkel’s Clean Energy Target was unpalatable to Coalition MPs (but not economists).

What’s in a name?

In choosing to form a group like this, opponents of action on climate change are trying to give themselves gravitas, in three possible ways.

First and foremost, they are aiming for the “halo effect” of taking a known public figure and claiming some of his (and it’s usually a he) intellectual cachet. First and foremost here are groups named after scientific figures.

In 2000, a group of climate deniers, including the late Ray Evans and former Labor finance minister Peter Walsh, set up the grandly named Lavoisier Group to undermine progress towards Australian ratification of the Kyoto Protocol and a domestic emissions trading scheme. Economist John Quiggin probably said it best when he wrote that the group was “devoted to the proposition that basic principles of physics discovered by, among others, the famous French scientist Antoine Lavoisier, cease to apply when they come into conflict with the interests of the Australian coal industry”.

Then in 2011, opponents of Julia Gillard’s carbon pricing scheme created the Galileo Movement – casting themselves, like their Renaissance namesake, as heroic dissidents to an unthinking orthodoxy.

The second aim is to create a name that implies a stolid, no-nonsense approach to policy. One example is the now defunct Tasman Institute, which was an influential voice against climate action and in favour of electricity privatisation in the 1990s.

The third tactic takes this approach a step further, by creating a name that sounds impartial or even pro-environmental, thus obfuscating the group’s true intent, which is to stymie climate policy. Previous examples include the Australian Industry Greenhouse Network, the Global Climate Coalition, the Australian Climate Science Coalition, and the Australian Environment Foundation, launched in 2005 to the chagrin of the existing Australian Conservation Foundation.

The Monash Forum – with its implied connotations of nation-building and high-minded political debate – is perhaps trying to achieve all three of these goals, this time from within parliament itself rather than the surrounding policy development bubble.

Monash on the march

For the younger readers among us, John Monash was arguably Australia’s most revered soldier, described by British war historian AJP Taylor as “the only general of creative originality produced by the First World War”.

The Monash Forum’s founders also hark back to his role in helping kick-start the exploitation of Victoria’s enormous brown coal reserves in the 1920s.

But the Returned and Services League is not impressed that this former serviceman has been pressed into political service, declaring that “Monash’s name is sacrosanct and should be above this form of political posturing”.

What’s more, the name is bound to create confusion over whether it is affiliated in some way with Monash University (it isn’t), and there will doubtless be some unhappy faces at the Economic Society of Australia’s ESA Monash Forum (which is).

Will coal really make a comeback?

In seeking to deliver new coal-fired power stations, the new Monash Forum is attempting to mine a seam that has already been extensively excavated.

The Minerals Council of Australia, which [merged with the Australian Coal Association in 2013], has been trying for years to kickstart public support for coal. Who could forget the “Australians for Coal” and “Little Black Rock” campaigns, or last year’s “Coal: Making the future possible”?

But the council’s latest energy and climate policy statement refers to coal only once, prompting headlines that it has gone cold on coal. BHP has considered quitting the council over its pugnacious stance, while Rio Tinto is selling off Australian coal assets. The mining lobby may soon have to recalibrate its priorities – lithium, anyone?

The problem for coal’s proponents is that most Australians are keen to see the back of it. The promised global wave of “High Efficiency, Low Emission” coal plants has failed to materialise. And stunts such as Treasurer Scott Morrison waving a lump of coal in parliament are derided by a public who are far more energised by the prospect of renewables.




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When he was prime minister, Abbott tried to sabotage investment in large-scale renewables so as to keep the way clear for fossil fuels. But tellingly, he left subsidies for rooftop solar panels largely untouched, presumably realising that voters saw renewable energy as sensible and viable, on a small scale at least.

The problem for advocates of renewables, and climate action more broadly, is that winning slowly on climate change is the same as losing, as Bill McKibben noted last year.

The ConversationPerhaps that is the ultimate aim of the Monash Forum and those who share its goals. Renewable energy may win in the end, but it will win slowly enough that coal can earn one last payday.

Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of Manchester

This article was originally published on The Conversation. Read the original article.

Barnaby Joyce criticises lack of results on power prices as winter approaches


Michelle Grattan, University of Canberra

Former deputy prime minister Barnaby Joyce says he would be “100%” behind the government constructing coal-fired power stations if that would lower the price of electricity.

“My exasperation is that we have been talking about cheaper power and nothing is happening. No government has dealt with the power issue in a form that has brought down the price over the medium-to-longer term,” he told The Conversation on Tuesday. “The carbon tax’s removal brought it down only briefly.”

One of the signatories of the Coalition backbench Monash Forum’s call for the government to build “Hazelwood 2.0”, Joyce described his support for the group’s manifesto as “like signing a birthday card”, adding: “It would have been more surprising if I didn’t sign it”.

“I want cheaper power prices in country areas for the poor people who can’t afford it. Winter is coming,” he said.

He said the government building a coal-fired power station would be consistent with its planned investment in Snowy 2.0 and its regulatory support for renewable energy.

The public push on coal by the backbench group is being made in the run up to the Coalition’s expected 30th consecutive Newspoll loss.

It is being seen as another hit at Malcolm Turnbull’s leadership. Among those prominent in the group are Tony Abbott and his close allies Kevin Andrews and Eric Abetz. But Joyce stressed that “for me, it’s not about Malcolm’s leadership. It’s about power prices.”

The manifesto has been signed by several Nationals. While signatories may have different motives, some backbenchers have reportedly refused to put their names to it because of the implications and timing for Turnbull.

The name “Monash Forum” refers to first world war general John Monash, who subsequently headed the State Electricity Commission of Victoria, spearheading the development of the Latrobe Valley coal reserves and power industry. Some signatories would have preferred a plainer name.

The manifesto says: “If the government can intervene to build Snowy 2.0, why not intervene to build Hazelwood 2.0 on the site of the coal-fired power station in Victoria that is now being dismantled?

“All the transmission infrastructure already exists; all the environmental permits have already been obtained; and a new, low-emissions coal-fired power station can certainly be built for no more than A$4 billion.”

Turnbull has trumpeted the expansion of the Snowy scheme as one of his big policy initiatives.

Backing coal-fired power has been among the issues Abbott has strongly promoted from the backbench. He said last August: “If we are prepared to go ahead with pumped hydro, and we are neutral on technology, we should certainly be prepared to go ahead with a new coal-fired power station”.

Last week, launching Pauline Hanson’s book, he was highlighting that “we should build new coal-fired power stations”.

The backbench push coincides with the government working to bed down with the states and territories its National Energy Guarantee. This effort has been helped by the recent win by the Liberals in South Australia. The policy is described as “a technology-neutral approach that does not provide direct subsidies to renewables or any other particular technology, creating a level playing field for all energy sources”.

Turnbull said on Tuesday the guarantee “provides every incentive for the energy sector to invest in dispatchable power”.

“[For] those who are concerned that there should be more investment in coal -fired power stations, the [guarantee] puts a premium on dispatchability, 24/7 power. Now coal can obviously provide that, so can gas, so can hydro, so can other technologies.”

Asked whether it was a slight to his leadership that the Monash Forum was formed rather than the normal policy channels followed, Turnbull said the National Energy Guarantee had been endorsed by “the whole Coalition partyroom”.

Tony Wood, energy program director at the Grattan Institute, said it seemed like an extraordinary approach for members of a Coalition government that had championed markets and the private sector to be advocating going back to a nationalised system.

It also seemed highly unlikely that a coal-fired power station would be a commercial investment for the government. “The longer-term prospect of the investment providing a return to taxpayers would be remote. So it would be writing off a relatively new asset in a relatively short time. It would be a highly questionable use of public funds.”

Private investors were not going into new coal-fired power stations because they did not see a prospect of them making money, Wood said.

“It may very well be that keeping existing stations going longer would be justified but that would be relatively modest expenditure,” he said.

Wood said that to lower prices to consumers it would be more cost-effective to give them refunds – although he wasn’t advocating that.

