Energy crisis? What energy crisis?

About a month ago Meridian Australia’s CEO Ed McManus said that while the electricity market can turn on a dime, stability had returned to the market and the trend looks good. They had just concluded a swag of hydro, wind and solar power deals which will deliver cheaper electricity than the company could buy in the wholesale market. So their retail arm Powershop was offering a 5 per cent price cut to consumers.

    Electricity contracts for delivery in 2019 were trading at more than $92 per megawatt hour in Victoria and $108/MWh in South Australia a year ago, when SA and NSW had just suffered power shortages and the closure of Victoria’s Hazelwood power station loomed.

    Contracts for 2019 have since fallen to $82.90 in Victoria and $94.36 in SA, while contracts for delivery in Victoria in 2020 and 2021 are trading at $76/MWh and $69/MWh and contracts for 2020 and 2021 in SA are trading at $86/MWh and $85/MWh.

In December last year the Australian Energy Market Commission said in its annual review that a typical household bill of $1433 a year will fall by 12 per cent over the next two years as more wind and solar energy comes into the market. According to the AEMC:

    Wholesale electricity costs will fall by about a third to $405 as National Electricity Market costs fall, network charges will rise slightly to $628, and charges for environmental measures such as renewable energy targets and solar feed-in-tariffs will increase by a fifth to $89.

Those articles were all in the Australian Financial Review, which business leaders are likely to read. Do politicians read the AFR, or do they get their news from the Murdoch Australian?

On Tuesday Ben Potter had another article in the AFR Five ways the power grid changed for the better over summer, the second hottest om record.

Here are some interesting graphs. First, electricity prices:

In Queensland rooftop solar shaved as much a 1000MW off the daily peaks:

And in SA:

Here’s how renewables delivered against brown coal and gas during the peaks:

Coal doesn’t respond to peaks. And it is prone to fry on hot days which are increasing in number:

AEMO notes in its Quarterly Energy Dynamics for the December quarter that two new participants, Hornsdale Power Reserve (the 100MW Tesla battery at Neoen Australia’s Hornsdale wind farm in SA) and EnerNOC, a US-based wholesale demand response firm, entered the FCAS (frequency control ancillary services) markets during the second quarter, reducing costs in this sector.

As to the future, Ben Potter’s article says:

    With more than 5000MW of large-scale wind and solar capacity under construction, and more than 1000MW of rooftop solar going in each year, these trends can only accelerate. If regulatory hurdles can be overcome, demand response will grow in leaps and bounds.

    Plans for “virtual power plants”, rooftop solar panels home batteries and other “behind the meter” energy resources, are becoming more ambitious. The same goes for plans for “synthetic power plants” – combinations of wind, solar, gas, pumped hydro, demand response and batteries proposed by AGL Energy and Whyalla steelworks owner Sanjeev Gupta’s GFG Alliance.

So in terms of price and supply, the markets seem to have the matter in hand. The last thing we need is the Commonwealth Government blundering around intervening and telling private enterprise what to do. This is effectively what Malcolm Turnbull and his mates are doing in telling AGL to keep Liddell open, or sell it to someone who will.

AGL has a $1.4b Liddell replacement scheme. Governments should let the market fill supply gaps for best results for consumers, Audrey Zibelman, chief executive of AEMO, said in her advice to the Turnbull government last month. Her advice is that Malcolm Turnbull’s bid to flog Liddell to Alinta is ill-advised.

    In other words, don’t panic and blunder into a market you barely understand (not her words) because you will just make things worse.

The AFR has picked up her theme and pointed out that the Commonwealth Snowy 2.0, the SA $550 million energy plan, and now the Victorian big battery plan are already examples of government intervention in the market, which for free enterprise operators creates sovereign risk.

There’s more.

Turnbull, of course, is being pressured by his reactionary, nativist right who have launched the Monash Forum to promote coal power, as BHP Billiton finally quits the World Coal Association because of its climate change policies.

On the Monash Forum Marc Hudson from Manchester University has an excellent article at The ConversationThe pro-coal ‘Monash Forum’ may do little but blacken the name of a revered Australian.

Descendants of Monash have demanded that the use of his name be withdrawn, but these people are too arrogant for that.

Mark Butler told Patrician Karvelas that revamped Liddell power will be more expensive than the alternative renewables, from memory $106 per kilowatt hour to $83, but I can’t find the link. Funny that.

Then as Ben Potter in the AFR again says, there is a significant risk with 50 year-old coal power plants of killing people:

    the boilers, and the pipes running from the boilers to the turbines, are still said to be the original ones, with all the wear, tear and fatigue of 46 years of faithful service.

    Beyond 50 years, the risk of leaks and burst pipes becomes unacceptable. A leak in a boiler can be contained, but if one of the pipes bursts between boiler and turbine, steam can hit workers in the surrounding area, killing or maiming them.

To make Liddell safe and extend its life would cost around $900 million. Alinta is said to be offering around $1 billion. If AGL sold they would be effectively handing over a million customers to their opposition. Their own Liddell replacement plans are around $1.4 billion, which would establish a new facility, able to offer the flexibility of dispatch required by the modern electricity market.

Not surprisingly AGL are not selling:

    AGL will defy pressure by the Turnbull government to sell its ageing Liddell power plant, warning that interference in the market would raise issues of ‘‘sovereign risk’’ that could deter investment in new energy assets.

    Mr Vesey said his rival had indicated in the email a ‘‘desire to engage in a potential acquisition” of Liddell and asked about the purchase process.

    Mr Vesey said he had replied ‘‘we are not in the process of selling so there is no process’’.

On security of supply, that is, the avoidance of blackouts, I can’t find a link, but I understand that on our record this last summer, Australia has the most secure energy system in the OECD.

On emissions, I’m partly finished a post where analysis of the proposed National Energy Guarantee shows that in terms of emissions the NEG will be worse than doing nothing. In other words it will actually preserve the use of coal.

