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A coal-based grid in 2030 will make Australia un-competitive

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kennedy wind solar

The man behind the world’s first hybrid project combining wind, solar and battery storage says Australia will become uncompetitive if it maintains an electricity grid based around coal and gas in 2030.

Roger Price, the CEO of Windlab, which is about to begin construction of the first stage of the Kennedy Energy Park in north Queensland, says renewables will beat even existing coal-fired generators in both cost and flexibility within the next few years, and could replace thermal generation if the policy settings allow it.

In a wide-ranging interview on RenewEconomy’s Energy Insiders podcast, Price says the industry is disappointed by the federal government’s proposed National Energy Guarantee, describing it as a “fourth choice” scheme that will create uncertainty and push up prices in the next 12-18 months.

“The industry is disappointed,” Price says. “We’ve been through this a number of times. It’s creating another period of short-term uncertainty … that we have to deal with. It doesn’t help investor confidence, and it doesn’t help short-term activity in the industry.”

Price, whose newly listed company has projects in Australia, north America and Africa, says there are enormous amounts of capital focused on renewable energy around the world, indicated by this week’s purchase of a $5 billion wind and solar portfolio by US and Asia investment giants.

“The world has decided – whether they be Chinese, European, or American investors – to shift to renewables,” Price says. “All Australia risks doing is passing up opportunity to attract that capital and the opportunity to transition the network to a clean future.

“A thermal-based network in 2030 will be fundamentally uncompetitive with the rest of the world.” The Coalition’s NEG envisages that two-thirds of Australia’s electricity supply will come from coal and gas in 2030.

Windlab this week reached financial close of the Kennedy project, and will begin construction within a few days of the 43MW of wind, 15MW of solar, and 4MWh of battery storage, using Tesla technology for the latter.

It’s a world first combination behind one single connection, Price says, but even more impressive is “Big Kennedy”, a 1200MW project featuring both wind and solar, and storage, which Price says could deliver much of the region’s “dispatchable” power needs when completed.

Here is a summary of the interview:

On renewables:

“Solar pricing will fall to $US20/MWh by 2030, and wind will not be far behind,” Price says. So renewables will be “fundamentally cost competitive, even with existing brown coal.”

Windlab began as a CSIRO research unit that specialised in finding good wind resources. Price says the capacity factors of the company’s new wind projects in Victoria – Coonooer Bridge and the nearly completed Kiata – were “well over” 45 per cent.

Kennedy first stage was 45 per cent and “Big Kennedy” would be between 45 and 50 per cent. “That is the expectation of the modern wind resource,” he said.

Price says “the cost of renewables has dropped to the point where our modeling suggests that we could build our own connection into Townsville, as long as Big Kennedy was more than 600MW.”

On ‘baseload’:

“A lot of people talk about ‘baseload’. What we really want is low-cost energy that is able to meet network demand. And that is what we are demonstrating with low-cost renewables.”

On the proposal for a new coal generator in north Queensland, which is supported by the conservative parties, Price said: “I’ve yet to find anyone who understands how the network operates who thinks that is the case (that we need a new coal generator). Even the Energy Security Council, a lobby group for fossil fuel generators, agrees.

“Queensland has the largest penetration of coal in the NEM (National Electricity Market),” and the newest fleet. “You can’t run a network on 90 per cent coal. It’s just not flexible enough. I don’t know what a new coal generator would do. It could be built, but might never operate.”

On the National Energy Guarantee:

Price is one of a growing number of people who were initially hopeful about the NEG, but who now see it as potentially erecting barriers to renewables, protecting coal, locking in dominance of incumbents, pushing up prices and failing to meet emissions targets.

Price said it not a policy, or even a plan. Just an idea to have one.

“It’s very frustrating,” Price says. “The way I think about the next couple of years is as follows; we will have another debate, more discussion, more finger pointing over the next 12 months, then a policy framework running into the 2019 election. Then, who knows?

“It’s difficult to see a federal government of either colour resolving this issue anytime soon.”

On Kennedy and “Big Kennedy”

Kennedy will be the first time anywhere in world that wind, solar and storage is put together behind one connection point. With more storage, say 15-18MWh – something that could be added as costs come down, “it would do a very good job of meeting demand on a network basis.”

It could also keep the lights on in nearby Hughenden and Julia Creek in the case of a network outage elsewhere.

“Big Kennedy” which will be 1200MW of wind, solar and storage, will likely be mostly wind, because of all the other solar projects being built in Queensland.

The cost will be low enough that with a minimum 600MW it could justify its own transmission line to Townsville, but it is hopeful that the Queensland government commits to a new line that will pick up other projects like Genex and Forsyth to bring in more grid resilience and more efficiency.

