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Despite those big bills, networks still most likely cause of blackouts

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Electricity outages that left tens of thousands of Victorian households without power on Sunday and Monday turned up a few interesting home truths about Australia’s national energy market.

One of those, of course, was that not many people have any sort of grasp on how the NEM (National Electricity Market) works – least of all, it seems, certain members of the federal and state LNP.

But another, much more important truth to come out of it has been that the vast majority of what Australian consumers know as “blackouts” are caused by local faults on poles and wires, and not by coal plants melting in the heat/wind not blowing/sun not shining.

RenewEconomy was reminded of this fact again this week by Craig Memery, from the not-for-profit Public Interest Advocacy Centre (PIAC), via the below Tweet.

Using the AEMC’s Reliability Frameworks Interim Report, Memery’s chart shows that a whopping 92.7 per cent of blackouts are caused by distribution (poles and wires) faults, while just 0.24 per cent (around 10 seconds a year, per household) arise from insufficient generation.

This is interesting to note for a couple of reasons. Firstly, because we now know that the cost of building and maintaining our our networks of poles and wires is the single biggest contributor to eye-water consumer power bills that are driving people to solar and battery storage at a record rate.

But of course, no amount of money sunk into poles and wires – and there has already been tens of billions – can guarantee the deliver of power in the face of bushfires, floods, cyclonic winds or equipment failures.

And it brings us to the next home truth uncovered by the weekend’s blackouts: Australian consumers are highly intolerant of losing power, despite having one of the most reliable markets in the world (even if we have paid dearly for it).

Comparatively speaking, Australia keeps its wholesale market to a reliability standard of 99.998 per cent. Most other countries, meanwhile, including the US, have reliability standards that allow for several hours of lost power each year, rather than just the few minutes permitted in Australia.

And as Memery warns, if our obsession with “reliability” – which is being whipped along nicely by both politicians and mainstream media – is not kept in check, then consumers face paying even more, for little tangible added benefit.

(Come to think of it, that is exactly what people propose to do with electric vehicles!: Ed).

As it stands, Memery adds, “you could increase (power generation outages) tenfold, and people would not notice,” he said.

“A big concern of mine, and (the PIAC), with all of these reforms directed towards improving reliability, is that if we don’t keep checking back with what the consumer is prepared to pay for, we’ll end up with a gold-plated wholesale market, on top of gold-plated distribution networks,” he told RenewEconomy on Tuesday.

And that has all sorts of other implications, as Gavin Dufty, the manager of policy and research at St Vincent de Paul Society in Victoria points out in the Tweet below.

“Even in spite of the worst of the doomsday predictions,” Memery tells RE, “we’re still nowhere near breaching (our) reliability standard.”

This, too, is an interesting fact to note, when you consider the fuss that is being made in certain political and media quarters over the reliability of electricity supply, as Australia’s ageing coal-fired power plants are closed down and replaced with decentralised, distributed renewable energy generation.

The point is, if we want to maintain the current high standard of reliability, then Australia will have to shift from its centralised model to a decentralised model, and that means encouraging more rooftop solar, more renewables, and more storage.

As AEMO’s Audrey Zibelman and AGL Energy’s Andy Vesey will both tell anyone who asks, this will mean having local generation – like solar – and battery storage scattered around the grid.

That is starting to happen to a certain extent. The new battery to be opened in a few months next to the Wattle Point wind farm in South Australia will create a sort of “mini-grid”, when the network is down elsewhere.

That means it can use the local wind farm, and the region’s rooftop solar, to guarantee supplies when access to gas and other generators elsewhere in the state is cut off.  

Pocket
  • Dee Vee

    It doesn’t take an Einstein to work out proper design is the key to reliability, not privatising the network and making profits the main criteria.

  • Chris Fraser

    The distributed model is the way to go. It holds a market appeal magic that allows many families (with access to small investments to participate), to decentralise, share, & exert some control over their energy needs and their costs. It still appears ironic to me, and amazing, that a conservative, self-absorbed, right-wing narcissistic political party can still organise it without a policy.

