Australian news, and some related international items

Dennis Mattews reviews Senate Committee report on Electricity Stability and Affordability

 Dennis Matthews April 2017 Comments on The Senate Select Committee into the Resilience of Electricity Infrastructure in a Warming World. Stability and Affordability: Forging a path to Australia’s renewable energy future.Senator Sarah Hanson-Young April 2017

The report by Sarah Hanson-Young is understandably critical of Liberal-National Coalition policy. It is no surprise that the committee’s Coalition Senators issued a dissenting report. It is also no surprise that the committee’s One Nation Senator, who has publically claimed that there is no evidence for global climate change, rejected the Hanson-Young report.

Both the Committee’s ALP Senators and Senator Xenophon issued dissenting reports, which however add very little to the Hanson-Young report.

The following comments will therefore concentrate on the Committee report by Senator Hanson-Young. Headings used are the same as those in the Committee report.

Executive summary   In the last two decades, natural gas was widely accepted as the obvious substitute for coal during the transition from fossil to renewable energy. In 2017 the validity of this assumption has been cast into doubt by the sudden increase in price of natural gas in Australia and “there are serious questions about whether gas can adequately fill this transitional role.”

In the sense that this problem has been induced by unregulated market forces dominated by the private, rather than the public, interest then the problem is in principle solvable. So far, however Federal Governments have shown very little appetite for regulating markets and it is therefore wise to assume that the gas shortage and resulting exorbitant prices will be a permanent fixture of energy supply and demand.

As with many energy issues, decades of inaction may well mean that we have missed the chance of a smooth transition from fossil to renewable energy and that a more abrupt transition is unavoidable.

The transition now involves “a combination of storage technologies and decentralised electricity generation.”

It is unfortunate that little attention is given to reducing the demand for electricity, either by improving energy efficiency, by conservation, or by displacing electricity with other forms of energy. The best example of the latter is using solar energy directly to produce hot water. The bulk of the report makes passing mention of the latter but almost no mention is made of reducing the demand for electricity through, for example, energy efficient buildings.

The report also takes the present system using alternating current (AC) for granted, despite frequent referrals to problems such as frequency control which are inherent in an AC system but not in a direct current (DC) system. The committee seemed to be oblivious to the fact that there is a DC interconnector between Victoria and SA (Murraylink) as well as an AC interconnector (Heywood) and that the DC interconnector has performed much better than the AC interconnector.

As with most aspects of renewable energy, the existing system discriminates against energy storage technologies. The report recommends changes to one aspect of the problem, namely the national electricity market (NEM) rules for buying and selling essential ancillary services “such as very fast primary frequency response, system inertia, spinning reserve and synchronous response capacity for frequency and voltage support , energy (electricity) balancing and black-start capability”.

The emphasis is on large-scale systems and largely ignores small scale battery storage such as those used for domestic roof top solar/battery systems. For small scale systems, the main problem to adoption has always been the “up-front” cost to householders. By contrast, the up-front costs for grid electricity and infrastructure are financed by the industry and recovered from the consumer through quarterly bills.

This “up-front cost” problem is largely responsible for the long delay in adopting rooftop solar electricity and hot water. It is encouraging to see that the “up-front cost” problem is now being addressed by energy service companies and by local Councils such as the Adelaide City Council.

Chapter 1     Introduction  The focus of the committee was on resilience of the electricity infrastructure. There are two ways of doing this, make the infrastructure stronger, and reduce the load on the infrastructure. Although the latter is addressed in the report, it does so in an electricity-centric fashion and fails to adequately acknowledge the role of electricity substitution. This is a common problem and arises from the failure to recognize that what the consumer wants is not electricity per se but the services delivered by using electricity. These energy services may be provided in ways other than by using electricity.  In doing so, the load on electricity infrastructure is reduced and make it more resilient without having to strengthen it.

Chapter 2     Background A property of wind farms is that, because they don’t consume expensive fuels, the marginal cost (cost of generating an extra unit of electricity) is close to zero. This means that wind farms can bid into the market at a very low price, much lower than fossil fuelled power stations especially those using gas.

