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How wind and solar will kill coal, sooner than Finkel suggests

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A major new survey has pointed to the inevitable decline in coal generation, as the ongoing plunge in wind and solar costs make those technologies significantly cheaper than even refurbished coal-fired generators.

The report by Bloomberg New Energy Finance comes in the middle of the debate around Australia’s energy future, prompted by the Finkel Review, and attempts by the Coalition government to find a way to prolong the life of Australia’s coal fleet.

But the BNEF analysis suggests that this will be futile and counterproductive, and more expensive. The costs of solar will continue to plunge to around $US26/MWh ($A34/MWh) by 2040, and wind will not be far off, at $US32/MWh.

bnef solar

This compares to the expected costs of $US44-47/MWh to refurbish and extend the life of coal fired generators beyond 50 years, as proposed by the Coalition under the guidance of the Finkel Review’s modelling.

It underlines a central message of the Finkel Review – that the cost of wind and solar, and battery storage, is significantly cheaper than fossil fuels, and that reducing emissions and switching from fossil fuels to renewables will also reduce costs

The BNEF analysis simply points out the difference is even greater, and the scale of cost falls even more rapid, than contemplated by Finkel.

“This year’s report shows that renewables and storage are set to transform Australia’s energy supply faster and at a lower cost than the Finkel review anticipates,” says Kobad Bhavnagri, the lead author of the report, NEO 2017 in Asia-Pacific.

“Coal’s competitive advantage is fast evaporating. It cannot compete with renewables on cost, and storage and smart management of the grid have made the need for new baseload redundant. Coal is yesterday’s technology – the only thing new coal has going for it is inertia.”

It adds to the growing assessment that the clean energy target being contemplated by the Coalition government, in light of the Finkel Review, is little more than business as usual. A new analysis from The Australia Institute suggests it will deliver less renewable energy than current state-based targets, while a Climate Council report also underlines the lack of competitiveness of coal.

BNEF sees Australian coal capacity falling by two-thirds to 2040 as renewables and storage crush the economics of the fossil fuel. This compares to the Finkel Review modelling of 25 per cent of demand being met by ageing brown and black coal generators out to 2050.

BNEF expects an influx of consumer driven storage to help meet the need for firm capacity, an element that gets scant mention in Finkel, although it was central to the CSIRO network transformation work it did in conjunction with network owners.
bnef australia behind meter
It predicts battery storage capacity will grow to at least 16GW by 2040, with 15GW installed by households and businesses behind the meter, which in turn limits the amount of new gas required and pushes coal capacity down to just 9GW by 2040.

It says that system security will come from pumped hydro, such as Snowy 2.0, batteries, some gas and demand response.

In a further deep contrast with the modelling done by Jacobs for Finkel, BNEF says that solar will outstrip wind energy installations, with large and small-scale solar reaching 72GW by 2040. Half of all capacity will be “behind the meter,” flagging a fundamental shift from centralised to distributed generation.
bnef capacity
“The analysis shows that Australia’s power sector is rapidly re-orienting from a centralised and fossil-fueled electricity grid to a highly distributed and predominantly renewable system,” BNEF says.
Although this transformation is forecast to take place based purely on economics, this does not circumvent the need for robust energy and emissions reduction policy in Australia.

“A credible, stable and durable policy regime is essential to achieving and orderly transition, facilitating the most efficient investment and keeping costs for consumers as low as possible.”

BNEF also predicts that electric vehicles will make up around 45 per cent of all new car sales and 42 per cent of the total fleet by 2040, and this will account for some 11 per cent of all demand.

The simple economics of the fall in wind and solar and its impact on fossil fuel generation will take Australia to the bottom edge of its current climate target – a 26 per cent reduction in emissions below 2005 levels by 2030.

But it says if the Paris process moves global economies closer to a 2°C pathway, Australia will need to pledge a deeper emissions reduction target than this, and actually put some policies in place.

Interestingly, BNEF puts the share of renewables at 42 per cent by 2030 – the same level as Finkel suggests with the clean energy target that elements of the Far Right are fighting within the coalition.

Renewables and storage make up 81 per cent of all new capacity additions to 2040, comprising the majority of the US$88 billion invested in new power plants.

bnef global 2017
For the global scenario, London-based analyst Seb Henbest says the “greening of the world’s electricity system is unstoppable, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including those in electric vehicles, in balancing supply and demand.”

Solar and wind dominate the future of electricity with $US7.4 trillion invested in new renewable energy plants by 2040; China and India are a $4 trillion opportunity for the energy sector; batteries and new sources of flexibility bolster reach of renewables; and homeowners’ love of solar grows.

By 2040, rooftop PV will account for as much as 24 per cent of electricity in Australia, 20 per cent in Brazil, 15 per cent in Germany, 12 per cent in Japan, and 5 per cent in the US and India. This, combined with the growth of utility-scale renewables, reduces the need for existing large-scale coal and gas plants.

