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W.A. says solar is the future as it prepares to dump coal

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The West Australian government appears to have overcome years of institutionalised resistance and recognized that the state’s energy future will be built around solar energy.

mike nahanIn a landmark speech this week, Energy Minister and state treasurer Mike Nahan said solar PV would meet the daytime electricity needs of WA within the next decade. Nahan noted that solar was cheap, and democratic, and was likely to account for all new generation capacity, and it would displace the state’s ageing coal generators.

“We expect that the bulk of generating capacity during sunlight hours in the [Perth] metro area in about 10 years time will be provided by rooftop solar,” said Nahan in a speech to an energy conference in Perth.

“That’s the reality. So it is going to provide the bulk of additional capacity going forward.

“Solar will also displace a lot of the existing [coal-based] capacity. It’s low-priced, it’s democratically determined and it’s something we’re committed to facilitating.”

This is an extraordinary admission for someone, who as the former head of the right-wing think tank, the Institute of Public Affairs, had constantly ridiculed the prospects of renewable energy and solar in particular.

But as the IPA and other conservative commentators continue to ignore the plunging cost of solar, and continue their stranglehold on the views of the Federal Coalition, Nahan has moved on.

Nahan’s comments are also in stark contrast to the findings a review commissioned by his own government last year, which bizarrely did not even consider solar as a future technology and even contemplated importing coal from Indonesia to solve future energy needs.

But Nahan has been presented with the reality of a state, which as RenewEconomy has mentioned on several previous occasions, is something of a basket case.

The centralised, fossil fuel system has relied on massive government subsidies that now equate to more than $600 million a year, or more than $500 per household.

This is putting a massive dent in the state’s finances – particularly as the mining boom ends – and Nahan admits that it is unsustainable.

He wants the subsidy phased out within a few years, which will make rooftop solar – and battery storage – even more attractive as retail electricity prices rise. So much so that as recently as May, Nahan predicted that virtually every household and every business would have rooftop solar within a decade.

Small-scale solar is growing at 20, 30 per cent a year and will do nothing but accentuate and it is actually quite cheap,” Nahan said this week.

The other massive government subsidy went to the system of so called capacity payments, which Nahan admitted this week had been something of a rort. As we noted way back in 2012, fossil fuel peaking plants had been built and never switched on.

“We needed a capacity market as an insurance mechanism but it has become a business plan for too many people,” Nahan said this week.

“Too much of our generating capacity is nothing more than a capacity plate, that it exists, it enters the market, or stays in the market solely because it gets a payment from electricity users to come in and stay.”

About 170,000 households in the main WA grid, known as the South West Interconnected System, now have rooftop solar, amounting to around 500MW of capacity – the equivalent of a major base-load power station.

This is expected to more than double within years, resulting in excess capacity. And because of the contracts given to the capacity market, the excess capacity that will need to be shut will come from the government-owned utility, and its ageing coal plants in particular.

“Most of it is in (government owned) Synergy’s hands, 70 per cent, so some will shut.”

WA is not the only state where rooftop solar will play a dominant role in the future energy system.

South Australia already meets more than 40 per cent of its demand from wind and solar alone.

The Australian Energy Market Operator has forecast that South Australia will meet all of its daytime energy needs with rooftop solar on occasions within a decade.

This is turning conventional energy systems upside down. In such a market, there is little or no place for baseload generation. Indeed, South Australia’s two coal fired generators will be closed, possibly as early as next year, leaving gas and storage, and the connection with the main grid to provide the remainder.

In W.A., however, there is no connection to the main grid, so it finds itself in a similar position to Hawaii – a state with strong renewable resources and a declining and expensive fossil fuel infrastructure.

Hawaii has decided to embrace the decentralized future and set a 100 per cent renewable energy target by 2045.

Nahan is unlikely to make any similar undertaking, but it is clear that W.A. now stands at the cutting edge of the transformation from a centralized fossil fuel system to a decentralised, renewable based system.

Its emerging wave power, excellent wind resources and solar resources, both small scale and large scale, a push by miners into solar and storage solutions, and the prospect of a renewable-based hydrogen fuels for transport and export, open a huge range of opportunities.

It seems that Nahan has now recognised that. This is a big change in his own thinking. Just a few years ago, in a parliamentary debate, Nahan insisted wind energy required “one-for-one” backup by fossil fuel generators and did not reduce greenhouse gases, said solar cells were “hugely more costly” than polluting alternatives.