Prior to privatisation in Victoria and then South Australia the Federal Government used financial disincentives to pressure the States and Territories to break up public electricity utilities into generation, high voltage transmission, low voltage distribution and retail entities. The generation part of the utilities were further broken up into separate entities covering the various power stations. The reason given for doing this was to increase competition and to make the industry more efficient. In practice in paved the way for privatisation. Since privatisation, there has been a re-aggregation (vertical integration) of various sections of the industry, particularly generation and retail. This re-aggregation was not opposed by the Federal Government.

According to the Senate Committee report, the Australian Energy Regulator (AER) “has been undertaking work in recent times … developing new ‘ringfencing’ guidelines preventing networks from favouring their own affiliates over other businesses offering competitive energy services”. This is at least ten to twenty years too late and indicates serious failure on the part of the AER. If disaggregation was necessary for public electricity utilities then it is even more necessary for private electricity utilities. Public electricity utilities are answerable to the consumer, private utilities are responsible only to their owners/shareholders.

There has been a lot of talk by electricity regulators, like the AER and its SA equivalent (ESCoSA, formerly SAIIR), about incentives for demand management but the fact is that in twenty years nothing tangible has been done and discussion tends to revolve around what’s good for the industry rather than what’s good for the customer. The reality is that the industry makes its profits from selling electricity, the more it sells the higher the profit. The last thing the industry wants to do is to decrease the demand for its product and demand management proposals revolve around decreasing industry’s costs not decreasing the demand for their product.

Chapter 3     Resilience from storage technologies and distributed generation

When the report talks about overall electricity demand, it is not clear whether total eletricity or just grid electricity is being referred to. This has been a constant problem over the last 10-20 years due to the fact that the NEM does not include off-grid contributions such as roof-top solar electricity. The rapid expansion of rooftop solar in the last decade has led to a decrease in demand for grid electricity, it has led to a decrease in the peak grid electricity demand, to a shifting of the peak grid electricity demand to later in the day, and to a decrease in the strain on the electricity distribution system.

There is concern, for example from the Australian Energy Market Operator (AEMO), about the increasing proportion of asynchronous generation. This is because wind farms and solar photovoltaic panels generate DC whilst fossil fuel power stations generate AC. Given the transition from fossil fuels to renewable energy, then the logical thing to do is to investigate a transition from AC to DC. One of the SA-Victorian interconnectors (Murraylink) already uses DC.

There is some ambiguity in the use of the term “large-scale” in reference to energy storage technologies. In some cases it seems to refer to a small number of very large energy storage entities in other cases it seems to refer to a large number of small energy storage entities.

The statement “the ability of consumers to modify their electricity demand is relatively limited at present” is ambiguous. There are a number of options available to consumers to reduce their electricity demand, including heating their water with solar hot water panels (not electricity), installing insulation such as doubled glazed windows, and making buildings more energy efficient. The cost of making these changes is offset by the ever increasing savings in electricity costs. The main obstacle to such modifications is the up-front costs, which could be overcome by a variety of government and industry mechanisms.

When discussing “the increasing amount of intermittent electricity generation” it is important to consider the time scale. Solutions for short time scale intermittency (such as a cloud passing over head) will be very different from those for long time-scale intermittency (overnight).

At the moment battery storage means lithium batteries. This is because they are very compact (high energy and power density) and because the rapid escalation in use (including electric vehicles) and unit size means that the price is continually reducing. They are thus well suited to relatively small (10 kW) battery packs such as those that are used in electric vehicles and in homes. Lithium batteries might not be the best answer for larger battery packs (>100 kW) such as those used for power station or wind farm back up. There are a number of alternative battery systems in development, demonstration and limited application stages. Several of these, such as the vanadium redox battery and the zinc/bromine battery are Australian in origin.

Off-river hydro storage needs to take into account possible contamination with toxic elements. Using old mine sites is likely to expose the water to finely divided toxic elements that may be leached by water containing oxygen. Oxygenated water is capable of leaching sulphide minerals such as the commonly occurring minerals pyrite and chalcopyrite to form sulphuric acid, a process known as acid mine drainage. Similarly, seawater, such as proposed for Port Augusta and Whyalla, is likely to be corrosive and to leach toxic elements from soils and rocks in storage areas.





April 28, 2017 - Posted by | AUSTRALIA - NATIONAL, energy

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