In recent days we’ve had two articles – Giles Parkinson’s Coalition’s myth about renewables and high electricity prices at RenewEconomy and Ben Potter’s front page article for the AFR, published in print as Power crisis brings back fossil fuels.
First up, here’s the average monthly spot prices for the mainland states involved in the National Electricity Market (NEM):
In July prices have averaged about $360MWh in SA so far this month, basically off the chart, compared to $80-90MWh in Victoria and NSW. At one point they hit the maximum price of $14,000MWh.
Both articles agree that high gas prices, determined by the export market, have been a problem. The two most efficient gas power stations with the lowest emissions in the country have been closed down – Swanbank E in Queensland and Pelican Point in SA – because they became uneconomic from the high gas prices.
Both articles agree that demand has been unexpectedly high, largely because of the cold weather. Moreover, SA is also waiting until July 25 for an enhanced connector to Victoria.
As a consequence the SA Government has had to approach the owners of Pelican Point to crank it up again.
Potter has this to say:
- Energy experts say South Australia’s heavy reliance on wind energy is compounding its problems in two ways, first by forcing the remaining baseload generators to earn more revenue in shorter periods of time when the wind isn’t blowing, and secondly by forcing baseload coal and gas generators out of the market altogether.
But renewable energy advocates say the state’s plunge on wind power is not to blame, and the problems are a continuation of South Australia’s history of paying above average prices because of its isolation and concentration of its generation capacity.
Parkinson quotes Pitt & Sherry energy analyst Dr Hugh Saddler, who says:
- “Looking over the whole period since AEMO (the Australian Energy Market Operator) began comprehensive reporting of wind generation, there is in fact no relationship between the share of wind generation and wholesale prices in SA.”
However when he looked at the relationship between wind generation and high wholesale electricity prices in two recent months in SA and Victoria, the two states with the most significant shares of wind generation in total supply, he found a strong inverse relationship between market price and wind generation is found. The higher the share of wind generation, the lower the price.
That doesn’t completely answer the issues raised in Potter’s first quoted paragraph. A market that gets rid of more efficient gas but keeps cheaper coal is not what we want.
In addressing this issue, the question of ‘baseload’ is a distraction. If networked over a large enough area incorporating different climatic conditions, baseload renewables, especially with solar storage for overnight, is a piece of cake. The problems are the marginal intermittency in supply, peaks in demand, and the flexible power or storage necessary to cope with a prolonged heat wave, cold snap or when the sun doesn’t shine for two weeks.
Skeptical Science surveys the field and comes to this conclusion:
- Arguments that renewable energy isn’t up to the task because “the Sun doesn’t shine at night and the wind doesn’t blow all the time” are overly simplistic.
There are a number of renewable energy technologies which can supply baseload power.
The intermittency of other sources such as wind and solar photovoltaic can be addressed by interconnecting power plants which are widely geographically distributed, and by coupling them with peak-load plants such as gas turbines fueled by biofuels or natural gas which can quickly be switched on to fill in gaps of low wind or solar production. Numerous regional and global case studies – some incorporating modeling to demonstrate their feasibility – have provided plausible plans to meet 100% of energy demand with renewable sources.
They don’t say how much peak load power will be needed, but a small percentage seems assumed, and for 100% the gas turbines have to be powered from renewable sources.
His main target initially was to blast the contention that nuclear is necessary to provide clean baseload power. Beyond that he surveys the same territory as the Skeptical Science piece.
To summarise, looking at other plans, modelling and experience, around 80% renewable power seems eminently doable. Beyond that you may need flexible generation and/or storage at the margin, and he has ideas as to how these might be decarbonised.
He does cite an American study that models 100% renewable energy supply in the USA, including transport and heat, using real wind and solar data over six years. You have to do it in your own patch, however, and pay for it.
Diesendorf tells us:
- The north German states of Mecklenburg-Vorpommern and Schleswig-Holstein are already operating on 100% net renewable energy, mostly wind. The ‘net’ indicates trading with each other and their neighbours.
However, we have to do it in Australia where we don’t have neighbours.
Greg Hunt is using the present experience to take cheap political potshots, saying Labor wants high electricity prices. Christine Milne said, “We are now in the midst of a fight between the past and the future”. For the Coalition it seems the past is winning.
It seems to me that the current system relies heavily on competition within freed-up markets. I doubt that will get us there, certainly not quickly enough.
Labor’s climate change policy under the heading Cleaner Power Generation calls for a 12-month Electricity Modernisation Review working with the COAG Energy Council, NEM agencies, industry, unions and energy users. Sounds like a good idea, given that everyone is not necessarily already convinced of John D’s call for a government renewable auction scheme, like that in the ACT.
Labor’s complementary electricity emissions trading scheme should be quietly put on the shelf to see what the review comes up with.
There’s an extensive article on Intermittent energy source at Wikipedia.