The Conversation“A well-designed NEG, or an equivalent, that provides clear policy on emissions reduction and values reliability will provide the best policy framework to deliver efficient new investment in affordable energy,” Wood said.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

As the Libs claim South Australia, states are falling into line behind the National Energy Guarantee


Kate Griffiths, Grattan Institute

Former prime minister Paul Keating used to say that when you change the government, you change the country. On Saturday South Australians changed their government, and now the country’s energy policy could finally change – and for the better, if current policy uncertainty is put to bed.

Prime Minister Malcolm Turnbull certainly seems to think it will. He is already claiming the SA election result as an endorsement of his National Energy Guarantee.




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Incoming Liberal Premier Steven Marshall has consistently supported a national approach to energy policy, and on his first day in office he pledged to end South Australia’s go-it-alone approach.

But while South Australia’s support is vital, the National Energy Guarantee – which aims to reduce greenhouse gas emissions and ensure reliability in Australia’s National Electricity Market – is not a done deal yet.

Designing the guarantee

The independent Energy Security Board recommended a National Energy Guarantee last October, and the Turnbull government quickly adopted it as policy.

In November, at a meeting of the COAG Energy Council, New South Wales, Victoria and Tasmania voted for work on a detailed design of the guarantee. South Australia and the ACT voted against (Queensland was absent).

The weekend’s election result seems to have brought South Australia into the tent; it certainly draws a line under the tensions between the outgoing premier, Jay Weatherill, and Federal Energy Minister Josh Frydenberg, which bubbled over in a public stoush last year.

But the ACT government still has concerns about the guarantee, and all states will be holding out for more detail on the policy.

In February the ESB released a consultation paper on the design of the guarantee, which indicated that there is much work still to be done.

The design should not be rushed – getting the detail right is crucial if Australia is to tackle climate change and maintain a reliable electricity supply at lowest cost.

The guarantee is a means to an end, not the end itself. It is neither pro-coal nor pro-renewables. It is a mechanism to achieve national targets. The emissions target itself – a 26-28% cut in greenhouse gas emissions relative to 2005 levels by 2030 – remains a political choice of the federal government.

The design must be sufficiently robust to produce the desired outcomes, but should also be flexible enough to allow the emissions target and required level of reliability to change over time. People’s preferences change, new technologies are emerging, and current and future governments will almost certainly need to increase emissions targets under the Paris Agreement.

A design that is flexible in response to alternative political choices has a much better chance of getting unanimous support from the states and territories. A state or territory supporting the guarantee need not endorse the current target.

What next for renewables?

Weatherill famously declared South Australia’s election to be “a referendum on renewable energy”. His defeat almost certainly means that South Australia’s 50% renewable energy target, which Weatherill had pledged to extend to 75%, will be abolished.

But South Australia’s wind, solar and battery projects aren’t going anywhere. While there has been some concern about the future of individual projects, the change in policy won’t affect existing solar and wind farms. Marshall has promised to honour existing contracts. South Australia remains the location of choice for many projects under the federal Renewable Energy Target.

The National Energy Guarantee would not replace or preclude state targets for renewable energy. They achieve different things. A renewable energy target is aimed at guiding and shaping industry investment, rather than specifically reducing emissions (although states have used renewable energy targets in recent years to attempt to cut emissions in the absence of a credible federal scheme).




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South Australia is likely to continue to contribute strongly to a national emissions reduction target, with or without a local renewable energy target. High levels of intermittent renewable energy in the state will require backup generation and demand response to meet the reliability obligation.

Under the guarantee, states and territories can still choose to deliver greater emissions reductions than the federal target. They can do this through renewable energy targets or more direct emissions policies. But individual states that want to pursue these deeper cuts could end up doing the heavy lifting for the nation, unless states can collectively agree to beat the national target.

Unanimous support still needed

The COAG Energy Council will meet again on April 20 to discuss the future of the National Energy Guarantee. With South Australia’s support looking much more likely this time around, the policy can be expected to remain on the table. But all states and territories will no doubt reserve judgement until they have the final design, and that won’t be until the second half of 2018.