  • michael nolan

    The problem, as I understand in Melbourne on Sunday, was caused by a distribution system overloaded by air conditioners.
    My neighbour has a 12 kW Air Conditioner installed. I have a 1.2 kW evaporative unit installed. i.e. mine is 10% of neighbour’s. Does that mean that all electricity bills will now go up as the Network is upgraded to cater for people who install a system that is 10 times the size of mine?
    Wouldn’t it be more equitable for Residences to pay for ‘installed capacity’ instead ?

    • Brunel

      Required every new house to install a Powerwall.

      • itdoesntaddup

        Why just the new houses? Is it a lifestyle thing? But more seriously, Powerwalls are not cheap – few can truly justify them as an economic investment.

        • Brunel

          Look at the price of land – if people are required to spend more on the building (including the Powerwall), they will have less to bid up the price of land. Simple.

          • itdoesntaddup

            Making land cheaper doesn’t suddenly make a Powerwall a sensible economic choice. It only becomes a sensible economic choice if there is a large time of use premium for grid power at sundown. You can make land cheaper simply by raising interest rates.

          • Mike Shackleton

            I’d go one further, make the installation of 5kW of rooftop solar (if the rooftop allows it) a condition of property transfer.

          • Brunel

            But then people will cut down trees to have a shadeless roof.

          • Greg Hudson

            Is that a bad thing? Queenslanders cut down thousands of hectares of trees every year for ‘farming’ every year. I guess it might be OK if they were installing a PV or Wind ‘farm’, but that is not usually what happens. The old house next door to me has just been bulldozed, and so were 5 fully grown gum trees. Tree cutting is happening everywhere, so what little would be cut for solar efficiency would be minuscule IMO…

          • Greg Hudson

            Could be tricky… Most of the houses where I live are old 1950’s vintage and are being bought to knock over. So, it would be tricky to mandate a ‘condition’ where the new owner ‘must’ install solar. All NEW builds should have their own rule, but oldies would need something different. As an example, the old house next to me was bulldozed a couple of months ago, and they had no qualms about smashing straight through the 5kW of solar panels they had installed. The previous owner had spent the money on PV’s, but it was all irrelevant when he sold the block for $1.6m

          • mick

            you should have grabbed them and chucked them on your shed

          • Greg Hudson

            No shed here, and no intention of expending any effort to make my place better when it was up for sale. It was annoying seeing all the PV panels get smashed to smithereens, but they weren’t mine, so it wasn’t any of my business anyway. I did notice the demolishers walked away with the inverter though. Easy to sell I guess.

    • rob

      if you have evaporative….Then you don’t have air-con…..you have a sweat machine!

      • Greg Hudson

        That’s why they are called ‘Swampies’

      • Douglas Hynd

        Not true in Canberra – very effective in dry heat & make a difference even on rare occasions when humidity gets up

        • Greg Hudson

          From my experience, Swampies (evaporative coolers) are only marginally effective in dry heat, and will drop the temp by about 10C which on a hot 43C day means it’s still bloody hot (33C) inside. Increase the humidity to 89% like it was here in Melbourne last Sunday (28 Jan 18) and your swampie will have no cooling effect at all. There is also the energy efficiency bullshit claims of manufacturers. A few years ago, at a prior house I owned, I ran a test on my brand new evap cooler to see if it would match a claim of ‘cheaper to run than a 100 watt light globe’… And the answer was YES, their claim was correct *IF* you only had it running on speed # 1 (of 10). I pulled out my power meter and measured the current drain, and at level 1, it was only drawing 70 watts/hour (validating their claim), however, ramping up the speed to speed #10 it was chewing 1.42kWh. I took photos of each of the 10 steps just for my own interest. Based on my own research, there is no way in hell I would ever buy an evaporative cooler ever again.
          Note: the house was drawing 70 watts, so the indicated 1.49 was actually 1.42 https://uploads.disquscdn.com/images/a83b923c706413e546ffe9244eda91421862c09e8cda824ad96bcb3e45fca2dc.jpg