There is an obvious case now for the Commonwealth to return accountability for electricity systems to the states, as the Constitution specifies. This would allow the states to work with the NEM mechanisms now established (ESB, AEMC, AEMO and AER) through GOAG without Commonwealth interference.

You are in the way, Malcolm and Josh. If you stay there you will probably be run over.

68 thoughts on “Energy crisis? What energy crisis?”

  1. You’re right John D, but it is just a matter of moving the decimal point three places to the left.

    Meanwhile Portugal, a country of 92,000 square kilometres and 10 million people, achieved a renewable energy output of 104% in March, my Millennial daughter informed me. Their electricity price 22.8 euro per kWhr (36 Aus cents per unit).

  2. Good on your Brian for saying the obvious to anyone with any business sense ” if AGL sold they would be effectively handing over a million customers to their opposition” out loud. You’ve got to wonder if TurnBull is business savvy, or is he becoming too good at lying by omission.

  3. What we should be doing with our coal…

    …..which returns 500 times the $ earning power of coal, and turns it into an environmentally stable product as near to diamond as can be achieved without it actually being diamond.

    The future is Ceramics, Carbon Fibre, Silicon and Ultra Highly Processed Metals, but all our LNP government wants to do is burn stuff.

  4. Brian,

    A very good summary.

    In today’s The Sydney Morning Herald paper edition is an op-ed headlined Monash Forum trick leaves conservatives divided, by David Crowe, online link here, where it begins with:

    The first thing Ian Goodenough knew about the latest attempt to chip away at Malcolm Turnbull was when a colleague handed him a piece of paper with a picture of John Monash at the top.

    Reading this piece suggests to me the so called Monash Forum was a piece of trickery:

    How that happened says everything about the way the federal Coalition works – or doesn’t – these days. What some MPs thought of as a policy forum was turned into a leadership challenge behind their backs. They were gulled.

  5. Here’s a list of Australia’s current operating coal-fired power stations, ranked for age (oldest first based on commissioning dates), listing the power station name (and state), primary fuel used, year(s) of commissioning, nameplate rated generating capacity >140 MW, and announced year of closure (and years remaining to announced closure or upon reaching 50 years old if undisclosed):

    1. Liddell (NSW), Black coal, 1971-73, 2000 MW, 2022 (4 years);
    2. Yallourn W (VIC), Brown coal, 1975 & 1982, 1480 MW, Undisclosed (7 years);
    3. Gladstone (QLD), Black coal, 1976-82, 1680 MW, Undisclosed (8 years);
    4. Vales Point B (NSW), Black coal, 1978, 1320 MW, Undisclosed (10 years);

    5. Muja (WA), Black coal, 1981 & 1986, 1070 MW, Undisclosed (13 years);
    6. Eraring (NSW), Black coal, 1982-84, 2880 MW, Undisclosed (14 years);
    7. Bayswater (NSW), Black coal, 1982-84, 2640 MW, 2035 (17 years);
    8. Tarong (QLD), Black coal, 1984-86, 1400 MW, Undisclosed (16 years);

    9. Loy Yang A (VIC), Brown coal, 1984-87, 2210 MW, 2048 (30 years);
    10. Callide B (QLD), Black coal, 1989, 700 MW, Undisclosed (21 years);
    11. Mt Piper (NSW), Black coal, 1993, 1400 MW, Undisclosed (25 years);
    12. Stanwell (QLD), Black coal, 1993-96, 1460 MW, Undisclosed (25 years);
    13. Loy Yang B (VIC), Brown coal, 1993-96, 1026 MW, Undisclosed (25 years);

    14. Collie (WA), Black coal, 1999, 340 MW, Undisclosed (31 years);
    15. Callide C (QLD), Black coal, 2001, 810 MW, Undisclosed (33 years);
    16. Millmerran (QLD), Black coal, 2002, 851 MW, Undisclosed (34 years);
    17. Tarong North (QLD), Black coal, 2002, 443 MW, Undisclosed (34 years);
    18. Kogan Creek (QLD), Black coal, 2007, 750 MW, Undisclosed (39 years);

    19. Bluewaters 1 (WA), Black coal, 2009, 208 MW, Undisclosed (41 years);
    20. Bluewaters 2 (WA), Black coal, 2010, 208 MW, Undisclosed (42 years).

    The above information is sourced from the Australian Senate Environment and Communications References Committee inquiry into the Retirement of coal fired power stations Final Report, dated March 2017, specifically from Table 2.1 Australia’s operating coal fired power stations, on page 5. I’ve excluded Queensland’s Yabulu 37.5 MW capacity, and Gladstone QAL 25 MW capacity, and WA’s Worsley (Alumina) 135 MW capacity generators – they are relatively minor.

    Within 10 years, it’s likely that Liddell (NSW), Yallourn W (VIC), Gladstone (QLD), and Vales Point B (NSW) could all be retired, representing a loss of 6480 MW of generating capacity.

    Within 20 years, it’s likely that Muja (WA), Eraring (NSW), Bayswater (NSW), and Tarong (QLD) could all be retired, representing a further loss of 7990 MW of generating capacity.

    Springvale mine is currently the sole supplier of thermal coal, via overland conveyor system, to NSW’s Mt Piper power station. Springvale mine is likely to be fully exhausted by about the end of 2024 (6½ years away). Nearby Invincible mine was recently approved to reopen and could partially supply Mt Piper, via public road, but for only a few years. The only other nearby coal mine with sufficient capacity to fully supply Mt Piper is Angus Place mine, via private road link, currently ‘mothballed’ since 2015, yet its development consent expires in August 2024. Local coal supplies in the Lithgow LGA are likely to be exhausted within about 17 years, necessitating coal to be sourced significantly further away, potentially from Ulan and Wilpinjong mines, north of Lithgow. Currently there is no facility to supply coal to Mt Piper power station via rail transport.