NEO 2017 is the result of eight months of analysis and modelling by a 65-strong team at Bloomberg New Energy Finance. It is based purely on the announced project pipelines in each country, plus forecast economics of electricity generation and power system dynamics.

It assumes that current subsidies expire and that energy policies around the world remain on their current bearing.

  

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  • Chris Drongers

    Whhy didn’t Finkel or Butler or Frydenburg on Q&A point out the number of jobs building turbines and towers, rolling pv support scaffolding, wiring up hundreds of inverters, plug’n’playin’ battery packs and other new energy jobs rather than bland “it will be good for you eventually” virtually meaningless statement especially to a guy facing unemployment from the job he inherited from dad?

    • solarguy

      “Why”?
      Tony bloody Jones, that’s why!

      • EnGee

        I don’t fully support a subsidised renewable power industry, but if the jobs and infrastructure rebuilds regional Australia, it will be a good thing

        • Joe

          Well, you can choose to subsidise RE or continue the decades and decades of subsidising The Fossil Fuelers which are ruining the planet. It is a no brainer.

          • EnGee

            Dunno. Still need to burn coaking coal to build all the renewable plant.
            And
            Every human produces 8mg of carbon per breath, or 1kg of CO2 per day. What are we going to do about that !

          • Alastair Leith

            No actually there’s a HiSmelt process RioTinto developed that can recover the CO2 and use it in the steal. But it got defunded and shipped of to Sth Korea/China or somewhere.

          • Alastair Leith

            Get some perspective that’s what. The cattle most Australian’s want to eat produces waaaaaay more GHG emissions beacuse there’s more cattle than humans and they produce methane in large amounts which is 104x as potent a GHG as CO2 over 20 years.

          • EnGee

            You are correct. But focus is on coal. and CO2

          • Alastair Leith

            The Climate Movement — like any other perhaps — tends to over-focus on one tactical goal (closing coal, fossil fuel emissions), at times overlooking the actual goal (halt global warming; then draw GHGs down). THere’s almost a denial in the movement about just how bad land use sector emissions are, perhaps because leaders don’t think the solutions will be politically acceptable (turn the clock back to 80s when stopping fossil fuel growth was not politically acceptable, heck still isn’t in many government corridors).

          • Mark Roest

            Plant more trees, which breathe in CO2 and breathe out O2.

            Don’t need much coking coal, relatively speaking. You will be seeing some surprises that can replace steel. Like basalt, graphite, ultra-high-performance concrete, etc.

          • Gnällgubben

            The problem is the fossil coal, this adds CO2 to the planet that once was removed. The CO2 you breathe out comes from the food you eat which picked it up just before you harvested it. It’s a closed loop. Adding more coal to the loop is the problem we’re having.

        • BushAxe

          Port Augusta is a good example of a poorly managed transition with Northern coal power station closing last year, we are now seeing renewable projects such as the Bungala solar farm starting and other good prospects such as the Lincoln gap wind farm as well as pumped hydro possibilities.

      • Alastair Leith

        Jones is an unreconstructed dinosaur when it comes to Climate CHange and Renewables, same goes for most other ABC hosts, Virginia Trioli, Ticky Fullerton, those people on that ABC Sunday morning political gossip show,…

  • JoeR_AUS

    Well we are at 26mw at this moment with only 2mw renewable, what will it cost to build a wind farm that generates 24mw?

    • Tom

      I think you mean GW. mW stands for milliwatts.

      “What will it cost to build a wind farm that generates 24GW?” – recent developments have wind at around $2000/kW as capital outlay, hence multiply this by 24 million = $48 billion dollars.

      Australia wide, wind has a capacity factor of a bit over 1/3, so to generate enough electricity for the whole country from wind would cost about $140 billion in capital costs.

      Of course, although enough energy would be generated, the power will not neatly match demand, so this would necessitate both storage and demand management to be put in place. Storage would not produce any energy – actually it would consume energy, whereas demand management may consume a little bit of energy (eg, super-heating people’s hot water systems when there is a power surplus means more heat losses from the HWS), or it may save energy (remotely turning off households’ air-conditioners for a maximum of 15 minutes per day and compensating the households for this).

      Storage would cost money, and demand management technology installation and peak-shaving compensation would cost money. Nobody really knows how much because nobody really knows how much is required.

      Putting $140 billion in perspective – this is the federal tax foregone in A SINGLE YEAR from:
      – Superannuation concessions (+/-$30 billion)
      – Negative gearing and CGT concessions (+/-$20 billion)
      – Religious institution tax exemptions (+/-$30 billion)
      – Absence of the resources super profits tax (+/-$10 billion)
      – Multinational tax avoidance (+/-$30 billion)
      – Private health insurance rebates (+/-$10 billion)
      – Diesel fuel excise rebate (+/-$10 billion).