    • Greg Hudson

      My house was part of the problem according to your above scenario. The house is near new (13 months old) and the builder installed a 13kW reverse cycle ducted heating & cooling system as the ONLY means regulating air temp. It barely blows barely enough cool air to reduce the internal temp to 25C (on a 39C day, with 89% humidity). I had it running on and off during the day (i.e. not continuously) and not at all while we were sleeping, and STILL managed to use 50kWh (cost $14.84) in a 24 hour period. Why the Govt has not outlawed these energy sucking monsters I do not know. And, what makes it worse is no double glazing, or any heat treatment (film) on any of the N, E, or West windows (of which there are 41). And just to make things worse, the roof has been designed in such a way that it is virtually impossible to install a decent amount of solar. (see image). Lots of small triangular sections, and no large areas anywhere.
      https://uploads.disquscdn.com/images/8d22393ba5edbfff726719e8a7f6bd3105c999e0630f0d3c956e2d95b4d07845.jpg
      We are so sick of this crap hole that we have now sold it, and are downsizing to a 2 bedroom unit (with a perfect North facing roof, and no overshadowing). I’ll be glad to see the arse end of this joint, let me tell you. NOT HAPPY JAN !!!

      • Greg Hudson

        BTW, my father-in-law was an aircon engineer, and claims that ducted reverse cycle is the most efficient. After what I saw on Sunday, I’d say he’s been living under a rock. Our previous house had 3 separate inverter aircon units, only sited/used where they were needed. Main bedroom, Family/Meals/Kitchen, and my study. We never saw a day of 40C where we used over 20kWh/day.

        • Mike Shackleton

          No way, I’m a layperson and looking at the COP figures provided by manufactrers for a ducted airconditioning cassette versus a high efficiency split system the new split head units are all more efficient than those cassettes, even before you account for losses in the ducting.

      • solarguy

        Yep, Ducted systems suck and suck and suck, bigtime. Before we invested in Fujitsu splits our ducted made us feel like we were living in an energy black hole. Worst case scenario was 90kwh over 24, in 7days straight we suffered temps over 45 during the day (35 at night) and had to run the thing 24/7. We could adjust thermostat up at night, but during the day, nothing less than 20 would do, as the air flow was so piss poor, I had to frequently switch off some rooms in order to increase air flow in others.

        In comparison, with the splits, worst case is 36kwh and all powered by solar and battery and that get gets me on the grissell.

        On the government, they don’t seem to give a toss about house design or energy efficient appliances, which leads me to this question Greg. When you saw the design of your house, roof profile and the 41 windows, why the hell did you go ahead with that?

        Over the years I have tried to stop people making the same mistakes of building bad designs and going ducted air. Unfortunately most can’t be told. I call it the Lemming syndrome.

        • Greg Hudson

          ”When you saw the design of your house, roof profile and the 41 windows, why the hell did you go ahead with that?”
          Simple. My wife liked it. End of story. She hates this place almost as much as I do now though. Can’t wait for settlement in April.
          BTW, 41 windows is not the total, that figure does not include South facing, where there are another 8 just for good measure.
          Other bonuses… Black tiles on the roof (should be banned), no solar hot water heater, and the walls are made of polystyrene, many with a dark grey render. The house is one giant heat sink. On most occasions, the super heated air rises up the walls and goes straight in the windows upstairs. (My wife has a habit of leaving them open). The walls get so hot you could cook on them. IMO this house would have to be one of the worst built shit holes in Australia. It might ‘look’ nice, but that is the only thing it has going for it. (The inside on the other hand is exceptionally good).
          https://uploads.disquscdn.com/images/c87da6839e5a05d97a0a0490e67f9ea132d5749fe51c7312204f5cf59d28edca.jpg

    • Rod

      In a word yes. Those who use less, subsidise high energy users.
      One way to make this more equitable would be to remove the daily supply charges and increase the kWh price.
      PS 12kW sounds huge. However a 12kW cooling rating doesn’t mean the unit uses 12kW. Depending on the Coefficient of Performance CoP it may only use 3 or 4kW. Still a lot I know.

      • Greg Hudson

        Your figures are almost spot on for my situation. A Toshiba 13kW unit with the compressor located outside on the roof. It is 3 phase, and appears to use a maximum of 4.8kW according to my energy monitor.

