Prime Minister Malcolm Turnbull may be about to “drive a stake through the heart of the fossil fuel generation industry in Australia” with a decision to fund a two-gigawatt, A$2-billion pumped storage scheme in the Snowy Mountains in New South Wales.
“By promoting pumped hydro, Turnbull is effectively [sounding] the death knell for any new coal- or gas-fired generation built by the private sector, and is paving the way for a 100% renewable energy grid, driven mostly by wind and solar,” RenewEconomy reports. The move “also makes a reported and belated push for nuclear energy from members of his Coalition entirely redundant, because it would remove the need to rely on baseload generation over the medium to long term.”
A final decision on the scheme will hinge on a feasibility study by the Australian Renewable Energy Agency and funding from the federal, New South Wales, and Victoria governments.
“Assuming this does go ahead at the scale advertised, the conversation around energy delivery will now shift from ‘baseload’ to flexibility, and gas and coal will no longer be able to compete, on either cost or utility, over the medium to long term,” notes RenewEconomy’s Giles Parkinson. “The biggest beneficiary of this push into pumped hydro could well be solar PV and wind energy, which are now the clear leaders in energy costs, with further sharp falls ahead.”
Last month, Prof. Andrew Blakers, foundation director at Australian National University’s Centre for Sustainable Energy Systems, calculated that a mix of solar, wind, and pumped hydro could bring the country to 100% renewable energy at a cost of $75 per megawatt-hour, less than the current wholesale price for power. He told Parkinson the latest project in the Snowy Mountains—where Australia already has 2 GW of pumped storage in operation—would get the country more than half-way to a grid run entirely on solar and wind.
“A 100% renewable energy grid will require around 450 gigawatt-hours of storage,” he said. “Pumped hydro is by far the cheapest in the wholesale market,” although about half of the total would have to come from behind-the-meter batteries and demand management.
With Turnbull’s announcement this week, however, “it’s game over for gas, it’s game over for nuclear. Solar PV and wind have won the race,” Blakers said. The project could also be a challenge for solar thermal and storage technologies, except in locations that are unsuitable for pumped storage.
South Australia will have its 100 MW of grid backup battery storage, but it may not come from Tesla, whose flamboyant CEO Elon Musk dramatically promised last week that his company could deliver the capacity within 100 days—or it would be free.
In the event, Musk may not have to put his boast to the test. On Monday, the state government called tenders for “a new battery storage installation of at least 100MW, and a new ‘energy security’ scheme that could encourage solar thermal and other storage technologies,” RenewEconomy reports.
Competing with Tesla for the estimated A$20 million order, which the state wants to have operational before the next antipodian summer, or late 2017, will be several other companies, including Zen Energy, Lyon Solar with AES, and Perth-based Carnegie Clean Energy, among others.
“South Australia will also spend A$360 million building a new, 250-MW gas-fired generator, which it also hopes to have in place by next summer,” the industry news outlet notes. The plant will act as emergency back-up to ensure that power disruptions which have plagued the state since September do not recur.
But even if Musk’s audacious 100-days-or-it’s-free offer doesn’t win the state’s storage contract, it did appear to shake up the country’s energy debate.
Australia’s pro-coal Prime Minister Malcolm Turnbull—who has blamed the blackouts in South Australia on the state’s rapid adoption of renewable power. despite evidence that they were actually caused by storms—spent an hour on the phone with Musk after the American entrepreneur issued his proposal, according to Renewable Energy World. Later, Turnbull tweeted that energy storage will “be a priority this year” for his government.
Tesla CEO Elon Musk is offering to deliver 100 to 300 megawatt-hours of grid-connected battery storage in South Australia in less than 100 days—and if the system fails to avert grid brownouts brought on by tightening domestic gas supplies, he says he won’t charge for the installation.
“Tesla will get the system installed and working 100 days from contract signature or it is free,” Musk tweeted, in a March 10 conversation with Australian tech billionaire Mike Cannon-Brookes. “That serious enough for you?”
“You’re on, mate,” Cannon-Brookes replied. “Give me 7 days to try sort out politics & funding. DM me a quote for approx 100MW cost—mates rates!”
Musk later said Tesla could supply the badly-needed capacity at a cost of $250 per kilowatt-hour, or just $25 million to stabilize an entire state power system. “He said in a separate comment that he spoke with Jay Weatherill, premier of South Australia, and was ‘very impressed’ that the government was committed to a ‘smart, quick solution,’” Bloomberg notes.
After severe storms caused a widespread blackout in South Australia last September, Prime Minister Malcolm Turnbull blamed the incident on the state’s rapid adoption of solar and wind generation (wrongly so, according to consistent analysis and reporting by New South Wales-based RenewEconomy). Since 2013, Turnbull and his predecessor, Tony Abbott, have dismantled Australia’s carbon levy and scaled back government targets for renewable energy adoption.
But now, “Musk and Tesla have called the political bluff in proposing one of the world’s largest battery storage projects while the Australian government is obsessing over a more expensive ‘clean coal’ solution or contentious natural gas reservation policy,” said Bloomberg New Energy Finance analyst Hugh Bromley.
