South Australia’s brave new energy plan may not have been the biggest energy news on Tuesday. The gong may go to Zen Energy‘s plan in cahoots with Santos to provide renewable baseload power.
It works this way. Solar is now the cheapest form of power when the sun is shining. So you supply solar during the day, but store some in a grid-scale battery to provide power when people are up and about at night. Then the battery gets recharged overnight from wind to provide power for the morning start until the sun takes over. The whole thing is backed up by gas. Gas is the backup of the backup.
So why would Santos want to be involved? Basically to save gas so they can flog it elsewhere.
Let’s set that aside for a moment.
Potter says that Zen’s plans could result in as much as 1500 megawatts of power. A few moments ago, around midday our time, SA was producing 1995 MW (according to here), so that’s a fair slice of the SA market, remembering that they could be importing additional power, up to 600 MW, from Victoria. During the February heatwave I believe power consumption was about 3000 MWh.
The Upper Spencer Gulf project looks like about 100 MW, and clearly isn’t the whole story. A Santos executive said:
- “The partnership also opens up exciting opportunities for Santos to introduce solar energy into our gas processing and transport operations in SA and Queensland, lowering our production costs and freeing up gas for release into the domestic market.”
They are talking about their gas processing hubs in Moomba, In SA’s northeast, and at Wallumbilla, east of Roma in Queensland, condensing and pumping gas long distances. That has nothing to do with SA’s grid power.
It is not clear whether the Spencer Gulf project depends on SA’s tender for 75% of its power, I suspect it doesn’t. However, Zen is likely to be bidding for baseload in that contract, so it will be interesting to see how they go.
Moomba and Wallumbilla would have access to artesian water, but I’m fairly sure both places are on very flat land, so pumped hydro would be unsuitable.
Zen also sells batteries, so the ABC story is really about them competing with others, including Tesla, for the 100 MW battery which is part of the SA intervention. My understanding that Elon Musk’s Tesla offer may be financed and happen separately, I’m not sure. Apparently it was pure coincidence that both hit the media at around the same time.
Zen’s use of batteries indicates that use in the fashion they are proposing must be in the ballpark cost-wise. Giles Parkinson says that SA’s 100 MW battery marks the beginning of the battery era in Australia for large-scale grid solutions.
A month ago there was a report that AGL was considering large-scale batteries instead of gas. It depended, it seems, on a change to the 30-minute rule. Bids for electricity supply are currently done by AEMO (the Australian Energy Market Operator) in 30-minute blocks, which is said to favour gas. A change to a 5-minute rule had been proposed by Sun Metals in Townsville, for their 110 MW solar plus battery plant.
This issue was one where AEMO complained to the Finkel review that they couldn’t get an answer from the Australian Energy market Commission, which makes the rules.
Anyway, we are seeing the electricity market tilt towards renewables before our eyes. SA seem to be on board the train. Turnbull and Frydenberg better worry that they won’t be left standing on the station.