    New generating capacity must be built in time to replace the outgoing/retiring generating capacities, otherwise the risk of blackouts and higher electricity prices will increase in the 2020s and beyond. Doing nothing is not a viable, responsible, energy secure option. Building new coal or nuclear generators are not cheap or timely options.

    Solar thermal with adequate molten salt thermal storage is the only long-term sustainable (30-50+ year life – battery systems have much shorter operating lives), timely (<4 years to build), large capacity (in terms of MW, MWh storage and capacity factor), affordable (SA Aurora project contracted to supply at no more than $78/MWh from year-2020 – cheaper than new gas and probably new HELE coal), reliable ‘around the clock’ supply with adequate thermal storage capacity, ‘dispatchable’ (quick/rapid response within minutes – coal and nuclear cannot achieve this efficiently), zero-carbon and particulate emissions (gas- and coal-fired generators with CCS cannot achieve zero-carbon and particulate emissions) electricity generator technology option available now to replace Liddell, and potentially Yallourn W. New gas, HELE coal, and nuclear cannot now compete.

    So, why dither any longer? The responsible choice for Australia’s future electricity supply to sustain and maintain economic stability into the 2020s and beyond is clear.

  6. The private sector is getting it done.
    Brian’s right, Government should just get out of the way.
    Demanding government “ Do Something!! “ is not the answer to more ‘ renewable energy ‘, obviously.

  7. How Elon Musk’s big Tesla battery is changing Australia’s power landscape.

    The world’s biggest lithium-ion battery — built by tech billionaire Elon Musk’s company Tesla last year — has survived its first summer in South Australia’s mid-north.

    Key points
    AEMO says the Hornsdale Power Reserve is capable of charging at a rate of 80 megawatts and discharging at 100 megawatts
    It has a storage capacity of 129 megawatt hours
    That means it could operate for about 75 minutes at full capacity
    And according to a new report by the Australian Energy Market Operator (AEMO), it’s outperforming coal and gas generators on some key measures.
    Here’s a look at how it’s performed and its potential impact on the future of power in Australia.

    Key benefit is the speed with which it can ramp up and down power output. But keep in mind that that it is about short changes in demand and won’t have much benefit if used for hours

  8. Jumpy: Our power system is in a mess because some dingaling who agrees with you privatized most of the system and assumed all would be well because of the magic of the highly inappropriate market systems that were set up. I have to admit though that it has created a nice little earner for retailers and the new network monopoly owners.

  9. Jump(y) (Re: APRIL 6, 2018 AT 4:06 PM):

    The private sector is getting it done.

    Are you sure of that? So, who do you think will be filling the ‘dispatchable’ electricity supply gap when Liddell stops generating (probably around the end of March 2022 – less than 4 years from now)? The AEMO suggests, as reported in the AFR, that there could be an 850 MW shortfall.

    And it doesn’t stop there. Per EnergyAustralia’s public hearing testimony in Melbourne on 17 Nov 2016, at the Australian Senate inquiry into the retirement of coal fired power stations, Yallourn’s coal license expires in 2026, meaning an extension would need to be granted to enable further brown coal to be extracted out to 2032 (when the mine would become fully exhausted). Would you care to take a bet that the owner of Yallourn would gain an extension for the coal mine beyond 2026? I think by then it would become much tougher to get an approval beyond 2026.

    Then work down the list shown in my comment (at APRIL 6, 2018 AT 3:38 PM).

    Wind and solar-PV is not ‘dispatchable’ without some form of energy storage (eg. pumped-hydro, batteries, etc.). Residential roof-top solar-PV feed-in is currently uncontrolled by the grid operator and could destabilize the grid within 5 years – that’s another problem that needs urgent fixing.

    Batteries have a role to play, as is being shown at the Hornsdale Power Reserve, but they are limited to a few hours of output, and have a limited operational life of about a decade that then requires replacement/recycling.

    I see the need for more ‘dispatchable’ renewable primary energy. Solar thermal with sufficient energy storage appears to fill that gap, but do you think the private sector will invest in this technology without government backing/support/encouragement?

    And the clock is ticking, with the windows of opportunity for the remaining available options closing one by one. Then the lights go out for the people who don’t have the resources for their own back-up electricity supply.

  10. John
    If renewables energy is cheaper, more easily built where it’s needed, what most people would rather and reliable then the market will accelerate its availability.

    All government has done is implemented a crap system in the first place and flogged it off in the most shitty way only governments can.

    This government worship has got to stop.

    One day scientists and economists will be amazed how Marxism held back renewable energy. There’ll be a chapter in that book on how much Marxists promoted coal as a “ common good “ from the start.

  11. Jump

    At 4.46pm you wrote that Government should just get out of the way.

    Will they?
    Can they?
    If it happened, what would the near future look like in Australia?

  12. One day scientists and economists will be amazed how Marxism held back renewable energy.

    I’m sure your efforts will be suitably rewarded as well.

  13. Very good article with many useful comments.

    All sorts of coal are good feedstocks and good raw materials; it is indeed a stupid waste to just burn them.

  14. Jump, I said the Commonwealth Government should get out of the way, not all governments. Electricity prices fell from the early 1980s then stabilised until about 2005. The raw evidence is that the system performed best when run as state monopolies by the old state electricity commissions. See Cherry picking electricity prices in Qld election.

    Geoff M, in the AFR article you linked to – Closing Liddell could cause blackouts for 200,000 homes: AEMO – my understanding is that the headline warning is what will happen if Liddell goes down and nothing replaces it. AEMO’s role is to identify need for capitalists to fill.

    But AEMO is perfectly aware that there are developments in the pipeline. The last three paras are critical:

    AEMO acknowledged that all three phases of AGL’s plan would eliminate the identified shortfall, and noted the proposed addition of 3700 MW of new committed capacity in the NEM since 2017, including 2600 MW of renewables generation.

    But it said there was insufficient interconnector capability to bring the additional new supply from other regions into NSW during peak periods. NSW’s committed new generation of 910 megawatts was not enough, under the AEMO modelling.