Indeed, he says that Kennedy could enable the government to cut the cost of the $600 million Consumer Service Obligation (which guarantees the same price for regional customers as Brisbane and the south-east corner) by 10 per cent –  a saving of $60 million a year on that metric alone.

On storage and dispatchable power

Price says storage does not need to be co-located with wind and solar plants, and might be better placed near the point of demand, and is concerned that policies should reflect and allow that.

“We are building Kennedy as stand alone hybrid behind one connection point. You don’t need storage near the generation source. You may be better off putting it near the demand centres.

“That means that projects like Kennedy can be done in a virtual sense, with generation in one place and storage in another,” he says, adding it is important that rules and policies allow that to happen. “Most technical experts suggest it is best to put it close to demand rather than generation.”

The role of the states

Price says the uncertainty around the NEG and federal policy means that the renewable energy industry will continue to rely on state-based initiatives. “Those states which are progressive and looking at how to evolve networks over the next 10-15 years are the places where investment will continue.

“It is interesting in the ESB (Energy Security Board) letter (to the federal government), that maps out the National energy plan, it does talk about states putting in their own targets and goals.”

This could allow states to have their own mechanisms. In any case , if a number of states “get on with it, we will see by early next decade that those states have fundamentally benefited from it.”

On the future:

“There is little we can do (about the cost of) gas, but we can build renewables … and renewable energy is putting downward pressure on prices, and that is only going to continue.”

Price said “hopefully we can get through” the politics and the electioneering,  “and get down, as one famous politicians likes to say, to economics and engineering. And then the answer will become self-evident.”

You can hear the full Energy Insiders Podcast episode with Windlab’s Roger Price below.

  

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  • Joe

    A change in Government is a big part of the solution. It is clear that The COALition are playing the part of spoilers and purposely getting in the way of the transition out of FF.

    • trackdaze

      With barnaby and roberts gone we may well have.

      • Robert Comerford

        I wouldn’t get too exited. Barnaby is only gone for a few weeks.
        Good to see Robert gone, Just hope the people of Ipswich are bit smarter these days

        • solarguy

          Roberts, is unlikely to get back in. He only got there on a few votes, in the first place.

          • Joe

            ‘Aussie Robbo’ is making a run for Ipswich in the QLD State election…there is just no getting rid of the muppet.

          • solarguy

            Now that changes things a bit. The muppet as you call him, is an avangelistic flat earther, who probably still believes in santa clause. He is a serial moronic pest, that should be stamped on like a cock roach.

          • Joe

            When the Elon starts his rocket affairs to Mars ‘Aussie Robbo’ should be given a free one way ticket. He can do plenty of ‘The Empirical stuff’ along the way..is Planet Earth round? – yes, does Planet Earth revolve around the Sun? – not sure, need to get a lot closer to the Sun than Planet Mars, is Planet Mars habitable? – hell yeah, if Matt Damon can do it ( in the movie, ‘The Martian’ ) then ‘Aussie Robbo’ can do it!

          • Jacob

            let’s play the ball not the man gents.

  • Cooma Doug

    Agree with every word

  • Dee Vee

    $20 per kw/h will never be competitive with the real cost of coal generation of $3 per kw/h. Only by artificially inflating the cost of coal generation and subsidising renewables will your fantasy ever come true.

    We can actually only ever be competitive if we stick with coal.

    • AndrewATA

      LOL I think you mean $3 per MWh. Only out by a factor of 1,000.
      But after fixing up the unit you’re still wrong. Even in the “good old days” of over-supply (1990’s), old paid-off coal-fired power stations costed $30-$50 per MWh. New coal-fired power stations would run at a levelised cost of $70 to $140 per MWh.

      http://old.co2crc.com.au/dls/brochures/LCOE_Executive_Summary.pdf

      For renewables, $20 per MWh isn’t the whole picture though, in a fully-renewable grid we still have to allow for battery storage and extra transmission. Add $30 per MWh for that. (ANU 100% renewable analysis)

      Renewables beat coal on cost.

      • Mark Roest

        Today, add $30 per MWh if you like.
        By 2019, add $18 per MWh, declining in stages
        By 2021 (maybe 2020), add $10 per MWh, declining as battery life is progressively extended.
        Remember that most of the new infrastructure won’t go in next year or the year after!

    • trackdaze

      Why did Engie close Hazelwood?
      Making too much money perhaps?