Weatherill tweeted Friday that he was “looking forward” to discussing Musk’s proposal.
While utilities fret that the rise of rooftop solar and other distributed energy options will destabilize centralized grids, a new report is showing how “smart inverters” can actually give power companies more flexibility and improve power quality, by shifting the job of regulating voltage from substations to households.
“Electricity from our power points should be at roughly 230 volts, without deviating too far above or below. It fluctuates throughout the day, depending on how much power is being used,” The Conversation explains, in a post republished by RenewEconomy. Comparing the electrons flowing through wires to the water running through pipes, the publication explains voltage fluctuations with this analogy: “Using large amounts of power causes the voltage to drop, rather like when the washing machine comes on while you’re having a shower; all of a sudden the pressure drops because other appliances are using the water, too.” Distance from source also has an impact: the customers farthest away from a substation are most likely to lose voltage when the demand on the larger system is at its peak.
The rise of rooftop solar adds complexity to the job of managing an electric power grid: voltage rises when they produce power, and electrons now flow in both directions, rather than being produced by a single, centralized power source.
“Any customer-owned generator can affect the voltage—including solar, batteries, or diesel generators,” write Lawrence McIntosh and Dani Alexander of the Networks Renewed project in at University of Technology Sydney. “But we tend to hear about solar because it is by far the most popular means of local generation; Australia now has more than 1.5 million homes with rooftop solar, and that figure is rising rapidly.”
Traditional voltage regulation systems are “fairly blunt, affecting tens or even hundreds of properties at a time.” They consist of expensive equipment attached to substation transformers—an arrangement that makes grid electricity more expensive. “However, new solar and battery systems now have the intelligence to manage voltage in a cheaper and more targeted way through their ‘smart’ inverters,” McIntosh and Alexander explain. “These new technologies may provide the missing link to new renewable and reliable energy sources.”
The technology “can help to raise and lower the voltage on the network, improving the quality of our power including the voltage stability,” they note. But “this means a shift in thinking from the traditional, passive customer model—we deliver energy to you!—to a more dynamic and collaborative one, in which customers can actually help to manage the grid, as well as using and generating power.”
Australia is heavily promoting plans to burn domestically-mined coal in a new generation of “ultra-supercritical power stations” that its government describes as “clean.” But that choice could saddle consumers with “the most expensive form of new energy supply” possible, Bloomberg New Energy Finance warns.
“The research puts the Levelized Cost of Energy (LCOE) of a new ultra-supercritical coal-fired power station in Australia at $A134-203/MWh, significantly higher than wind at $A61-118/MWh, solar at $A78-140, or combined-cycle gas at $A74-90,” RenewEconomy reports. Adding carbon capture and storage technology to meet Australia’s international climate commitments could push the price to “the ballpark of $A352/MWh—or around three times the cost of wind or solar.” But without the expensive addition of CCS, the researchers added, “it is inaccurate and misleading to describe ultra-supercritical coal technology as ‘clean’”.
The price differential is even greater than one calculated recently by a University of Melbourne research team. That study concluded that Australia’s power sector could achieve the 27% reduction in emissions claimed for the proposed coal plants at half the cost by developing renewables instead.
“Even if the government were to completely de-risk coal by paying for the whole plant and guaranteeing an exemption from any future liabilities,” BNEF is now reporting, new coal generation would still result in “substantially higher” consumer prices for electricity, compared to a mix of wind, solar, and natural gas.
UPDATE: The immediate crisis in New South Wales was averted when the Australian Energy Market Operator directed the 250-MW Pelican Point gas plant to be switched on, RenewEconomy reported this morning.
Beginning around 4 PM local time today, an extraordinary summer heat wave was expected to bring rolling blackouts to the coal-dependent Australian state of New South Wales, with temperatures up to 45°C in the suburbs of Sydney producing more electricity demand than the system can supply.
An earlier round of blackouts last Sunday, affecting 40,000 people for up to 45 minutes, led to arguments back and forth about the factors behind the failure, RenewEconomy reports. Federal Energy Minister Josh Frydenberg attributed the blackouts to low wind output and a failed “gamble” on renewables, leading Treasurer Scott Morrison to brandish a lump of coal during legislative questioning. But South Australia Energy Minister Tom Koutsantonis blamed the Australian Energy Market Operator (AEMO) for failing to activate the 250-MW Pelican Point natural gas unit in time to meet the peak load, despite three days’ notice of the potential mismatch between demand and supply.
“The events—their impact on a high renewables state like South Australia and a coal-reliant state such as NSW—underline the shocking state of Australia’s energy policy,” write veteran energy reporters Giles Parkinson and Sophie Vorrath. “While Frydenberg jumped into the gutter, and refused to answer questions why the AEMO did not use its powers to ensure Pelican Point was operating, the more reasonable approach would have been to underline the need for a smarter grid rather than dumb politics.”