The real test, however, will come in how Nahan allows rooftop solar to be further deployed on rooftops, and overcoming the significant cultural barriers within Synergy.

There has been talk of higher fixed tariffs, even penalties for disconnecting from the grid as the WA government tries to protect revenues from its grid. At the same time, it is also promoting micro-grids as a cheaper option than transmitting fossil fuel energy over large distances.

Still, it is interesting that Nahan’s remarks come at the same time as Jim Rogers, the long serving but now retired CEO of Duke Energy, the biggest utility in the US, said that distributed solar and storage was the only answer to bring electricity to the 1.2 billion who don’t have it, and not centralised fossil fuel generation.

Rogers said developed economies will have to go the same way, despite the massive sunk investment.

“It’s very clear to me that the system of electric power we have in North America and Europe, which is now being instituted in much of China and India and elsewhere, is not sustainable for the future of the planet. So we’re going to have to figure out something else, and soon.”

Nahan and Rogers should have a quiet word to the IPA, who can then perhaps pass it on to the Abbott government.

 

   

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  • Alistair Spong

    Giles , & yet in the last two weeks Synergy told a Margaret River Resident that if they installed a battery bank or an electric car they would be disconnected . This came after a meter change from the old analouge spinning disc system – they had previously installed a 5kw solar system with no problems . A story worth following ?

    • JonathanMaddox

      Yes, sounds very dodgy! It’s understandable that they’d be wary of batteries that might feed back into the grid, but standing in the way of a car charger seems just pig-headed.

      • Peter Campbell

        How can you stand in the way of a car charger? In practice most EV charging is done from an ordinary power point. It looks the same as an electric kettle to the grid.

        • JonathanMaddox

          I was assuming they wanted a heavy-duty one with a three phase supply. Most EVs can be charged (slowly) from a bog-standard socket, can’t they?

          • Peter Campbell

            Yes, the bog-standard wall socket is the lowest common denominator. Faster charging would generally only be an issue for commercial vehicles doing high mileage (say, to and from a depot) or for intercity travel.
            I have been driving a DIY converted electric car for over 6 years and we got a commercial one as well about two years ago (Mitsubishi iMiEV). Both can charge happily from a bog-standard 10A single phase socket. The iMiEV comes with a charging cable with a 15A plug but actually only draws 10A. A Holden Volt EVSE charging cable works fine for it and comes with a 10A plug. This rate of charging is fine for most purposes. You get a useful top up in an hour or two of charging but usually you just need to know it will be full in the morning.

          • Alastair Leith

            bigger issue of lowest common denominator in US is 120VAC

        • Riddley_Walker

          You can charge a Tesla on a 10 amp standard household supply. Takes about 12 hours 0 – full charge.

          • juxx0r

            10 amps, 240V, give 2.4kW, over 12 hours, gives 28.8kWh without losses.

            How the hell does that give you even 60kWh?

          • Peter Campbell

            As a long-term EV driver, “How long does it take to charge?” is an FAQ. The answer is ‘It is hardly every relevant.’ You don’t run an EV down to nearly flat then charge it up. You plug it in when you get home. It is full the next day. How long did it take? Not really relevant. The analogy is “How long does your cordless phone take to charge?” Answer: Don’t know. You put it back to charge when you are done with it. You don’t wait till it is run down before you charge it up. If the phone rings again not long after the last call, it has enough charge, even if not full, for most conversations….

          • MaxG

            You forgot that the Tesla wall has a double electron capacitor which doubles the output.
            (Sorry, it’s not April fools day yet.)

        • Miles Harding

          It’s Margaret River and there’s a DC fast charger in the middle of town, capable of a flat(ish) to full(ish) change on a Tesla in about an hour, so 10 amp ‘trickle’ charging at home would work perfectly. Even better if it’s done during the day when the power is supplied directly from the PV panels, bypassing the grid altogether.

          All this sounds like Synergy are being pr**ks again and trying to force their agenda onto customers that clearly have a far better and more sustainable one they wish to pursue. From other inquiries, the network operator (western power) is only interested in technical issues, so politics are the best candidate here.

          Perhaps their threat to disconnect could be taken as a challenge? is it time to abandon Synergy and the grid?

