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AEMO plans for future (clean) grid, with no mention of base-load

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proposed NEM fig 5.

The Australian Energy Market Operator has kicked off a ground-breaking major new study in how to plan for Australia’s future grid, and in doing so has effectively thrown down the gauntlet to the government on its climate and technology assumptions.

In a discussion paper released on Tuesday in the first step of putting together an Integrated System Plan (ISP) by the middle of 2018, AEMO says the future grid will be dominated by wind, solar, and battery and other storage, and it time to put together a co-ordinated plan.

AEMO is also dialling in emission reductions cuts far beyond that contemplated by the federal government – including a “fast track” scenario that doubles climate ambition by 2030. The long-term emission cuts are assumed to be 70 per cent and 90 per cent in 2050.

The idea is to outline the major issues for the electricity system – how to incorporate the estimated 30GW of wind and solar that could be added over the next 20 years – and what extra transmission, storage and distributed energy might be needed to enable this to happen.

The discussion paper makes certain things very clear: wind and solar are the cheapest form of bulk storage, and planning must be done now to understand, and implement, the cheapest ways of incorporating this into the grid, and the best place to site them.

“NEM planners must prepare for and manage a rapid transformation of the power system, currently projected in the 2030s but which could occur earlier or later, as ~10 GW of coal generation is projected to retire,” the AEMO discussion paper says.

“The economics of wind and large-scale PV are projected to drive combined new generation of up to 25-30 GW by 2037,” as existing coal generation retires.

The ISP can be seen as a mini white paper on energy, and also as the first tangible sign that not energy institutions are in lock-step with a minimalist approach to emissions reductions and technology change.

In contrast to recent government energy white papers, which ignored climate, AEMO sets at the very minimum a 70 per cent cut in emissions by 2050, and includes a “fast change” scenario that aims for a 52 per cent cut by 2030 (rather than 26-28 per cent), and a 90 per cent cut by 2050.

“In the absence of emissions reduction targets beyond 2030, AEMO is proposing to apply an emissions reduction trajectory consistent with the Australian Government’s broader commitment to the COP21 Paris agreement to limit global mean temperature rise to 2°C,” it says.

And it cites the CSIRO Low Emissions Technology Roadmap, which found that for the broader energy sector to meet a proportional target of 26-28 per cent emissions reduction by 2030, electricity sector emissions may have to reduce by 52-70 per cent by 2030 and 90 per cent by 2050.

The Coalition government, on the other hand, has instructed the Energy Security Board, of which AEMO chief Audrey Zibelman is a member, to assume a cut in electricity emissions of just 26 per cent by 2030, around half of that seen as necessary by the CSIRO and other analysis.

“AEMO intends to apply an emissions reduction constraint of 52 per cent by 2030 and 90 per cent by 2050 in the Fast Change scenario for the ISP,” it notes (and on the same day that a government report found Australia behind on its emissions and still with  no policy to tackle them).

And in contrast to other energy institutions, there is no mention of the lights going out, and no mention of the fictional character known as DB (“dispatchable base-load”).

Instead, the focus is on “firm” and “dispatchable” and “flexible” generation, and the underlying assumption is that this will come from a portfolio of renewables, demand management and energy efficiency and various forms of storage such as batteries, pumped hydro, and solar thermal.

It could also come from household battery storage.

And, possibly prompted by the report into storage commissioned by chief scientist Alan Finkel, AEMO is to launch a new study to see how that battery storage can be harnessed for the benefit of the grid, and meet system peaks, rather than just individual householders.

To do that, it will model two “aggregation trajectories” that could see 45 per cent of new household storage linked and potentially working together, and another with 90 per cent.

Finkel’s report said in theory, all the storage needed to balance wind and solar could come from household batteries, and this so-called “distributed energy resource” , along with solar, features prominently in the AEMO discussion paper.

The ISP will also focus on the the creation of renewable energy zones (REZ) that AEMO expects will be scattered across the country, looking to best exploit the local resources, provide a degree of self-sufficiency for the local region, and be connected with other REZs.

NEM fig 9.

It makes it clear that the economics of wind and large-scale PV will win out over other technologies. It expects 25-30GW of new generation by 2037 – which is more than double that contemplated in modelling for the National Energy Guarantee for 2030.