    • RobertO

      Hi Dee Vee, where do you get the $20 per Kw/h from (even the wholesale market has not yet made that price?) Starting with feed in costs wind and Solar are very expensive to feed at $0.00 per day, Coal on the other hand has a need of both coal and water, never mind the polution that it causes both dust and particulate matter, most of which it continues to pour into the atmosphere along with the H2SO4 and other. Our PM admitted on Tuesday 17 Oct. 2017 that RE was cheaper than Coal and as part of the NEG all support for RE were gone when the reached the target.

      • Joe

        Robbie, ignore Dee Vee …he a Trolli!

    • solarguy

      Sorry your completely brain dead.

      • Joe

        ..my Solarman…Dee Dee….he a Trolli.

        • solarguy

          Of course he is, that’s why I made the comment I did Joe.

          • Joe

            Well spotted !

  • trackdaze

    Its uncompetitive now. USA runs its massively sophisticated economy on 30% coal (and falling) at 12c kwhr USD.

    The RWNJs in Oz get an Eye twitch and start drippling on about blackouts at the thought of coal falling below double that % whilst the effective price here is double in USD terms.

    Prescisely why Engie closed Hazelwood expensive to run. Same goes with AGL and Liddell.

  • RobertO

    Hi All, I am hoping that by the time we get to the next election people will be more attuned to solar on household roof tops and know that it save me money having it there. If I can do it why can our Fed Gov do something that encurages more RE cause they seem to be cheaper and will reduce my household electric prices. Some business are protected from price rises but a lot of small one’s are not and they will talk about the fact that some have Solar on their roof. So long as we get a Fed Gov that wants RE and has control of the Senate we should be OK in 2020 or 2021 to start down the RE pathway again. Also by that time it may be more expensive to feed coal to a power station than it costs to build new RE plant. Coal support will die that day.

  • Mark Roest

    It appears that those making the decisions (against renewable energy and energy efficiency) do not identify with the ‘body politic’, or the citizenry, or the public, or humanity — however you want to call it — or by nature. They are unmoved by those realities, and are moved by money and class membership associated with money.

  • Peter

    The truth, of course, is that we must build new power generation facilities and redesign the grid to cater for the new shape of things. Renewable energy costs. But repairing old and building new coal generators costs more.

    The fallacious thinking is the same that is bringing us today’s NBN – good money after bad, instead of getting it right in the first place. Do it right; do it once; do it now.

    • MrMauricio

      its already been f-ed up 3 times so far

    • nakedChimp

      Your last words ring only true if you’re the one paying for stuff.. look at it from the side of the guys who is being paid to provide/build you the stuff.
      Can’t be done often enough and bad enough, so they get more.
      And that is were the meat is.

  • Radbug

    Bob Katter, the new king maker, will not look kindly upon Kidston’s economic viability being damaged by the NEG.

    • Joe

      Yes, not that long ago we saw on ABC TV, Bobsie Katter ‘The Mad Hatter’ did that little tour with good mate Anthony Albanese and my, my was the Katter enjoying the thought of it all…Big Wind and Big Solar coming to his electorate up in the Far North. Look out anyone getting in Bobsie Katter’s sights who might be trying to stymie these RE projects.

      • Radbug

        Joe, I can’t believe it! Malcolm got up in front of the journos and declared that all the non-Green cross-bench MHR’s are … in the bag! I cannot wait for the next enthralling episode of “Ma and Pa Kettle Run Canberra”!

        • Joe

          Not sure how much faith we should put in this…”in the bag” claim of Two Tonguer Turnbull. I mean it was only recently that ‘Constitutional Expert Malcolm Turnbull Esq’ declared with a thundering voice in Parliament that The High Court would rule that now ex- Deputy PM Bananabee Joyce was in the clear with that little problem of ‘Citizenship Fraud’ ( my description ). I guess Two Tongues Turnbull now needs to apologise to The High Court and while he is at apologise for misleading the Parliament….misleading Parliament is serious stuff.

          • Radbug

            Anna P. (I can never get her name right!) is holding the QLD state election on November 25. It’ll be enthralling to see if the Canberra “stuff” will reflect badly on the state LNP.

    • nakedChimp

      I just hope so.
      We got some local rednecks up here that are made right out of Roberts wood..

  • Ian

    Not withstanding the NEG and the survival of coal generation or of large scale renewables, what sort of energy market do we want from 2030?

    Is it to be well heeled citizenry acting like consumers buying from a centralised grid much like 15 years ago. Or is it to be millions of self reliant suburban homes and businesses doing their own thing, not even connected to a grid, or maybe a type of dynamic marketplace with many diverse players buying and selling electricity and other electrical services across an electrical highway system( or grid)?

    What thoughts on this?