    Dr Zibelman advised that even with the extra capacity, there would still be a risk of blackouts, but reduced to once in 10 years.

    Blackouts once in 10 years isn’t so bad. However, if the Commonwealth wants to make a contribution, they could fund a bigger or second interconnector with Queensland. The NSW-Qld interconnector has limited capacity and is stuck out at Dumaresq to Bulli Creek, which means north of Armidale to west of Millmerran.

    AEMO has a paper on interconnectors.

    Finally, I understand that AEMO will not let new capacity onto the NEM unless it is firmed. Not sure what happens to rooftop solar, but I understand you can’t assume that if you put it up there that the grid will accept it.

  15. Brian: Most australians haven’t a clue what $ per MWh means in terms of their power bills. What they do understand is cents per kWh.

    John D, you are right. Also I should have noted in the post that there is a difference between electricity prices and the size of consumers’ bills. This is the breakdown of electricity bills from the ACCC from my post Electricity bills – Queensland acts because it can:

    As I’ve said in that post, I don’t trust the ACCC numbers, but the proportion is probably ball-park. The cost of the actual electricity contributes about 25% to the bill. I’m informed that what is termed ‘usage’ on your bill also contains network costs, plus of course the retail markup.

  16. That is a great graph, Brian. I’ll print that out to have for a Liberal party (state) function I am going to this week. It clearly demonstrates the lie that TurnBull is propagating with his claim that it is electricity production that has driven costs up, when it was in fact the cash grab by the networks who built into future contracts an extra 15% for themselves. They are the big winners from grid connected rooftop solar. It is this greedy grab that provides the budget for establishing local microgrids once storage is well established.

  17. Brian at almost midnight,

    Ah the old chestnut wholesale versus retail, eh?

    Quite a large mark up.
    (Reminiscent of areas where some folk scream about wage rises being unaffordable, while figures show wage costs are only 15% of operating expenses.)

    Anyway, IMO the connection fee, which of course was once a fixed supply fee, can in future be regarded as an interconnection fee allowing the retailer to supply, and the retailer to accept small scale power from household rooftops, when excess abounds; and that at a very low price.

    When we recently increased our rooftop capacity, we learnt that the distribution company had a max household capacity they would accept feeding in from, about 4.5 kW. We had to get their approval. Checking capacity blah blah….

    I see that Qld still has the highest rate of domestic solar rooftop installation, at about 30%. A good start.

  18. Ambigulous, that is an extremely expensive interconnection fee, especially when you realise that the energy that leaves your house is unlikely to leave your suburb, ie does not involve use of the broad grid and high tension cable system. When electricity was 13 cents per unit the carve up of the revenue was roughly thirds between generation transmission and retail distribution. So in 2007 when Australia’s total consumption was 247 billion kWhrs (get your calculator out, these are not hard numbers to crunch) the transmission business was a 10.7 billion a year business. Now with less power consumed say around (210 billion kWhrs) the transmission cost is 50% up from a third and on and electricity price double the 2007 figure giving the transmission industry a $27.3 billion annual turnover. Aw! those poor, suffering at the hands of mean rooftop solar owners, business men.

  19. More on the what we should be doing with our coal front…..

    Check ou the image of Prof Eric Eddings holding a lump of coal. Look familiar? We’ve seen this very posture in out parliament from the likes of Scot Morrison and Barnaby Joyce both of whom valued that kilogram of coal at 10 cents to make CO2, whereas Eric Edding wants to, and can, turn that one kilogram of coal into $70 worth of Carbon Fibre (the price I pay for the fibre I buy).

    Do you see the difference between the grasp on reality between our politicians and science based engineers?

    It is sad to have to say this, but our Prime Minister has a head full of Trump.

  20. Crikey BilB at 9.29am

    You’ve woried the living daylights out of me. Thanks for your cogent and fact-based analysis.

    Confirms that grand totals can be useful in examining some topics.

    I should ask our retailer to lower it.

    Good luck at the Liberal function. That’s “Large L Liberals”, is it?

  21. Bilb: Found out when I did a study on the effect of rooftop solar on household power prices that the networks were changing the same amount to move a kWh from our house to a neighbor as they were charging to move a kWh from Central Qld to the neighbor.

  22. Thanks for the verification, JohnD. This needs to be made a much larger issue. Homes should be getting their generation sum (for me that is 6 cents per unit) plus at least half of the wheeling charge, wheeling (transmission) that the power distributor does not have to do. So I should get 6 cents plus another 5.5 cents in my area. And that should be back calculated as well.

  23. BilB, there is another graph you might use. It’s from my post Cherry picking electricity prices in Qld election:

    That graph shows that wholesale prices fell after 2005, and have been flat from 2010, network costs have risen moderately, but retail prices have rocketed. I say in the post that the graph is from the Grattan Institute, but I don’t have a link. If memory serves they did an investigation into the retail component of electricity bills around the middle of last year.

    They also have this graph, which has to be Victorian because of the inclusion of ‘smart meters’.

    The wholesale electricity is minuscule in the context of the whole bill.

    Both graphs end in 2014, but they are hard to reconcile with that other the narrative about network gold-plating, which may have applied more to NSW and Qld.

  24. Brian: An important thing from your Vic bar chart is just what an expensive dud the smart meters turned out to be. Hardly surprising given how little we spend on power a day and the effort required to monitor power costs during the day.
    Smart power monitoring only makes sense for large power consumers.

  25. As I’ve always maintained, electricity is in the “do you want fries with that” part of the household, and business, budget. Abbott’s and now TurnBull’s hyperventilating over electricity prices was and is disingenuous and hiding another agenda from public awareness, which I think is to cripple Climate Action decarbonising of the economy.

  26. Grattan Institute is based in Melbourne. Quite possibly near Grattan Street, part of which borders part of the University of Melbourne.

  27. Grattan Institute have decided to be exclusive and not want to talk to the public, so their evaluations cannot be assumed to be universal or complete as they have consciously restricted their knowledge base.