AEMO’s expects energy storage (either pumped hydro or battery storage) to reach 10 GW of maximum output and 20 GWh of storage capacity by 2037, although most of this will occur after 2030.

“The provision of firm and flexible dispatchable capability in future will depend on the relative cost trajectories of pumped hydro, batteries, solar thermal, and (including fuel costs and limitations), GPG (gas) and coal generation,” it notes.

But, it adds, an accelerated cost trajectory for concentrated solar thermal generation could replace a portion of the solar PV and energy storage capacity.

This storage, in whatever form, will be used to smooth aggregate wind and PV generation across the NEM, reducing the need to dispatch higher marginal cost generation such as gas peaking plants at times when the renewable resources within a region are not available.

It also wants to focus on maximising fuel resources, and warns that concentrating too much renewable generation within an area can lead to diminishing return on further generation development.

It also seeks to explore the potential of energy efficiency, demand management, and the increase in solar PV – between them, they could cut 60Thw – or nearly one third of estimate annual demand – reducing the need for new generation.

Demand management, or load shifting, can also shift demand away from peak demand periods, when the power system is most utilised, and into periods during the middle of the day in regions with high PV penetration.

The discussion paper notes that while large scale solar and wind are now  the cheapest forms of new bulk energy generation, cost reductions will continue.

It also notes that the land area required to develop up to 30 GW of new wind and PV generation equates to less than 0.5 per cent of farming land in mainland eastern Australia (New South Wales, Queensland, and Victoria).

REZ potential

Its focus on REZs is also interesting, and it notes that many potential REZs areas appear to align well with transmission development projects already under consideration,

These include:

  • Eyre Peninsula in South Australia;
  • The route in ElectraNet’s proposed transmission line through South Eastern South Australia to SouthWestern New South Wales38.
  • Western Victoria, where AEMO is undertaking a Western Victoria Renewable Integration regulation investment test (RIT)
  • Far North Queensland (Queensland Government’s Powering North Queensland Plan).
  • Tasmania’s Battery of the Nation Project.
  • New England Renewable Energy Zone in Northern New South Wales.
  • Potential for co-locating wind generation near the proposed Snowy 2.0 project.

  

  • WR

    The largest scale demand management will probably revolve around the charging of electric vehicles (EVs). 7-day weather forecasts will be used to identify upcoming days when solar and wind generation will be low. In the days preceding these periods of low generation, people will be issued text messages encouraging them to recharge their EVs while RE generation is high (and while prices are low) . This will result in there being much less demand during the low-generation days when supply solar and wind supply is limited.

    • trackdaze

      Just a couple of kwhrs from a 50k strong fleet of V2G vehicles equals the SA big battery.

    • Andy Saunders

      You’re directionally right, but I doubt text messages will be the technology of choice. I think there will be a controller either aggregated by a retailer/another player, or a trading box being fed a price signal and making smart charging decisions.

    • Hettie

      I have visions of all those roofs that petrol stations have over their filling bays, covered in pv panels to power the ev charging points.
      Huge growth in cafés attached to same.
      EV charging points in every Maccas and KFC carpark, shopping centre carpark.
      The potential is unlimited.
      Cars charging while office workers are at their desks.
      Stop it, Het. You’ll have a meltdown.

      • MrMauricio

        you have seen the future-and its not that far away

  • Ray Miller

    I just had a look at the AEMO Integrated System Plan, impressive, and well done AEMO!

  • Carl Raymond S

    Straight lines. Linear thinking. That’s not how things happen. New technologies slowly reach critical scale, roll over a tipping point, then bam, suddenly they’re the new normal. Solar is there. Wind is there. Battery vehicles are at tipping point, as are battery and other storage technologies. This will not be linear. That red line will arc down and hit the bottom axis some time in the next decade.

  • Glynn Palmer

    AEMO is obviously taking a cautious planning approach. They are planning for the coalition to lose the cabinet benches next election or the one after. They are also acknowledging that renewables will continue the trend to lower LCOE’s.