    • Mike Dill

      Agreed. Rooftop solar and Distributed Energy will soon cost less than running a coal plant, and is already below the cost of transmission in many locations. Storage at less than grid cost will doom the remaining coal plants.

    • Jacob

      Ian, almost certainly we will be trading electricity credits through automated markets – just look at some of the blockchain companies that are already emerging with what can only be described as embryonic technology.

      I can imagine in 2030 that every month I’ll receive a prompt to log into my electricity dashboard, view the trades that my battery has taken part in with dozens of different entities, from my neighbors, to large retailers having a sale, to the big-box store with the solar installation on its roof, to the high-frequency battery trading business behind the fish-and-chip shop. I’ll set my desired charge level and forecast my demand for the next month based on suggestions from the battery and whether I know I’ll be on holidays or have guests, and possibly withdraw my earnings if I have a good solar array.

      Maybe I’ll be able to bulk-buy kilowatt-hours from some companies at a fixed rate or sell the rights to all of my excess production to a battery company making a hedge on the sunlight hours of houses in my neighborhood.

      • Ian

        Your scenario is a nice optimistic one.

        My favourite is very cheap batteries , most likely lithium, resulting in competitively priced EV, ample home storage for about 2 day’s worth of electricity demand, lots of rooftop PV and good vehicle to home grid exchange of electricity, any shortfall on prolonged cloudy days easily made up by a short trip to the grocer to recharge the EV. The static grid connection a distant memory. Surplus solar electricity used for discretionary loads like air-conditioning, pool heating, hobbies like cottage industry manufacturing or EV charging for friends and neighbours

  • Rebecca

    An inquiry into LNP & two Parliamentarians & their input into the decisions made Barnaby Joyce a dual citizens 12 years making decisions that effect all Australians. Also Fiona Nash, Malcolm Turnbull has shown extreme disrespect to our Australian Constitution & refused to stand his two aside. Congratulations to the two Greens for the respect shown to our country. Malcolm Roberts still only sees things his way. I hope our Parliament can go on into the future with honesty & integrity, some how I think not. A concern I have is the Royal Brisbane Hospital & their Advertising for Coal Mining Corporations, what an insult for patients suffering from Black Lung Disease & other ailments connected with coal mining, Dr’s have voiced their concerns to no avail. To my mind this is a form of brain washing & a continuous of LNPs Coal is good for humanity.

    • Joe

      The COALition are criminally irresponsible, purposely so, with their Coal forever antics. They are willing to trash the environment, the greater good, by persuing a benefit of immediate profit for a selfish few that couldn’t give a toss about anyone else. …LNP Coal is good… for the LNP and the Coal Barons.

      • Rebecca

        I believe all us none believer’s that coal is good for humanity still have a fight on our hands, but this is a fight worth winning. Malcolm Turnbull also pushes for a Republic, hope after all this dual citizenship fiasco, the Australian people realise why.? Malcolm Turnbull or any other wanabe cannot manipulated our High Court.

  • Robert Westinghouse

    The States need to go it alone and establish scientific based (renewables) policies. Dump the Commonwealth as everything they touch is for the benefit of BIG business not the people. So, what is wrong with democratising and regionalising power??? I forgot LNP is sleeping with BIG Power….

  • Michael Murray

    In case anyone is missing them the podcasts are really interesting.

  • Richard

    Actually the NEG is very sensible policy. I have been a supporter of this site for a fair while and I agree with the sentiments. But I have always pointed out that without storage and backup the true costs of renewable are not reflected in pricing because they are essentially freeloading off the existing system.

    Driving coal out of the market is a good thing because we need to reduce emissions as quickly as possible. But it can’t be done unless there is cost effective backup generation or storage.

    The governments policy recognizes this reality and it allows for flexibility among state government targets or future federal Labor/Green government targets. But those targets will have to include a certain amount of 24/7 power to cover contingencies. Perfectly sensible and with the rapid decline in cost of various types of storage going forward, it shouldn’t greatly impact on the overall cost of electricity.

    Nothing is going to stop the closure of the coal plants which are coming to the end of their economic life. No private investor will build new ones unless they are government subsidized for decades, virtually zero chance. So we need economic certainty and good policy to guide investment towards a clean future, without compromising our economy.

    I find it sad that the ideological drive is so strong in some people “Giles Parkinson” that they refuse to accept that this policy is a good way forward. Like “The Greens” from the past they refuse to accept any policy that isn’t 100% to their liking so consequently we end up with no policy and the debate being won by the polluting incumbents.

    Turnbull has handed Labor a gift with this policy that they can shape to their political liking as long as they reflect the price of storage and backup to replace the closing fossil power plants.