  28. GM: Thanks for the Ben Oquist article. Having a power source where unreliable 500 MW sets can drop out with no notice. Gets even worse when talking about a power station like Kogan Creek that consists of a single 700 MW set
    BTW my recollection was that Port Augusta shut down because it could only sell power during summer and its coal source (Leigh Creek) only sold to Altina. Keeping an isolated coal mine on standby 6 months per yr would have all sorts of practical problems.

  29. Brian (Re: APRIL 6, 2018 AT 11:46 PM):

    AEMO’s role is to identify need for capitalists to fill.

    But AEMO is perfectly aware that there are developments in the pipeline. The last three paras are critical:

    There’s now less than a four-year time deadline for the developments in the pipeline. Can we afford the luxury to wait for the capitalists to fill the gap?

    AEMO acknowledged that all three phases of AGL’s plan would eliminate the identified shortfall, and noted the proposed addition of 3700 MW of new committed capacity in the NEM since 2017, including 2600 MW of renewables generation.

    I was reading somewhere (sorry I don’t remember where or when, so it’s a bit difficult to supply a reference) that AGL only has funding committed for the first phase of its plan. I may be wrong or the information is now out of date.

    3700 MW of new committed capacity in the NEM since 2017, including 2600 MW of renewables, aren’t the only figures that need to be considered. Capacity factors are also critical. Average capacity factors for wind are usually around 30%, some specific farms are lower, although I read recently a new wind farm (which means it’s site specific) is achieving a capacity factor up to 50%. Solar-PV also has low capacity factors – e.g. my roof-top 3.2 kW solar-PV system may not even reach rated peak output during the day for a range of reasons, and if it does, it’s usually for only a very brief period of the 24-hour cycle. My point is that the nameplate generating capacity may only be achieved for a relatively small proportion of the time. That means much more generating capacity is required to compensate for relatively low capacity factors for technologies like solar-PV and wind. Energy storage is useful to smooth out the troughs and peaks.

    Solar-PV is less efficient at ambient operating temperatures above about 25degC, as I have experienced with my roof-top system. Higher temperatures produce higher electrical resistance within the panels, lowering power output to the inverter.

    You state:

    Finally, I understand that AEMO will not let new capacity onto the NEM unless it is firmed. Not sure what happens to rooftop solar, but I understand you can’t assume that if you put it up there that the grid will accept it.

    That’s because the AEMO is concerned about the intermittent nature of renewables, unless it has energy storage associated with it to provide ‘dispatchability’.

    The AEMO is also concerned about the growing problem with roof-top solar-PV, as highlighted in this RenewEconomy article, headlined Rooftop solar: Australia’s greatest opportunity – and its greatest risk, including this:

    The rooftop solar PV systems being installed by Australian homes and businesses could become one of the grid’s greatest assets, making it greener, smarter, cheaper and engaging prosumers in the process.

    But as the distributed solar market grows – currently at a record-breaking rate – the reality is dawning on the powers that be that tens of gigawatts of rooftop PV could also represent one of the biggest risks to the grid, if it is not properly integrated and managed.

    There’s currently no co-ordinated means by the grid operator to control energy being fed into the NEM by roof-top solar-PV, otherwise known as a distributed energy resource (DER). A failure of the AMEO to address this risk now could lead to a loss of grid control (and therefore grid instability) within five years. Dr Jenny Riesz – a principal at the Australian Energy Market Operator says:

    “At the moment there is no framework for moderating the feed into the grid from rooftop PV systems,” she said. “We can turn down the large-scale wind and PV if we have to, but there is no way at the moment to control rooftop PV systems.”

    The last sentence of your post says:

    You are in the way, Malcolm and Josh. If you stay there you will probably be run over.

    That needs to happen very soon, and governments need to remove the roadblocks, else this whole country is at serious risk of becoming a third world country in the early 2020s.

  30. BilB (Re: APRIL 7, 2018 AT 6:10 AM):

    That is a great graph, Brian. I’ll print that out to have for a Liberal party (state) function I am going to this week.

    Perhaps if it’s not already too late, there’s also an article at RenewEconomy headlined Coalition still kidding itself about price of coal generation, dated April 5, link here, that you may like to also arm yourself with. It highlights some of the recent findings from the Australian Energy Regulator into wholesale prices, including this:

    It shows that two NSW black coal generators actually set the price in the Victoria wholesale market around 25 per cent of the time. In fact, they have have done so for years, particularly at times of low demand when gas is not needed.

    But over the last 18 months, that price charged by the NSW black coal generators when they set the price has more than doubled to more than $80/MWh.

    That’s NSW’s existing Eraring and Bayswater black coal-fired power dictating pricing in the market, not at times of peak demand, but in off-peak periods. Then there’s this comment:

    It should be noted that the cost of a new coal fired generator is likely to be at least double Morrisson’s estimates of $70-80/MWh. Bloomberg New Energy Finance puts it at $130/MW at the very least, and likely a long way north.

    It seems black coal ain’t cheap energy.

  31. Geoff M, I don’t think any of us have the information or the competence to add up the numbers about the power supply available in NSW if Liddell closes in 2002. I’m confident AGL are serious about their plans. EnergyAustralia are large players in the whole NEM and are talking about building more clean capacity in NSW.

    Queensland has more power than it needs, with plenty clean power in the pipeline but the interconnector acts as a choke. Victoria, SA and Tasmania are not standing still.

    From my comment here, AEMO advised that with the extra capacity currently in the pipeline, there would be a risk of blackouts once in 10 years.

    There is no crisis.

  32. Guardian Australia has an article “Why Liddell is Likely to Close in 2022 and Why You Shouldn’t Care”, by Simon Holmes a Court.

    Mainly financial analysis, but it includes useful mentions of two “new coal-fired power station” proposals in recent years that didn’t proceed. One of them HRL Dual Gas would have used Latrobe Valley brown coal.