    • john

      You are not kidding with the lower LCOE trend for RE, I am going to be very interested in the single plant 20 GW solar auction in India shortly.
      Every auction brings lower prices even in Au, I expect plants to be built that will take the price offered why?
      Because zero cost of energy the only cost is deterioration of the plant rather like a traditional plant wearing out and normal R & M.

      I think AEMO has a realistic outlook frankly the utilization of RE is going to happen regardless of Government policy, most of which in the last few years has caused sovereign risk, the death of investment.

  • Andy Simpson

    Is this a typo: “wind and solar are the cheapest form of bulk storage” ?

    • Hettie

      Obviously. “Supply” perhaps?

  • RobertO

    Hi All, Where is 2 Tonuge or his side kick Frier Tuck, or the Mad Monk, or even John Pierce. They must all be on holidays?
    This is beginning to look like someone in the AEMO has decided enough is enough. Stuff it we’re doing it. Good on them (and yes it may happen quicker than we all think it is possible).

    • Chris Fraser

      Perhaps this is the way it should be. The analysts, engineers and number crunchers are doing the real work of system design and are beating the dipshit politicians, negators, right wing nutters and the AEMC into irrelevance.

  • Hettie

    Move over, NEG. The grownups have done their homework, and proved you to be a Coalition of Fuckwits.
    Go, Audrey, you good thing!

    • Sophia McGrane

      it’s brilliant hey? well done AEMO! so pleased my original faith in Audrey appears to be true

      • Clearly AEMO is the entity that should be doing this analysis, should be setting the strategy and future plans as well as identifying the changes required in legislation to enable a cost effective, clean and reliable electricity supply system. Government should let the experts get on with it.
        Who’s idea was it to get Audrey into AEMO?? Quite an interesting and enlightened decision.

        • RobertO

          Hi david H, When Dr Finkel when to the AEMC to talk about what he had been tasked to do by the Fed Gov, He asked Whom is the Engineer here? “No one” was the answer and it is reported that Dr Finkel then asked “Why are we here at all?” He was not impressed with AMEC meeting.

          • Guy Stewart

            I am not sure who would be impressed with the work of the AEMC. They seem to be on a multi-decade go-slow.

  • Robert Westinghouse

    Some positive news…..at last

  • Thucydides

    Thank heavens, the adults are in the room. Cheers me up no end.

  • RobertO

    Hi All, and another note for all, “It about 7 and a half pages long!”
    Waytogo AEMO

  • Peter F

    What is even more interesting is that it is still largely based on existing technologies and large generation facilities. I have just been doing some numbers for a couple of regional cities and they can easily be net zero within the council boundaries so i suspect that in the long run most of the cost of additional transmission can be avoided.
    According to the NREL 14% of US roof area is suitable for solar. The same figure here would be about 18-20%. We have about 130-160 sqm of roof area per person 20% of that is 30 sqm or 5 kW of rooftop solar. Nationwide that is 125 GW of rooftop solar potential for an annual generation of 160 TWhr. If you throw in a proportion of next generation dual junction PV and extensive building of solar awnings over hardstands and car parks and throw in some serious efforts at energy efficiency it is theoretically possible to meet all our electricity requirements with on premises solar and existing and in progress wind, utility solar and hydro

    • christopher

      Great idea to ok utilise the house hold roof space, but the cost for bespoke installs will never match the low price achieved by the large-scale installations, voltage rises issues are leading to zero export senarios by the gentailers. Network and govt install cost add more than $1000 here in Canberra, that won’t change, plus Our chief solar hater, Barnaby Joyce, has just been appointed Minister for infrastructure, it’s not going the end well..

  • Robert Comerford

    Just wait till the idiots in Canberra get a hold of this…. heads will roll.
    AEMO not doing its masters bidding, can’t have that :>)

  • PaulC

    At last we see the distributed RE generation assets and demand management as opportunities instead of problems with clear recognition that change is unstoppable.

    But the real dust-up will remain over the dispatchable sources. We already have the NEG proposing some form of support for ‘reliable supply’. [If this is diverting demand away from ‘unreliable’ sources and non-firmed RE in particular, this is almost a form of Dispatchable Energy Target.]