The ConversationAustralia is edging closer to finally having a national, integrated, energy and climate policy. We’ve been here before, and previously have let the perfect become the enemy of the good. Let’s not make that mistake again – let’s get a foundation in place to build on. So many politicians have fallen trying. But perhaps Weatherill will be the last.

Kate Griffiths, Senior Associate, Grattan Institute

This article was originally published on The Conversation. Read the original article.

Tesla’s ‘virtual power plant’ might be second-best to real people power



File 20180219 75961 1v3ckk9.jpg?ixlib=rb 1.1
Researchers talk to Bruny Islanders who have signed up to an experimental new method of managing energy.
Chris Crerar

Hedda Ransan-Cooper, Australian National University; Archie Chapman, University of Sydney; Paul Scott, Australian National University, and Veryan Anastasia Joan Hann, University of Tasmania

The South Australian government and Tesla recently announced a large-scale solar and storage scheme that will distribute solar panels and batteries free of charge to 50,000 households.

This would form what has been dubbed a “virtual power plant”, essentially delivering wholesale energy and service systems. This is just the latest in South Australia’s energetic push to embrace renewables, make energy cheaper and reduce blackout-causing instability.




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The catch is that more than a third of the costs of a power system are in the distribution networks, as are most of the faults. A virtual power plant on its own can’t necessarily solve the problems of costly network management.

The bundling of batteries together to power a network doesn’t consider the needs of either households or the network.

To address these problems, we’re trialling technology in Tasmania that intelligently controls fleets of batteries and other home devices with the aim of making networks more flexible, reliable, and cheaper to operate.

The Bruny Island Battery trial

Part of what we need to transition to a more reliable and cleaner grid is better control of power networks. This will improve operation during normal times, reduce stress during peak times, and remove the need for costly investment over the long term.

For instance, sometimes the network simply needs more energy in one particular location. Perhaps a household doesn’t want the grid to draw power from their battery on a particular day, because it’s cheaper for them to use it themselves. Most models of virtual power plants don’t take these different needs into account.

Bruny Island in Tasmania is the site of a three-year trial, bringing together researchers from the the Australian National University, the University of Sydney, the University of Tasmania, TasNetworks and tech start-up Reposit Power.




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Thirty-three households have been supplied with “smart battery” systems, charged from solar cells on their roofs, and a “controller” box that sits between the house and the power lines.

Participants are paid when their batteries supply energy to the Bruny Island network, which is sometimes overloaded during peak demand. Their bills will also go down because they’ll be drawing household power from their battery when it is most cost-effective for them.

In a world first, Network-Aware Coordination (NAC) software coordinates individual battery systems. The NAC automatically negotiates battery operations with the household (via the controller box), to decide whether the battery should discharge onto the grid or not.

In these negotiations, computer algorithms request battery assistance at a price that reflects the value to the network. If the price is too low for the household, for example because they are better off storing the energy for their own use later in the day, the controller will make a counter-offer to the network with a higher price.

The negotiation continues until they find a solution that works for the network, at the lowest overall cost.

The NAC-based negotiation is half of the economic equation. Battery owners will also be compensated for their work in supporting the grid. The trial team are working out a payment system that passes on some of the networks’ savings created by avoiding diesel generator use on Bruny Island.

Solving big problems

The problem of co-ordinating Australia’s 1.8 million rooftop solar installations in one of the longest electricity networks in the world is not trivial.

Distributed battery systems, such as in Tesla’s South Australian proposal, represent one possible future. The question that we’re exploring is how to coordinate large numbers of customer-owned batteries to work in the best interests of both the consumer and the network.

The primary feature of virtual power plants, to lump together resources, runs counter to what is required for targeted distribution network support. Nor do virtual power plants necessarily have to act in the best interest of householders.




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In contrast, we’re trialling technology that acts in the financial interests of householders, to earn value from their batteries by providing location-specific services to networks, at a time and price that suits the customer.