      • Colin Nicholson

        I think the storing of off-peak in batteries and feeding it back to get some sort of FIT is a red herring. A battery capable of a thousand cycles of a KW still costs in the range of $200 to $300. So just using a battery in that manner is 20c to 30c per cycle in capital costs. Batteries will be very useful for utilities who pay huge prices for peak electricity, but for the average household with tarriffs of around 20c and 40c, batteries are still marginal

        • JonathanMaddox

          I think we were talking purely in the regulatory sense. A residential customer asks their electricity retailer to assist with installing some appliances in their home with connection requirements over and above what a normal socket should be used for. Quite normal if you’re talking about ovens, air conditioning or heavy power tools in the back shed. Also normal nowadays with solar PV. But these are two new and unfamiliar suggestions, the car and the battery pack, and the utility is pushing back. Probably largely a knee-jerk reaction, they’ll get used to it as more customers ask.

          They *may* continue to push back against customers’ batteries for the same reasons they have pushed back all along against domestic PV. PV has become normal, batteries might well become commonplace as well, through a similar gradual process of occasional obstructionism, challenge, and occasional enlightened facilitation.

          Batteries do have a better value to the utility than they do to the consumer, but if consumers for whatever reason are willing to buy them at a loss, the utility really should jump at the chance (at least if they’re anywhere near the locations the utility could use some storage).

        • john

          You are kind of correct Vector use this way for their network.
          However storing energy for the householder to use is sensible as it reduces the amount of power they use.

      • phred01

        Someone must hi on pot Who would store off peak @17c/kw to collect 5c?

        • JonathanMaddox

          I don’t know. Who would spend sixty grand on a car when you can get one for ten?

          • mick

            depends on the car

          • phred01

            Well, Just had an education with diesel utes Yep they are going cheap 2nd hand @ auctions 3 yr old about 100k on the clock…u would think an excellent buy 10-18k. Common rail injectors have to be replaced @ 100k cost around 6k + fitting then programming to the car’s computer the total cost 8-10k and this doesn’t include if other thing like brakes tyres etc need to be replaced. So the the 10k car doesn’t look cheap after all. Speaking to guys in the trade once the warranty is gone the cars are off loaded. These new diesels are great whilst still newish

          • john

            Perhaps zero service perhaps bugger all cost to drive
            Perhaps you have not looked at the long term of ownership of an EV or and not $60k

        • Ronald Brakels

          Peak electricity rates on a Time Of Use tariff are about 47 cents a kilowatt-hour in Western Australia.

      • MaxG

        There are already enough systems on the market, which will not export to the grid form the battery. E.g Selectronic products (Made in AU).

    • phred01

      Who would store off peak @17c/kw to collect 5c Someone must hi on pot

    • MaxG

      Blackmail!! What a bunch of rotten bastards.

    • Alastair Leith

      Yes that story even made the Weekend West (The West is colloquially known as ‘The Worst’ for it’s reactionary/conservative framing). Perhaps the journalist is a RenewEconomy reader ;-).

      When Jamie McCall asked for a new meter to allow him to export from his 5kW PV system they made these demands and also Synergy said if he didn’t agree to their conditions they’d disconnect his PV system.

      Synergies official response to journalist was to blame network operator Western Power and say that they aren’t prohibiting storage and EVs but simply denying people the right tho have storage and/or EVs *and* export to the grid. That’s all! Forget about the load balancing grid service they provide, and the peak demand supply at wholesale price to Synergy on offer! Why would Synergy be afraid of customers exercising price arbitrage when customers exporting to the grid only get standard wholesale rate not spot wholesale price for the power. Sure there’s network issues to be managed but a blanket refusal for storage and grid connection seems pretty regressive.

  • john

    With a $600 million subsidy to the present old gen sets presenting the residents of the state with a visible reason to lesson the cost and if those same residents are prepared to spend the money to reduce the need for the spend to the budget the bottom line is a net gain to the whole of the residents power users and not.
    A simular case can be made for the remote aspects of Qld and NSW where a large subsidy is paid by the coastal users of power.

    • Jacob

      It would be good if the green groups visited the remote communities in AUS who get their electricity by burning diesel, took photos and show them on the ABC.

      • john

        That would not exactly show much other than the use of PV or possibly wind would reduce the cost.
        If for instance they used PV and Wind and Battery back up the cost would be a better outcome for them.