    The key question remains whether this will provide a level playing field for firming, grid batteries, PHES, etc. – or whether the rules of the game will be fixed for fossil fuels. And then what happens as the existing fleet retires? Is the support being delivered enough to see new coal burners or peaking gas plants built (noting the problems with gas supplies)?

    For now, these questions on dispatchable sources seem to be deferred (by AEMO at least), but it will be very interesting when the whole topic resurfaces.

  • stalga

    The 0.5% figure for REZ’s is likely
    lower IMO because a wind farm doesn’t take away much of the grazing or cropping potential.

  • Ian

    Well done to the AEMO to put out a coherent attempt at decarbonising our grid.

    A couple of things though:

    1 the grid must be integrated with the transportation system. To get our economy to zero carbon, transportation must be electrified. EV will involve large amounts of battery storage and this will be far in excess of daily driving needs. Large scale renewables, namely wind and solar (and hydro), may be required for transportation, but the distribution to EV charging may not necessarily involve households. Households may very easily have the ability to cut the cord to grid and opportunistically charge their vehicles away from home sufficiently for all their energy needs.

    2. Distributed household battery systems will most likely not be directly available for grid stabilisation purposes unless these are subsidised heavily, or unless proper price incentives are given.

    3. The grid with connections to every suburban home is in danger of losing relevance, and may become an expensive alternative to other methods of energy distribution, even if energy trading becomes viable using block chain or other technologies. There is a danger that many large scale generators of any type will become unneeded stranded assets.

  • Climatemonster

    Good to see some good old fashioned government activity here – looking ahead, planning for new technological developments, mitigating likely future adverse events, having an aggressive mitigation scenario in your pocket for when the lethal heatwave/flood/drought wakes the public up. Real grown up stuff.

  • Alan S

    No mention of ‘baseload’? That’ll throw some LNP MPs into a tailspin. They didn’t understand what it meant but it was their stock response to solar and wind – apart from ‘the sun doesn’t shine at night’ of course.

    • Calamity_Jean

      You don’t need to understand something to quack it out like a character from 1984.

  • MaxG

    All well and good; however, this is only the document that sets out the National Transmission Network Development Plan (NTNDP) inputs that it proposes to use for the preparation or revision of the NTNDP for the following calendar
    year; the latter having to be published (with input via submissions) no later than 31 December 2018 for the year 2019. — Hence, by then this document may have changed significantly.
    At least it is a nice try to sneak in what needs doing; however, I do not believe the incumbents will take this proposal on the chin without a fight.
    In any case, I like the proposal.

  • epicycler

    no mention of baseload. Need to also ditch “dispatchable” … isn’t any unutilised available capacity dispatchable?

    Perhaps the biggest change will be in a management system that currently manages power to one that manages power and energy. Plus a change from centralised to distributed control.

  • neroden

    Good for Zibelman. I wonder when the COALition will try to get her fired?

    • Calamity_Jean

      Boxing Day?

  • dhm60

    Quite a remarkable situation in Australia.
    First Mums and Dads rebelled at being gouged by their generators/retailers and paid for their own PV systems. Then businesses caught up and started doing the same thing. Then (some) of the generator/retailers saw which way the wind was blowing and climbed on board. Now, finally, it seems the national market regulator has figured it out and, may if allowed by their bosses – our government, plan and engineer a national energy generation and supply system worthy of the name. A bottom-up rebellion.
    Totally lacking in the entire process for the last 5 years is any sign of a coherent policy from the national government for the nation’s energy supply. A truly remarkable dereliction of duty. The EU, particularly, the Germans must look at this schemozzle in utter amazement. No centralized planning??? Just chaos?
    If AEMO actually manages to convince their bosses, the knuckle draggers in Canberra, to allow them to do their jobs – not a given with coal-hugging Joyce now in charge of infrastructure; Australia might just start to take advantage of its copious renewable resources – 25 years late. I feel the politics and policy guidance will continue to be stalled until this hopeless crew are shoved out of office.

  • Colin Tree

    Shopping centre car parks would be a great location for neighbourhood solar arrays, plus provide shaded parking, plus power the shops through the day.

  • Aluap

    We have a government that lies to the Australian people. It is poisonous to “Advance Australia Fair”.