As currently conceived, the South Australian scheme may not be the most cost-effective solution to dealing with our evolving electricity system’s needs. The Bruny trial shows a different possible future grid – one which allows people to produce and store energy for themselves, and also share it, reducing pressure on the network and allowing higher penetrations of renewables.

The Conversation
The Bruny trial is funded by ARENA, and is a collaborative venture lead by The Australian National University, with project partners The University of Sydney, University of Tasmania, battery control software business Reposit Power, and TasNetworks.

Hedda Ransan-Cooper, Research fellow, Australian National University; Archie Chapman, Research Fellow in Smart Grids, University of Sydney; Paul Scott, Research fellow, Australian National University, and Veryan Anastasia Joan Hann, PhD Candidate – Energy Policy Innovation, University of Tasmania

This article was originally published on The Conversation. Read the original article.

Explainer: power station ‘trips’ are normal, but blackouts are not


Hugh Saddler, Australian National University

Tens of thousands of Victorians were left without power over the long weekend as the distribution network struggled with blistering temperatures, reigniting fears about the stability of our energy system.

It comes on the heels of a summer of “trips”, when power stations temporarily shut down for a variety of reasons. This variability has also been used to attack renewable energy such as wind and solar, which naturally fluctuate depending on weather conditions.

The reality is that blackouts, trips and intermittency are three very different issues, which should not be conflated. As most of Australia returns to school and work in February, and summer temperatures continue to rise, the risk of further blackouts make it essential to understand the cause of the blackouts, what a power station “trip” really is, and how intermittent renewable energy can be integrated into a national system.




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Blackouts

Initial reports indicate recent blackouts in Victoria were caused by multiple small failures in the electricity distribution system across the state, affecting all but one of the five separately owned and managed systems that supply Victorians.

Across the whole of mainland Australia, very hot weather causes peak levels of electricity consumption. 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.

Parenthetically, electricity distribution systems are vulnerable to other types of uncontrollable extreme environmental events, including high winds, lightning, and bushfires. Sometimes blackouts last only a few seconds, sometimes for days, depending on the nature and extent of the damage to the system.




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These blackouts are very different from those caused by power station “trips”, although they have the same effect on consumers. When electricity is insufficient to meet demand, certain sections of the grid have to be startegically blacked out to restore the balance (this is known as “load shedding”).

It is the possibility of blackouts of this second type which has excited so much commentary in recent months, and has been linked to power station “trips”.

What is a ‘trip’ and how significant is it?

“Trip” simply means disconnect; it is used to describe the ultra-fast operation of the circuit breakers used as switching devices in high-voltage electricity transmission systems. When a generator trips, it means that it is suddenly, and usually unexpectedly, disconnected from the transmission network, and thus stops supplying electricity to consumers.

The key words here are suddenly and unexpectedly. Consider what happened in Victoria on January 18 this year. It was a very hot day and all three brown coal power stations in the state were generating at near full capacity, supplying in total about 4,200 megawatts towards the end of the afternoon, as total state demand climbed rapidly past 8,000MW (excluding rooftop solar generation).

Suddenly, at 4:35pm, one of the two 500MW units at Loy Yang B, Victoria’s newest (or, more precisely, least old) coal-fired power station tripped. At the time this unit was supplying 490MW, equal to about 6% of total state demand.

The system, under the operational control of the Australia Energy Market Operator (AEMO), responded just as it was meant to. There was considerable spare gas generation capacity, some of which was immediately made available, as was some of the more limited spare hydro capacity. There was also a large increase in imports from New South Wales, and a smaller reduction in net exports to South Australia.

By the time Loy Yang B Unit 1 was fully back on line, three hours later, Victoria had passed its highest daily peak demand for nearly two years. There was no load shedding: all electricity consumers were supplied with as much electricity as they required. However, spot wholesale prices for electricity reached very high levels during the three hours, and it appears that some large consumers, whose supply contracts exposed them to wholesale prices, made short-term reductions in discretionary demand.




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A high price for policy failure: the ten-year story of spiralling electricity bills


This (relatively) happy outcome on January 18 was made possible by the application of the system reliability rules and procedures, specified in the National Electricity Rules.