        • Rod

          Do yourself a favour and look into fitting misters. Using my energy monitor I confirmed they give a 30% efficiency bonus.
          Something like coolnsave or mistbox. DIY for dirt cheap.
          http://www.coolnsave.com/

          • Greg Hudson

            Perhaps you didn’t notice. I have sold this house. Not spending a cent more on it. I will examine the link though, thanks.

          • Rod

            Sorry, I missed the fact you had sold. Good move. I wonder how many are like you and realise these monsters are more trouble and cost than they first thought.
            The misters work fine for the RC AC. They are used commercially. You can buy misters from a garden shop and DIY for a few dollars. One caveat is hard water can encrust the cooling fins after a while.
            I manually turn on a tap when I turn on the AC circuit breaker when we rarely use the ac. Your energy meter may also show how much your AC crankcase heater uses on standby. I’m a bit of a power nazi and am happy to manually manage the crankcase heater.

          • Greg Hudson

            Interesting info. The hard water issue could be solved by plumbing from a rainwater tank. I have checked out Bunnings for the misters, but could not find anything. Will have to look elsewhere. Not sure what you mean by AC crankcase. At our new smaller house, the RC AC unit would use so little on standby it isn’t worth worrying about (10 watts maybe? could even be less).

          • Rod

            You might need a specialist irrigation store for the misters.
            You might be surprised by the crankcase heater use too. Mine is 60W 24/7. Your overnight standby amount should give an indication.

  • kaydee

    telecoms have lived through this centralised (a few big honking telephony circuit switches) vs decentralised (many distributed packet routers) – guess what has proven out and now dominates?

  • solarguy

    The point is this:

    They have gold plated the network with our money, new connections, etc, but for all of that money, they couldn’t upgrade substations to cope with increasing load. In this area they have failed, because I assume they have pissed a lot of our money up against the wall and pocketed vast profits.

    Understandably you can’t get 100%, but in this area they should have done better, much better.

    Not good enough!

    • Ian

      Yes, exactly, where was the money spent with all that gold plating over the last 15 years? Was it actually spent on equipment, even if perhaps misdirected to reinforce the old centralised FF generation model or were network upgrades not even attempted?

      • mick

        id go with money blown propping up coal clunkers

        • Coley

          Hate to come across as cynical, but is there a possibility that those who serve on the boards of the FF generators also have their fingers in the pie of those contracted to maintain and construct the ‘poles and wires’?

          • mick

            yep conflict of interest declarations seem to be pretty theorectical

      • MaxG

        The thinking needs to be taken further… then you can conclude that it is fundamentally wrong to privatise a public utility or public good.
        The corporations beat the drum long enough to convince the people and the government that government is bad in doing business (which is fundamentally incorrect, because governments provide services), and that government should be kept at a minimum; happily forgetting to say “so that we can maximise profits out of monopolies”; which is exactly where we are today.
        So, unless this system is (radically) changed, no whining will correct this wrong.

      • Rod

        My guess would be much of the “gold plating” was spent on dual and triple redundancy in the wires part of the distribution grid. If someone crashes into a pole you will have a flicker but the redundancy switches over to another route.
        Substation upgrades would be very expensive and it is Russian roulette with 50 year old transformers. Repaired/replaced when they eventually fail.
        In my time at ETSA (in a non technical role) we were forced to retrofit our substation transformers with cooling as they weren’t coping with the double whammy of heatwaves and air conditioners.
        I would love to know if this recent issue might be similar.

    • phred01

      gold plated the bottom line

  • Kate

    Are we expected to pay through the nose because we expect reliability?

    Or is it that we expect reliability because we’re paying through the nose?

    • Ian

      We pay through the nose for the promise of reliability much like buying snake oil.

  • BackyardPhilosopher

    Craig has made a valid assessment, just by looking at the data.

    Energy distribution is where centralised energy systems fall over most of the time, particularly where a significant component of it is based on aerial conductors (poles and wires). A centralised distribution network will always have a high risk of failure when the weather turns bad.
    One should be aware that under the regulations in NSW, energy distributors do not include major storm events in their performance data:

    Table 4.7 (p. 21/77) of Ausgrid Network Performance Report 2015/16 includes Table 4.7 (P.21) – Excluded Interruptions for Current Year.

