Zen Energy’s renewable baseload power

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.

Ben Potter had the story in the AFR, Giles Parkinson has a good article, here’s the Advertiser (paywalled), and the ABC has a story pitting Zen against Elon Musk’s Tesla big battery proposal.

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.

16 thoughts on “Zen Energy’s renewable baseload power”

  1. “Nothing can stand in the way of an idea whose time has come”

    Or, now that you mention it, a combination of technologies….

  2. Yes I think Policy is being stolen by the market.

    I nearly lost my breakfast this morning listening to Turnbull sprouting about our gas reserves and how outrageous it was that we pay such a high price… Heck it was clear over five years ago we had oversold our output, and that legally binding overseas tenders would cause local shortages or great pressure on prices.
    I understand that the gas generators can make more money just selling their gas instead of generating power with it.

    ‘Maybe something interesting will emerge soon.

    I’m a little uncomfortable at the move by Santos. Same paradigm, different actor.

  3. Turnbull has already been caught wrong footed and publicly reacted so to SA’s maneuverings and the Tesla battery offer. I think he already knows that the gas manipulation game will fail and he cannot see how to prevent SA circumventing the AEmC rules. I imagine that there is a lot of arm twisting going on behind the scenes.

  4. Jeeralang Power Station near Morwell is a gas turbine power station with capacity 449 megawatts. It is a peaking facility, and alternatively a “black start” facility, designed to re-start other power stations (brown coal fired) in the event of a major system failure.

    Ref. Wikipedia

    Built by State Electricity C in late 1970s after Newport (gas) power station in Melbourne was scaled back.

    Not sure how quickly it can fire up.
    Uses natural gas from Bass Strait fields.

  5. In the bad old days the Victorian SEC had to deal with its own peaking supply difficulties. I think it had mainly Snowy hydro power as back up.

  6. Ben Eltham says that SA are going to import rapid response turbines for next summer, up to 250MW worth, it is said. Eltham says they will be run on diesel.

    Plus the 100MW mega-battery will be installed by then. Also Tom Koutsantonis will have the ability to order Pelican 2 to be turned on in an emergency. Moreover there will be more solar with batteries in homes by then.

    Should be enough to avoid blackouts from heatwaves.

  7. With all that in place by next summer, you wonder how SA will compare with the rest of the states in terms of stable network and future energy security.

    BilB, it’s ‘Brown Boveri’ and yeah good old Swiss technology. It looks like they are leading in the pumped storage field as well. Their pumped storage project I linked to the other day, is the first to install variable-speed generators. Apparently that technology has a cycle efficiency of 80% compared to the usual 66%. Their advantage is, they can virtually be started and stopped instantly and respond to demand change very efficiently. They are not making much money now, but with the looming developments and trends, in terms of increase in renewables and energy security, that investment looks very save in the longterm.

    Although, interestingly this morning Danni Price from Frontier Economics on RN breakfast, was very dismissive of Malcolm’s renewed interest in pumped hydro as a thought bubble, which will be years away and massive inherited political ad ecological problems, “very good chance it will never happen”. Well worth listening to that interview by Fran Kelly.

  8. I recall dimly discussion of pumped hydro storage circa 1972, when the Rance River Estuary tidal power station had been running for a few years. French.

  9. Ross Garnaut was on ABC radio yesterday, sounding very much like a politician as he talked of the Tesla offer which he said was uninformed. He also spoke of carbon sequestration as though it was still a viable option at some stage.

    Turnbull claimed that gas supplies are assured, but I did not hear any mention of what price that might happen. Anyone else heard?

  10. Pumped hydro at 80% would be very useful, Ootz. You can have pumped hydro without mountains too. Submerged hydro has been investigated and this would be serviceable for offshore wind energy storage. It does require some biggish concrete structures though, however there is a saving in that water does not require channelling, it is simply pumped out of a chamber to the other side of the wall and I suspect is potentially more efficient than turbine energy recovery when vane pumps are used. This can be built as part of the anchor system for very large turbines to provide wind surge energy storage for energy delivery smoothing.

    There are so many opportunities for renewables and the big players fail to, or don’t want to, appreciate that distributed power generation is also all of distributed investment, distributed maintenance cost, and distributed risk.

    The neat thing is that where Solar got its opportunity with feed in tariffs, the excessive reaction by the established energy sector to minimise that cost in very short period to a level where the grid return for roof top solar is trivial while elevating the retail cost of grid energy, it has given rise to the alternative scenario of self consumption through local storage via the Tesla Powerwall (and others). Grid operators have achieved a level of dependency on the high electricity price, and that will only worsen as energy demand falls away to distributed energy production. It is a classic “greed breeds competition” where in this case the competition is the end user who has by far the most to gain. It is beautiful in the certainty of the outcome, and for its being totally contrary to what the industry players wanted.

  11. “beautiful in the certainty of the outcome….”

    Aesthetics, eh?

    Beauty is truth, truth beauty….
    – ode on a Grecian Urn, John Keats

    Cheers!

  12. Dunno about Zen…their trusty chair, Ross Garnaut was on ABC radio talking like a pollie. OK but when he said that CCS was a likely part of the solution I lost interest.

    Watching Frydenberg and Weatherill, I was struck by the AGL logo clearly framed over Frdenbergs shoulder.
    I thought Jay was great.

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