These require AEMO to ensure that at all times, in each of the five state regions of the NEM, available spare generation capacity exceeds the combined capacity of the two largest units operating at any time.

In other words, spare capacity must be sufficient to allow demand to continue to be reliably supplied if both of the two largest units generating should suddenly disconnect.

Forecasting

AEMO forecasts energy demand, and issues market notices alerting generators about reliability, demand and potential supply issues. On a busy day, like January 18, market notices may be issued at a rate of several per hour.

These forecasts allowed generators to respond to the loss of Loy Yang B without causing regional blackouts.

What is not publicly known, and may never be known, is why Loy Yang Unit B1 tripped. AEMO examines and reports in detail on what are called “unusual power system events”, which in practice means major disruptions, such as blackouts. There are usually only a few of these each year, whereas generator trips that don’t cause blackouts are much more frequent (as are similar transmission line trips).

It has been widely speculated that, as Australia’s coal fired generators age, they are becoming less reliable, but that could only be confirmed by a systematic and detailed examination of all such events.

Managing variable generation

Finally, and most importantly, the events described above bear almost no relationship to the challenges to reliable system operation presented by the growth of wind and solar generation.

With traditional thermal generation, the problems are caused by unpredictability of sudden failures, and the large unit size, especially of coal generators, which means that a single failure can challenge total system reliability. Individual wind generators may fail unpredictably, but each machine is so small that the loss of one or two has a negligible effect on reliability.

The challenge with wind and solar is not reliability but the variability of their output, caused by variations in weather. This challenge is being addressed by continuous improvement of short term wind forecasting. As day-ahead and hour-ahead forecasts get better, the market advice AEMO provides will give a more accurate estimate of how much other generation will be needed to meet demand at all times.




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100% renewable by 2050: the technology already exists to make it happen


Of course, AEMO, and the generation industry, do still get caught out by sudden and unexpected drops in wind speed, but even the fastest drop in wind speed takes much longer than the milliseconds needed for a circuit breaker in a power station switchyard to trip out.

The ConversationAt the same time, as the share of variable renewable generation grows, the complementary need for a greater share of fast response generators and energy storage technologies will also grow, while the value to the system of large, inflexible coal-fired generators will shrink.

Hugh Saddler, Honorary Associate Professor, Centre for Climate Economics and Policy, Australian National University

This article was originally published on The Conversation. Read the original article.

Trust Me I’m An Expert: Why February is the real danger month for power blackouts


Sunanda Creagh, The Conversation

It’s been hot – and it’s going to get hotter. Australia has experienced some record hot days in recent weeks and scientists say Sydney and Melbourne need to prepare for 50℃ days by the end of the century, or sooner.

In today’s episode of Trust Me I’m An Expert, we’re unpacking the research on why some of the most disadvantaged parts of our cities cop the worst of a heatwave.

And Chris Dunstan, an expert on energy policy, explains why February is the month when energy ministers and energy operators really get worried there won’t be enough electricity to go around – and how you can do your bit to curb blackout risk.

Join us as we ask academic experts to explain the issues making news in Australia.

Trust Me, I’m An Expert is out at the start of every month. Find us and subscribe in Apple Podcasts, Pocket Casts or wherever you get your podcasts.


Further reading

Beyond Coal: Alternatives to extending the life of Liddell power station, by the Institute for Sustainable Futures, UTS.

Explainer: power station ‘trips’ are normal, but blackouts are not

Additional music and audio

Kindergarten by Unkle Ho, from Elefant Traks

Ella Fitzgerald and Louis Armstrong, Summertime.

YACHT: Summer Song (Instrumental) from Free Music Archive

Broke For Free: Summer Spliffs from Free Music Archive

Unheard Music Concepts: Hot Summer Day from Free Music Archive

Ketsa: Summer from Free Music Archive

RT: Sizzling Up: Australian policeman fries egg on car hood in 46°C weather via YouTube

Lateline: Cities need adapt to deadly heatwaves from ABC News

ABC news report

ABC news

The ConversationSeven News, January 8, 2018

Sunanda Creagh, Head of Digital Storytelling, The Conversation

This article was originally published on The Conversation. Read the original article.