    It is to be hoped that prominent cyclist Mr Abbott stopped at the HRL site, to pay his respects. A minute’s silence would have been gratefully received by the public.

  33. Brian (Re: APRIL 9, 2018 AT 11:41 PM):

    There is no crisis.

    Here’s a letter to the Australian Financial Review from Audrey Zibelman – Managing director and chief executive officer, AEMO, top-billed under headline AEMO misrepresented, link here. She states in her letter (bold text my emphasis):

    AEMO was not requested to, nor would it be appropriate for AEMO to advise on the potential sale of Liddell. AEMO responded to a request from the Commonwealth government to assess the adequacy of AGL’s plan to replace the energy and capacity with new resources against the reliability needs of NSW following Liddell’s retirement in 2022.

    AEMO’s analysis and recommendations were clear. We found that if Liddell retired as announced, an additional 850 megawatts of resource capability, beyond which is already planned to be constructed by AGL and other parties, will be required to ensure reliability in NSW following the closure of Liddell. We noted that using a competitive market to meet defined reliability needs is preferable to designating a single participant from the perspective of gaining the best outcomes for consumers.

    I interpret that to mean there is currently an 850 MW shortfall if Liddell closes in 2022. I’m puzzled how you can interpret that in any other way – perhaps you could enlighten me? (I’m not trying to be rude – I’m trying to gain an understanding of your reasoning and the evidence/data you are relying upon) There may be other generation being planned but not yet firmed up or committed (that we don’t know about), and as you say, inter-connectors are another choke point, but that’s what the AEMO says. Are you saying that the AEMO is wrong?

    Also directly below Audrey Zibelman’s letter is one from Ian Dunlop headlined MCA ignoring facts. He also has an op-ed published on a weblog on April 6, link here.

  34. Maybe they’re saying that in a free and dynamic market, you cannot expect one corporation to “replace like for like” in its plan to close one of its generation assets?

    BTW, AGL has given quite a long lead time, I reckon. Much longer, anyway, than Engie with their Hazelwood closure announcement.

  35. Ambigulous (Re: APRIL 10, 2018 AT 1:02 PM):

    Maybe they’re saying that in a free and dynamic market, you cannot expect one corporation to “replace like for like” in its plan to close one of its generation assets?

    The evidence indicated in my comments above suggest replacing “like” (i.e. a 2000 MW capacity coal-fired power station) with “like” (i.e. another 2000 MW capacity coal-fired power station, or multiple stations with same total capacity) is not cheap, can’t be built in less than 4 years time, and doesn’t comply with the Paris Climate Agreement.

    BTW, AGL has given quite a long lead time, I reckon.

    I agree. The announcement for Liddell closing in 2022 was in 2015, and there seemed to be no uproar. Then Engie announced the early retirement in November 2016 for the shutdown of Hazelwood at the end of March 2017, and it was a different story. Three years notice have been squandered, and there is apparently no full generation replacement solution yet “to ensure reliability in NSW following the closure of Liddell“, per AEMO’s recent assessment.

  36. Ian Dunlop’s letter headlined MCA ignoring facts includes:

    It is impossible to stay below 1.5 degrees, which we will reach shortly; it may well be impossible to stay below 2 degrees. Dangerous impacts are occurring now at 1.2 degrees. We are on track toward 4 degrees, which would result in a completely disorganised world. Even 3 degrees would result in widespread social chaos.

    A RenewEconomy article headlined Climate change: 1.5°C is closer than we imagine, by David Spratt, dated April 5, link here, opens with:

    Global warming of 1.5°C is imminent, likely in just a decade from now. That’s the stunning conclusion to be drawn from a number of recent studies.

    And concludes with:

    And in all this evidence, what worries me most?

    It is my experience that with few exceptions neither climate policy-makers nor climate action advocates have a reasonable understanding of the imminence of 1.5°C and its consequences.

    Worsening energy security and worsening climate consequences. And those in governments continue to fiddle.

  37. Sorry

    I should have written more clearly. By “like with like” I meant replacement with the same generating capacity, not the same fuel or energy source.

  38. ABC-TV1 program “The Checkout” tonight gave a pretty good rundown (IMHO) on household solar power.

  39. Geoff M, I don’t have a view, was merely reporting on what Ben Potter wrote, and I’m not sure anything he wrote is wrong except the headline, which authors don’t usually write.

    However, I don’t think we have a crisis. Catherine Tanna at EnergyAustralia is planning:

    Final investment decisions could come as early as late 2018 on more than 1000 megawatts of new gas-fired plants at Tallawarra and Marulan in NSW, while a new gas generator is possible at the Yallourn coal generation site in Victoria. A $480 million pumped hydro plant is on the cards in South Australia, while EA is also investing in waste-to-energy at a NSW coal plant and in smart energy management systems.

    I don’t like new gas, but she’s certainly planning new energy.

    There is also potential demand response, where Queensland is saving half a Liddell.

  40. Geoff M, the problem with adding up the MW as you seem to want to do is that we don’t know how AEMO is counting the MW. Their advice to the Commonwealth may be available on their site, but I haven’t had time to look.

    In the post AGL struggles daily to keep Liddell going, and looks to ‘flexible’ power Liddell was only producing 850MW, not 2000MW as it is old and unreliable, and often partly offline.

    In the post AGL’s $1.36 billion plan to replace Liddell AGL has laid out three phases to create a possible 2903MW of reliable, flexible energy at a price significantly cheaper than refurbishing the old clunker. They are doing far more than replacing like with like, and should be praised for the exciting direction they are taking electricity supply.

    Stage 3 of the plan takes into account what other parties may or may not be doing, which is the commercially responsible thing to do.

    If there is a crisis in electricity generation, supply and security it’s within the LNP government, and what looks like an attempt to take of the running of the show from the states. Yes, there is also a crisis in how we are meeting climate mitigation; I pointed out in the post that the NEG was looking worse than useless.

  41. Ambigulous (Re: APRIL 10, 2018 AT 8:44 PM):

    By “like with like” I meant replacement with the same generating capacity, not the same fuel or energy source.