    I can also see Frydenburg replacing Turnbull before the next election and winning it off the back of this policy breakthrough. He has shown himself to be a masterful political operator, in direct contrast to the incumbent!

    • RobertO

      Hi Richard, When I first read this statement of your’s I thought “Your kidding me?”. Then I looked up some of you past statements and realised that your serious! (“Black” comes to mind).

      • Richard

        In this case I’m being serious, although Frydenburg winning is a bit of a stretch, but he would have a much bigger chance than Turnbull.
        Re the Libs, they will do anything to slow down the energy transition, that is a given. But the ongoing war is not going to help speed up the transition either.
        An all or nothing approach from both sides will just drive up power prices and reduce reliability in the grid.
        This policy is the first real chance at a compromise. I think all sides recognize that.

        • RobertO

          Hi Richard, Curently we are about 12-15 % RE in the network, to get to 50% will possibly take 3 to 5 years minimum and another 3 to 5 years after that to make 70 or 80%. This idea of a NEG adds 2 years to the time frames, and in the mean time makes it harder to make the Paris Accord, and batteries (and pumped Hydro) will start to come online in 1 to 5 years. On top of that you also make the RE buy contarcts for security from coal,gas and hydro pushing the price way up. (Look at what CDO were worth at the high of the money market to sellers and what they were worth to buyers shorthly after the crash). Ask a question of the RWNJ in the COALition “Why is it important that RE is kept to 26% to 28% of our energy supplies? (Craig Kelly)” Then look at Vales Point Coal power station!

          • Richard

            They will by the firming capacity from the cheapest source naturally.
            The most important thing is they have to buy it. If they don’t then the whole system will crash.
            If the 5 min rule is bought in too soon then all the coal plants will shut in a disorderly way. The grid and the economy will collapse.

            The net result will be a massive backlash against renewables and the guaranteed building of many new coal and gas generators.
            Renewable zealots need to temper their enthusiasm and allow economics , aging coal plants and the market to do the work naturally over the next ten fifteen years.

          • RobertO

            Hi Richard, I suspect that the 5 min rule will not put coal out of business. It very easy if needed to curtail either wind or solar (but not so as the coaler are makeing a mint, gaming the market or the regulator). Yes we need Finkle 3 year notice and we also have transport coming as well. Transport may prolong some coal but we should never pay capacity to coal but we may pay capacity to pump hydro as reserved capacity (must hold stated capacity more that 24 hr (keep it small payments and slightly larger amounts for 1 week storage) Pump hydro will be many sizes from small 1 MW to 2500MW and there MWHr will also vary from 6 hr to 12 hr (some may even go longer or even smaller times). Pump Hydro is there to absorb solar and wind when in excess of needs (batteries do the same)
            From what I read RE will not be a problem until it hits 50% and even then it can be managed. The problem with the NEG is that it slows to RE charge and it supports coal and the current gaming of the market. It leaves the current suppliers of Coal, Gas and Hydro in control doing what they like.
            My main concern is that if the change from Coal to RE is not planned or managed then we will have a disordley change with lots of power cuts.

            We have in this country lots of wind and solar which will eventually dominate the market. When will the last coal power station close, I do not know, it may be 10 years time, it may be 50 years, all I know is that it seems to be on the cards that it will go. I prefer sooner that later but it must be managed to our advantage.

    • Steve

      Hi Richard some comments.

      I don’t think many people on this site would disagree that storage and other forms of dispatchable power are needed for a reliable grid.

      The main criticism of the NEG is that it is not policy – it is a framework for maybe developing a policy. The devil is in the detail which is scant.

      For example, the NEG could place significant, unnecessary restrictions on power development in SA depending on what is considered ‘dispatchable’ power.

      24/7 power (“baseload power”) is not dispatchable. It is either too much or too little for our needs. The little we know about the NEG seemed to suggest coal is treated as dispatchable.

      Economic certainty is a good thing but the rules for the NEG are not due for a couple of years! It is not certainty.

      The ad hominem attackes on the moderator, and owner, of this site probably won’t help the cause.

      Have a nice day.

      • Richard

        At least this provides a chance for certainty, there was never going to be any under the Libs anyway while they remain in office. Blind Freddy can see that.
        If the states reject it, we will be back to square one. The hope then is that Labor wins under a platform of fixing it, which the Libs will reject out of hand.
        This policy provides a framework within which everyone can work, that is all it is atm. There is no reason to reject it at this point.

        This site seems to have taken an out of hand dismissal of the policy, I am merely objecting to that. There has been no attempt to see the potential positives.

        The silo mentality from this site at times doesn’t further the cause or more widely illuminate things.