China wants to dominate the world’s green energy markets – here’s why



File 20180110 46706 fdv34i.jpg?ixlib=rb 1.1

xieyuliang / shutterstock

Chris G. Pope, University of Sheffield

If there is to be an effective response to climate change, it will probably emanate from China. The geopolitical motivations are clear. Renewable energy is increasingly inevitable, and those that dominate the markets in these new technologies will likely have the most influence over the development patterns of the future. As other major powers find themselves in climate denial or atrophy, China may well boost its power and status by becoming the global energy leader of tomorrow.

President Xi Jinping has been vocal on the issue. He has already called for an “ecological civilization”. The state’s “green shift” supports this claim by striving to transition to alternative energies and become more energy efficient.

But there are material benefits as well. China’s proactive response has impacted on global energy markets. Today, five of the world’s six top solar-module manufacturers, five of the largest wind turbine manufacturers, and six of the ten major car manufacturers committed to electrification are all Chinese-owned. Meanwhile, China is dominant in the lithium sector – think: batteries, electric vehicles and so on – and a global leader in smart grid investment and other renewable energy technologies.

This is only a start. There are modest projections that just 20% of the country’s primary energy consumption will come from non-carbon sources by 2030. Nonetheless, China’s sheer size means Beijing’s aggressive pursuit of emergent and expanding renewables markets should not be ignored. After all, dominating such markets has strong material benefits, while pioneering a green revolution provides intangible benefits in terms of state image and prestige.

So what are these benefits? First, concerns over environmental degradation are very real in China, owing to issues such as air, food and water pollution, and should be acknowledged. Beijing doesn’t want food and water scarcity or smoggy skies either, whether for altruistic environmental reasons or concerns over its popular legitimacy.

But it is worth also considering the geopolitical implications of climate change leadership. Take the US for example, historically the largest carbon emitter. The country had previously been active in climate policy, if somewhat hypocritical (support for hydraulic fracturing, for instance). But the current Trump administration is forthright in its baseless denial of climate change, having withdrawn from the Paris Agreement. It has also hired climate deniers to head its environmental agencies and other offices of power.

Contrast this with China, which is becoming increasingly proactive. In 2016 it became the largest shareholder in a new Asian Infrastructure Investment Bank which, along with the BRICS-established New Development Bank, invests heavily in green energy. The two institutions are seen as potential competitors to the IMF and the World Bank.

Of course, the situation is not black and white with China “going green” and everyone else sitting idly by. The Shanghai Cooperation Organisation (SCO), which commits to political, economic and military integration across Eurasia, the world’s largest landmass, for instance, comprises of nations with strategic interests in exporting hydrocarbons and coal. However, the same is true for the more environmentally aware Obama administration which advocated forcefully the Trans-Pacific Partnership that would have overriden attempts to establish green industries and constrained signatory states to its agreements with big business ahead of climate change action.

To this end, former president Obama argued that it was necessary for the US to shape the rules of global trade to US benefit. That being the case, what about China? As a major power, it is strengthening its international agency by pioneering these multilateral alternatives, many of which heavily invest in green energy projects. Through development banks or Asian trade agreements, China can provide an alternative vision to an international integration ostensibly based on the universal values espoused by the US and its chief allies.

“Going green”, then, while undeniably necessary, is a useful image or value to uphold as it serves to legitimate Chinese international and regional leadership. In this sense, it mirrors the way G7 nations espouse “democracy” or “freedom”. Going green also happens to be economically viable for those that have the funds to invest, contributing to China’s transition from the world’s manufacturing base to a truly major power.

The ConversationChina’s response to climate change combined with the size of its economy has thrust it to the centre of a global shift. Large-scale funding through Chinese-led multilateral frameworks could see a new energy system emerge – led by China. This would greatly extend its influence on the international political economy at the expense of those major powers unable or unwilling to respond.

Chris G. Pope, Researcher, University of Sheffield

This article was originally published on The Conversation. Read the original article.