    It shows 8 events (14/8/15, 10/9/15, 9/12/15, 14/1/16, 29/1/16, 30/1/16 and 04/6/16) that were not included. The average number of customers affected for the 8 events was 46,582 customers, with a maximum of 81,209 and a minimum of 1,022 affected customers. Average time of disconnection was 123.5 hrs, (maximum of 451 hrs, and a minimum 17hrs).

    Whilst ever we continue to support a centralised energy grid where distribution assets get hit every severe weather event, we will continue to pay, pay, pay.

  • Brunel

    Batteries are so cheap now that batteries should be installed in substations instead of more gold plating.

    • itdoesntaddup

      Do the maths and present your workings.

  • itdoesntaddup

    There’s a need to disentangle different elements of the network to understand the various influences. Transformers at local substations are going to be there whether the power they supply comes from a honking great power station or widely scattered wind farms – the local distribution network is what came under pressure at the weekend.

    In Australia, most of the honking great (coal) power stations have been built close to the source of fuel, so as to minimise fuel transport cost (and energy consumption). It’s far cheaper to put up a high voltage transmission line to deliver bulk power to the major city consuming locations, although gas allows the alternative of building close to the cities and putting in a gas pipeline instead.

    When you replace large power stations with distributed wind farms, you need a whole bunch more wires and poles to connect them – and they have to be able to handle peak outputs. Moreover, there will be times when those wires are barely used at all, and so other wires are needed to deliver power from alternative generators, unless you site those next to the wind farms. It is a complete fallacy to assume that going for renewables results in less need for grid investment: the reverse is the case, unless you think everyone can go off grid on the basis of domestic solar and storage, which is a very costly solution indeed.

    • Coley

      Have you ever looked at a large FF power station? they have masses of pylons and wires spreading in 4/5 directions
      Now I don’t live in Australia, but I do live in an area surrounded by windfarms and guess what? not a pylon (or pole) in sight, it’s fed to the local substation by underground cables and then fed to the National grid by existing ‘above ground infrastructure’

      • itdoesntaddup

        Underground connection is about ten times the cost of poles/towers and wires. I guess your local NIMBYs insisted on no transmission lines as compensation for allowing the wind farms.

    • mick

      not so sure about that most of the new build analysis seems to mention being close to substation or at least power lines you probably make an argument for builds on dead ff sites

  • Craig Memery
    • Ian Franklin

      That may be so, but would you favour profits going to private (often overseas) interests than to state governments? And, if the political pressure is there, governments can always reduce their take of the pie.

      • Craig Memery

        Agreed, Ian… although the pressure has been there for years and no government has reduced their take yet.

    • Rod

      I agree on the gold plating. My limited experience in SA when ETSA was sold was some pretty onerous Service Level Agreements (which were meant to ensure enough linesmen were available) ended up being a bargaining chip for “gold plating”.
      However I do wonder if our rising wholesale costs (supposedly due to tight supply and/or a lack of competition) might be different with State owned utilities.

  • Phil

    There is a high chance of a “Supercell” storm in the right place and ANY STATE could lose a large portion of it’s grid with restricted power consumption for weeks while they rebuild the damaged grid.

    It’s no different to what happens now with the Telco companies. They can claim a “force majeur” and are therefore able to be exempt from any compensation or benchmarks for reliability in their contracts.

    I got sick of starting my Genset (grid loss due storms and floods) and went from 97% grid uptime in a bad year (99% normal) to 99.9999% ( with a 100% off grid system) uptime, and at less than half the cost fully funded in perpetuity. And the cost is dropping each year to maintain that perpetuity model due hardware costs dropping.

    If i can D.I.Y something better and cheaper than the experts then it makes sense to do it

  • Shaun

    This all links in to efficiency and design in reducing demand.
    Crazy to have huge glass areas receiving solar radiation and then running air con like mad. Crazy to have worsening heat island effect whist reducing tree coverage. Crazy to have black tiles on the roof.
    The urban environment and house design in Aus will have to undergo major changes. No matter what happens with RE if we get 1.5degrees and therefore 50 degree heatwaves it will be essential to introduce greater tree coverage, reflective paving nd house design that maximises natural cooling.