Australian news, and some related international items

Australia’s unstoppable transition to renewable energy

The question is whether the Coalition really is prepared to do something about bringing electricity prices down, or just wants to keep talking rubbish about how renewables will drive them up.

Swing to renewables will be unstoppable, THE AUSTRALIAN, ALAN KOHLER 18 Mar 17 Out of the thick haze of energy politics, something clearly significant emerged this week.

The expansion of Snowy Hydro is a very surprising, genuine game-changer: it shifts the power balance in Australian policy decisively towards renewables. If the project happens, a big if, the last fossil fuel electricity generator in this country has already been built.

It was possible because Snowy Hydro is the acceptable face of renewable energy, allowing, a heroic, soaring prime ministerial doorstop: “These are big dreams in these mountains, real courage, a belief in the future, a confidence in Australia.”

But the important point is that the Coalition’s electricity solution no longer seems to involve “clean coal” or gas.

There’s still a long way to go — after all, Malcolm Turnbull announced only a feasibility study, and then appeared to confirm that it was a stunt by using the press release to one-up South Australia’s battery plan: “My energy storage is bigger than yours.”

So the whole thing could turn into a pointless pissing contest between hydro and solar/wind/batteries. In fact, let’s face it — it probably will.

But even if that happens, and even if energy policy descends once more into political farce, at least the thermal power oligopoly would be out of the game, no longer exerting its hold over policy with the aim of maintaining margins.

And that is the significance of this Snowy Hydro expansion: it marks the end of thermal power. From here the swing to renewables will be fast, unstoppable and eventually complete…..

Solar is now, or soon will be, the cheapest way to produce power, and one of about a dozen ­competing storage solutions — mainly lithium-ion, zinc-bromide, hot silicon, pumped hydro — will remove the problem of intermittency.

In fact, instead of deciding to spend $360 million on a new gas power station for peak demand, the South Australian Premier Jay Weatherill should have gone all-out on solar and storage this week: the $20m he committed to a 100MW storage facility looks tentative and political, as if he was unwilling to get too far out of line.

Naturally, the federal Coalition got stuck into him anyway … wrong team, you see. The most important thing with energy policy in Australia is which team thought of it. But solar and batteries are taking off commercially, and to complete the shift at the grid level, there are two regulatory changes needed.

First, something like the US’s Federal Energy Regulatory Commission Rule 755 should be introduced. This rule was introduced in 2011 to pay large-scale battery ­operators a premium because they can respond more quickly than coal generators to spikes in ­demand.

Rule 755 involves the electricity market operator paying for grid stability…….

The second rule change that would make a big difference would be to get rid of the half-hour settlement period. Generators bid into the system every five minutes, but settlement is averaged over half-hour periods.

This favours the thermal generators over solar and batteries because they can’t respond quickly. If the price spikes to the maximum allowable ($14,000/MWh) and coal or gas generators fire up to take advantage of that, then they have to go for at least a couple of hours. But they still get paid the average over half an hour, which they know will be several thousand dollars, even if the price spike lasts only five minutes. Batteries, on the other hand, can shoot power into the system in a nanosecond for just five minutes and turn off again just as quickly.

So removing the half-hour ­average settlement rule and allowing payment in five-minute blocks would tilt the playing field towards solar and batteries, and save consumers and businesses a lot of money, especially with solar now cheaper than coal and gas.

The trouble is Australia’s thermal power generators are a powerful oligopoly and have been lobbying hard to keep storage out and to prevent these two rule changes.

The question is whether the Coalition really is prepared to do something about bringing electricity prices down, or just wants to keep talking rubbish about how renewables will drive them up.

Alan Kohler is publisher of The Constant Investor.


March 18, 2017 - Posted by | AUSTRALIA - NATIONAL, energy, politics

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: