When Barnaby Joyce talked to Barrie Cassidy on Insiders last Sunday he said:
- I flew in this morning Barrie, it was a beautiful day, not a puff of wind and if memory serves me correct, it was dark last night, so you switched off your coal-fired power stations, how do you switch on the lights?
Giles Parkinson worked over his “idiocy” in Coalition’s war on cheap power: When fools design energy policy, and everything Parkinson says is true. Renewables, even with “firming” as required by Finkel, are cheaper than coal, but Barnaby may still have a point. You see there has been a ruddy great high sitting over the continent for the last couple of weeks.
Rainfall in the south of the continent with two-thirds of the month complete is only 20% of average. However, the lows have been pushed down towards Antarctica, and the wind has not been blowing very much. When I read Parkinson’s article on Monday night I checked NEM Watch. This is what I saw:
Green is wind, blue is hydro, red is gas, brown is brown coal and black is black coal.
Next day the wind had picked up a bit in Victoria, but even though there was cloud in Brisbane our sunshine was producing more than SA’s wind.
As it happens I took a screen shot back on 5 June, and this is what I saw:
You’ll note that Queensland’s small-scale solar is roughly equivalent to SA’s gas, and again wind is sadly missing. Usually SA’s wind is up there with or ahead of its gas, but for the last few weeks it has been a bit pathetic. Today around midday it’s the most pathetic I ever recall seeing it:
While the sunshine state is feeding 832 MW into the system from roof solar panels, the whole country is only generating 152 MW from wind. Ideally these things are meant to balance, but Queensland is a long way from South Australia.
The Finkel Review gives a lot of space to considering intermittency, the need for dispatchable power and strategic reserve capacity. The relevant recommendations are:
- 3.3 To complement the orderly transition policy package, by mid-2018 the Australian Energy Market Commission and the Australian Energy Market Operator should develop and implement a Generator Reliability Obligation.
The Generator Reliability Obligation should include undertaking a forward-looking regional reliability assessment, taking into account emerging system needs, to inform requirements on new generators to ensure adequate dispatchable capacity is present in each region.
3.4 By mid-2018, the Australian Energy Market Operator and the Australian Energy Market Commission should assess:
• The need for a Strategic Reserve to act as a safety net in exceptional circumstances as an enhancement or replacement to the existing Reliability and Emergency Reserve Trader mechanism.
• The effectiveness of the new licensing arrangements being developed for generators in South Australia and whether they should be applied in other National Electricity Market regions.
• The suitability of a ‘day-ahead’ market to assist in maintaining system reliability.
So, in sum, AEMO would have the responsibility of assessing reliability on a regional basis, and specifying just what form ‘firming’ (new buzzword) would be required of new renewables, which could be in any form, according to Finkel, including batteries, pumped hydro, molten salt or a contract with a gas-fired generator, who would then be required to have gas on hand or contracted, rather than go out and buy it on the spot market.
All this would be overseen by an Energy Security Board (recommendation 7.2) which:
- should be comprised of an independent Chair, supported by an independent Deputy Chair, with the Chief Executive of the Australian Energy Market Operator and the Chairs of the Australian Energy Regulator and the Australian Energy Market Commission as members.
The Finkel recommendations are highly supportive of distributed electricity generation, which he also considers at length, in spite of the Jacobs forecasting pretty much ignoring the impact.
In general, the organisational changes and the tasks to be undertaken recommended by Finkel make a lot of sense. It is pleasing that the LNP party room has adopted 49 of Finkel’s recommendations, leaving the emissions intensity level of the CET (Clean Energy Target) to be worked on.
This is all very well, but Turnbull and Frydenberg have been giving the impression the Finkel is doing the review for them. In fact he’s working for the COAG Energy Council. The LNP government wants states to stop freelancing on electricity matters, but wants to retain the right to do so themselves.
Barnaby Joyce has been calling for a coal-fired power station to be built in North Queensland. Turnbull is now starting to talk about “continuously dispatchable synchronous power”, which is a euphemism for baseload power supplied by coal, gas (which is too expensive) or hydro (which has limited availability with the possible exception of Snowy 2.0, which is still a dream).
Giles Parkinson in Turnbull caves in, declares support for new “clean coal” generator reports that the Government has asked AEMO to identify upcoming gaps in base-load power.
This is not Finkel and Turnbull should not be asking anything of AEMO, they don’t work for him.
Now Turnbull appears amenable to the notion of using a reverse auction scheme to fill the gaps identified. From Parkinson:
- “It would be good if we had a state-of-the-art clean coal power station in Australia,” Turnbull told journalists at a media conference in Canberra on Tuesday.
He said that this did not necessarily mean the federal government would build it, although the question remains if an auction is held, who would be the counter party. He noted that Snowy Hydro plans to build 2GW of pumped hydro with storage, and Canberra is looking to take on full ownership.
Turnbull insisted any auction would be technology neutral, but when asked what technologies could provide “continuous” and “synchronous” power, he mentioned only “clean coal”, gas and hydro, although he noted that gas would be too expensive.
Please note that Turnbull did not rule out government investment. He could just call it ‘good debt’ and virtually print the money.
If Turnbull goes down this track it would be a complete turn-off for private investors.
Meanwhile we have ventures such as the Nowingi solar project a new $660 million large-scale solar and battery storage project in Victoria’s north-west south of Mildura. The plant will have a capacity of 250 megawatts of generation, and an 80-megawatt/160 megawatt-hour battery system. I’m not clever to work out what this means, but I suspect stored power is in single-digit figures as a percentage of plant generating capacity. Given my random observations of the NEM performance above, I tentatively question whether that will be enough, but am mollified by the notion that Finkel would put a skilled group on the job with the ability to make the right calls, rather than just leave it to the market.
I suspect the 3% storage figure used by BZE is imported from the European experience, where the weather is different and the system overall is more dense and interactive. Anyway, if Finkel’s recommendations are followed we’ll learn as we go.