    You can’t compare different generator technologies for “MW capacity with MW capacity” without also considering capacity factor, which the Wikipedia reference includes (bold text my emphasis):

    The maximum possible energy output of a given installation assumes its continuous operation at full nameplate capacity over the relevant period. The actual energy output during that period and the capacity factor vary greatly depending on a range of factors. The capacity factor can never exceed the availability factor, or uptime during the period. Uptime can be reduced due to, for example, reliability issues and maintenance, scheduled or unscheduled. Other factors include the design of the installation, its location, the type of electricity production and with it either the fuel being used or, for renewable energy, the local weather conditions. Additionally, the capacity factor can be subject to regulatory constraints and market forces, potentially affecting both its fuel purchase and its electricity sale.

    The capacity factor is often computed over a timescale of a year, averaging out most temporal fluctuations. However, it can be also computed for a month to gain insight into seasonal fluctuations. Alternatively, it be computed over the lifetime of the power source, both while operational and after decommissioning.

    If the wind stops blowing (or is blowing too much), or the sun is behind clouds or below the horizon, then you may not have sufficient energy being produced, unless you have stored some beforehand when there was suitable wind or sun energy. ‘Dispatchability’ is the critical issue.

  42. Brian (Re: APRIL 11, 2018 AT 12:11 AM):

    Catherine Tanna at EnergyAustralia is planning:

    Final investment decisions could come as early as late 2018 on more than 1000 megawatts of new gas-fired plants at Tallawarra and Marulan in NSW, while a new gas generator is possible at the Yallourn coal generation site in Victoria.

    I’ve said before:
    We must leave fossil natural gas, before gas leaves us.
    We must leave oil, gas & coal, before 2050, to mitigate dangerous climate change.

    I don’t like new gas, but she’s certainly planning new energy.

    Building new gas generation will become “stranded assets”. Why waste limited financial & material resources on “stranded assets” when Australia needs to be rapidly transitioning to long-term sustainable, reliable, affordable renewable energy?

  43. Brian (Re: APRIL 11, 2018 AT 10:00 AM):

    Geoff M, the problem with adding up the MW as you seem to want to do is that we don’t know how AEMO is counting the MW.

    Not at all. See my comment to Ambigulous (at APRIL 11, 2018 AT 11:18 AM).

    Remember that in 2022, when Liddell is likely to close, Yallourn W, Gladstone, and Vales Point B will also be older and less reliable.

    Also, Australia’s population will be larger, due to high population growth, meaning there will be more energy demand.

  44. perhaps I too have just “added up the MW” as Brian referred to, above….
    mea culpa

  45. Look, reliability is always in question.

    Years ago, we had a close view of Hazelwood from nearby hills.
    It was common to see several of the 8 smokestacks emitting nothing, at any given time. No coal being burnt under those stacks.

    Furnace etc under maintenance? Couldn’t say.

    At other times, brown smoke pouring out: electrostatic precipitators (meant to remove most of the fly ash) not working??

    Boilers developed cracks, occasionally. A metallurgist friend has made a career of advising on high temperature metal failures (cracks, faults, diagnosing faults, repair, etc.)

    Yep, reliability is always a problem. John D can advise.

  46. Ambi: Yep reliability can be a problem for large coal fired power stations because a trip of one module has a significant effect if there is no rapid response standby available.
    Even if the problem can be quickly fixed it takes time to fully shut down and get back on line.

  47. Thanks John.

    There are all sorts of matters lurking in energy supply.
    For example, several years ago a spokesman for nuclear energy said it was unfair to highlight

    the accident rate, death and injury rate for nuclear power stations

    without also, as a comparison, estimating how many plumbers might be injured (or die) in accidents on home and business rooftops, when installing or maintaining solar hot water; or electrician injuries for rooftop solar pv.*

    Coal-fired power, as we’ve discussed before, takes hours to start up and shut down. Does anyone count those hours as an “off line” segment of cumulative unavailability? Say, over a month or year?

    * at a rough guess, I think safety in both nuclear power, and plumbing work practices, and electricians’ safety, have all most likely improved in the last couple of decades.

  48. So far everything is concentrated on how best to produce more energy, preferably cheaper for the consumer and more profitable for the owners and suppliers.

    What about reducing demand? So long as dwellings and workspaces remain thermally inefficient and need more artificial light, the demand for electricity must keep going up and up. All of us have seen devices and features that are cheap to build or install and to maintain, yet reduce or abolish the demand for electricity. Temperature control through wide eaves or window hoods, through louvre windows, through the alternate use of sheer or heavy curtains, through climbing plants on trellises near but not on walls, for example. Sky-lights for ambient light by day and low-consumption compact fluoros or l.e.d. lamps by night. Do you really need to have a Liddell-consuming, wall-to-wall TV on just so as to catch up on the latest advertorials or can you get by with a pocket radio that consumes mere milliwatts, or even a Bayliss (bless his soul) wind-up radio? Fridges and freezers are very handy but do you need ones so big as to take a whole bullock (butchered out or unbutchered, depending on the model); survivalists may need huge ones for the End Days but do you? Do your socks actually need ironing – or not? A bulky jumper and a knee rug are great substitutes for household furnaces and spinning electricity meters on cool evenings.

    Think. Is all of your consumption of electricity really all that necessary?

  49. Ambigulous (Re: APRIL 11, 2018 AT 5:09 PM):

    Coal-fired power, as we’ve discussed before, takes hours to start up and shut down. Does anyone count those hours as an “off line” segment of cumulative unavailability? Say, over a month or year?

    That’s all taken care of in the capacity factor calculations. Per Wikipedia:

    The net capacity factor is the unitless ratio of an actual electrical energy output over a given period of time to the maximum possible electrical energy output over that period.

    Actual electrical energy output is expressed as MWh.
    The maximum possible electrical energy output over a given period is also expressed as MWh.
    Scroll down the Wikipedia reference to see some of the sample calculations given for nuclear, wind farm, etc.