  • Pedro

    Now that the mineral resources boom is over and it appears governments of all levels seem to favour the mineral resource sector the RE industry should start to change its language and point to the fact that they are energy mining, a rapidly growing sector worldwide. Perhaps the argument has to be framed in a way that pro mining politicians can understand and fits in with their world view.

  • Jacob

    The IPA in its recent article in The Australian made no mention of batteries!

    The article had a stale and redundant line about solar power only being available when the sun is up.

    Probably because the IPA is totally corrupt and ignorant.

    • john

      No just stating the usual bog standard message for the poorly educated who read the MSM and only hear the shock jocks

  • Ted Toastie

    Amazeballs! Let’s hope he and his govt is SERIOUS about following through with this.

  • phred01

    This must be upsetting to the rabbit!

  • Chris Drongers

    WA is a strange place in innovation in some ways – on one hand it is a small, isolated population in a desert with an ingrained Qld type conservatism.
    On the other hand, most of the population in WA don’t give a rats about how the place is run as long as the air-conditioning turns on and Domino’s still delivers pizza. Because of this WA has been able to do things in out-of-sight things like conservation (1080/strychnine baiting of cats and foxes, remote area hybrid power systems, blue-gum industry, KAMS air quality management and waste/resource linking in a heavy industrial area) that would be impossible in larger, more politically involved states.

    Good thin that Nahan has recognised and is presumably acting on the emergence of solar in WA. I am dream-building my new house as a highly insulated, energy efficient small plot design with a simple shed roof able to take up to 10kW of PV, enough to run the house, the car, and maybe sell a bit on the side.

  • mick

    yeah right wa treasurer supports re hockey wants to ditch the queen whats going on?

  • Ian

    Home and business solar generators should insist on at least two conditions: 1. Unlimited access to the electricity grid to export power – whether this 5 KW or 5MW, 2. A fair feed in tariff at any time of day or night without regard to the source of generation , be it solar, wind, hydro, storage, fuel cell, petrol or diesel generator. Most suburban residences cannot fit more than 5 to 10 KW worth of panels on their roofs. storage of electricity in domestic batteries is more expensive then grid power at present, so really the network operators have no fear that opening up their grid to distributed generation and storage will change much at this time, but the freedom to generate power and export it at any time and of any quantity will drive innovation and appropriate network investment to make for a reliable , robust network. As Nahan has pointed out, the inevitability of distributed generation of power is at hand, they need to embrace this wholeheartedly. To clarify this proposal, open sesame to distributed power exports, the network operators in return can pay a reasonable feed in rate , be this 5 c/ KWH or more or less.

  • Riddley_Walker

    One would think that Hawaii would be running on geothermal by now.

  • JeffJL

    When Mr Nahan is talking facts and ignoring politics he is great to listen to. Heard him on the radio one day when talking about a stuff up in Synergy. He started doing the political stuff trying to defend the indefensible and then changed tact and admitted everything saying it was not acceptable. If he keeps this up I would be tempted to vote Liberal in WA if he was made the Liberal leader despite his IPA links (and his accent).

  • Rob

    Meanwhile the bulk of LNP politicians, including the new generation now emerging from student politics, are still sticking to the Tea Party talking points. Truly a party of dinosaurs: http://www.onlineopinion.com.au/view.asp?article=17628

    • juxx0r

      NEVER trust a website that can’t fit a whole article on the one page.

  • Andrew Woodroffe

    We have around 1000MW of excessive generation capacity in WA (IMO Statement of Opportunities 2015, p76). By strange coincidence we also have around 1000MW of old coal in Muja A,B (built 60s) and C, D (built 80s). The Reserve Capacity they provide but WA does not need costs around 1000MW x $120,000/MW a year = $120 million.

    (And there is an addition $15million/year the state bails out the coal miners to keep them going).

    Phasing them out will mean an immediate increase in gas consumption to make up the lost generation. It will also create a demand for more wind plant – plenty of room in WA.

    Otherwise, WA will be buying half it’s LGCs from the east coast as we are only halfway to the 2020 target will all the lost economic benefits that entails.

  • Ronald Brakels

    I appreciate the recognition that rooftop solar will be providing the bulk of the daytime electricity in Western Australia. In the east I get the impression that the push by some for utility scale solar is all about locking in Power Purchase Agreements that are much higher than what the average cost of daytime electricity will be, thanks to rooftop solar. But whatever form of solar gets built, it will still be better than coal.