    So, if a coal-fired (or gas-fired) power station is not producing electrical energy, then it’s not counted as “online”, but it may still be consuming energy to ramp-up the temperature/pressure in the boilers prior to being available for ” hot standby”.

    The other aspects glossed over for coal-fired power is the issue of “black lung” for coal miners (see article headlined Black lung detection in Queensland ‘deliberately underfunded, under-resourced’), and the particulates emitted in the handling and combustion of coal. See this SMH article headlined ‘Total failure’: Calls for tougher controls as coal-related pollutants jump.

  50. Graham Bell (Re: APRIL 11, 2018 AT 8:36 PM):

    What about reducing demand?

    Excellent question. And you’ve provided some good examples of improving energy efficiency. I add (if you aren’t already aware) that BZE’s Buildings Plan (2013) provides a comprehensive ‘roadmap’ to:

    * energy efficiency retrofits of existing buildings,
    * renewable energy generation in many buildings, and
    * replacing gas appliances with electric appliances to end the use of gas.

    In the Alternative Technology Association’s publication ReNew Issue 143 (Apr-Jun 2018) there are a few interesting articles headlined:

    * Gas versus electricity: Your hip pocket guide;
    * Off-grid on the edge: Not quite off-grid, but reliable;
    * Windows that perform: A window and film buyers guide;
    * Glazed and enthused: Window replacement case studies.

  51. Thanks Geoff M.
    Reassuring to know it’s taken into account.

    Interesting point about the energy required to bring the plant up to operating conditions.

    Latrobe Valley brown coal has a high water content. Hence much of the coal combustion energy must be used to dry out the fuel before it becomes combustible!!

    Quite energy inefficient.

    But relatively cheap to mine. Close to the surface, can use open cut mines (not tunnelling, with safety problems and higher costs, let alone ‘black lung’).

  52. Graham Bell, yesterday evening.

    That’s a very good list.
    I think more people are working out ways to reduce energy use.

    Malcolm’s light bulbs: a good reform.
    House design and use of windows, curtains, blinds, shutters are important.

    Now here’s an anecdote. Circa 1981 I was on the parents committee helping plan a new kindergarten building in a Gippsland town. The Shire hired a good local architect. He knew about latitude, seasonal variation in the Sun’s elevation, etc.

    So he included large north facing windows for passive solar heating, and eaves to block out summer noon day sun. Good work. Lower running costs for the kinder, a lesson for those parents who noticed.

    Down the road were dozens of ‘Housing Commission’ houses built cheaply for families on welfare. Cheapest electric heaters installed. Therefore the single Mums had the highest heating bills in town, every winter. Local newspaper got onto the issue.

    In the early 2000s a young person, very energy aware, pointed out how most of the “project homes” in Victoria had no eaves or minimal eaves. Lower cost for the roof construction for the builder; therefore higher heating and cooling costs for the resident.

    In more recent years in Victoria, houses have an energy “star rating” and must meet a minimum standard.

    Household appliances (fridge, clothes washer) have energy “star ratings”. New vehicles have published fuel consumption claims.

    Slow progress indeed.

    (You might call it “lethargy“, Geoff Miell.)

  53. Further to 5.39pm

    What was the point of designing one kindergarten cleverly, if later on thousands of houses were built with scant regard for simple energy saving practices?


  54. Geoff M it is not just coal miners, anyone who lives near an open cut coal mine or power station is at risk. We owe much to Dick van Steenis, an Australian-born GP who looked into the issue of microparticles in Britain from about 1994. What he found horrified him. Now sadly departed, I heard him on a panel in Brisbane about 10 years ago.

    At that point he said that no-one should live within 7 km of an opencut coal mine. The Wandoan mine is planned to come within 2km of the centre of town. Acland near Oakey is also a problem.

    At that time we were not measuring particles less than 10 micrometres, whereas the smaller particles were actually more dangerous. From the article you linked to it seems the game has changed, but it is not clear what the standards now are across the country.

  55. Graham, I think I mentioned some time ago that a new house built down the street, actually two the same on a block where the old house was simply demolished, included around 350 sq m under roof on about 400 sq m of land. The aircon was an 18 KW industrial system, covered the whole house with separate controls in each room. That’s what’s happening hereabouts.

    The house sold for $1.5 m.

  56. Brian (Re: APRIL 12, 2018 AT 11:01 PM):

    Geoff M it is not just coal miners, anyone who lives near an open cut coal mine or power station is at risk.

    Or nearby transport routes where coal is transported, both rail and trucks where the load (and empty vehicles returning to be refilled) are uncovered.

    At that time we were not measuring particles less than 10 micrometres, whereas the smaller particles were actually more dangerous. From the article you linked to it seems the game has changed, but it is not clear what the standards now are across the country.

    It seems to me the readings are being done by the polluters – what’s the likelihood of the readings being suspect? Here’s a more recent (April 4) article headlined Environmental expert raises concerns over reporting of Mt Piper pollution data, that includes this:

    Figures for the fine particle pollution at Mt Piper have changed dramatically in the last four years, dropping from a high of 210,000 kilograms in 2013-14, to just 10,000kg in 2015-16, before rising to 59,000 in 2016-17.

    The figures come from the National Pollutant Inventory, published by federal government from figures provided by the industry.

    Unless the monitoring is being done by independent means, consistently and frequently then it’s probably unlikely we are getting an accurate picture of what is really happening. The Lithgow Mercury article concludes with:

    The NSW EPA launched an investigation in 2017 after the fine particle figures were revealed but its report “found no evidence of deliberate misreporting of emission data”.

    How would they know for sure without other independent data to corroborate?

  57. Here’s an Al Jezeera report on YouTube, published March 30, segment headlined Australia: Concerns of coal mine expansion polluting rivers, link here. The message there seems to be: If environmental laws become too inconvenient, then retrospectively legislate them away.

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