      • EnGee

        $140 billion to build. What about running costs, maintenance, replacement, disasters, network connections for this new very large grid….nobody knows what the costs are.

        • Peter F

          We do actually know what the running costs are about $12-15 for wind and about half that for solar. If the new grid is slightly overbuilt and widely distributed (like roads are now) the transmission losses will be significantly reduced.
          Overall the system with adequate storage will cost about $160-190b to build at current prices. If the investment is spread over 15 years and costs keep falling as expected , the cost will be $150-160b.
          To replace all the coal and gas that will be retired over the next 15 years will cost around $110b.
          However annual costs are interest, depreciation, operation and maintenance and fuel For the coal/gas system they are respectively $8b finance, $3b O&M, $10b fuel i.e. $21b per annum.
          For the renewable system with gas backup $13b, $1.2b, $1.5b = $16b. Thus the total cost for a 90% renewable system will be around $25-30% less than replacing the current generators like for like. This does not including the effects of any carbon price, health, water and local environmental costs of coal

          • David leitch

            Think your running costs for wind in A$ are too low

        • DJR96

          OK, so how does $2-3 billion sound if I said that could solve the whole security/stability issue and allow any mix of generation into the future?

      • Robin_Harrison

        Minus the replacement cost of fossil fuel generation infrastructure which doesn’t have an indefinite lifespan and is already more expensive than RE and soon RE+storage.

        • Alastair Leith

          And fuel!

      • Mark Roest

        Wind will probably fall to $1.40 per Watt by 2020, and some more breakthroughs will probably take it to $1 per watt — at least USD.
        Speaking of which, I noticed the conversion rate above — weren’t the currencies much closer together, before the gold-plating exercises? After all, exchange rate pretty much tracks economic efficiency, I think.

      • Peter Campbell

        $50 billion for a dozen submarines. I’d rather a third of our energy demand instead.

        • Tom

          Hi Peter – good point – I was thinking of putting it that way myself, but I thought I’d find $140 billion pa of recurrent tax expenditure that many people would think is not completely necessary, and may even consider wasteful. It wasn’t too hard to find.

          I’m not suggesting that the federal government completely wipes out all of the things I suggested above. But if they did so with a stroke of a pen, then the world’s hardly going to fall in, is it? It’s not like it’s wiping out the health system, education system, defence forces or the social security safety net. And the federal government would have an extra $6000pa for every man, woman, and child in Australia to make our world a better place.

          • Peter Campbell

            Agreed. The government spends plenty (or foregoes income) on things less essential. Millions and billions sound like lots so you need comparisons such as you gave to get a feel for scale.

  • Tom

    The difficulty with all the storage options is: When do they buy power to recharge?

    If the batteries are empty and the upstream hydro storages are empty because they were waiting for the “cheap power” before they recharged, but the power never quite got as cheap as they thought it would, then there is not enough storage.

    Last year things were pretty simple – most nights the wholesale price of power would be in the $20s or $30s or $40s for at least 5-6 hours. But this year everything has gone crazy for the arbitrage managers – sometimes the average “peak” price is cheaper than the average “daily” price!

    I envisage that at some stage wind/PV capacity will be greater than a region’s total power demand at certain points in time (SA already has this situation, but can sell surplus to Victoria). When there is a renewable power surplus, perhaps this will massively depress the wholesale prices in an entire region while the surplus is present, and then everyone with storage (domestic scale or industrial scale) will know to recharge. We are a little way from that yet, and it may not pan out like that – I don’t know.

    The point is – you can have as much storage as you want, but if we neglect to recharge them when we retrospectively should have, then they won’t be much good.

    • Jon

      I wonder if the presumption is that with many people having their own PV, that many will be able to recharge their batteries independently.

      For those without PV, your point about the renewable power surplus fits nicely. Also worth noting is that those who recharge during off peak will also enjoy the added benefit of downward pressure on demand/prices as a consequence of other households’ PV firing up.

    • Mark Roest

      That’s why energy management system companies are incorporating analytics for both consumption and renewable energy production.

    • Alastair Leith

      That’s why we model this stuff! To see what the sensitivities and limitations are. Turns out that some years there’s too little wind and sun in winter to get to 100% RE all year round without massive (uneconomic) overbuild of generation and/or storage. So perhaps biogas and/or biomass can cover for two weeks of a wind drought. NEM is pretty extensive geographically (which means usually somewhere is producing) but it’s also an issue of moving all that energy on moment to moment basis from one side of the country to the other, even with thin pipes and storage it’s enormous quantities of energy that area normally provided by significantly distributed generation (even though still centralised in coal regions up and down the east coast).

    • Gnällgubben

      The marginal cost of solar and wind electricity is very close to zero, what sets the price of RE is paying off the installation. Therefore you want to generate as much power as you can, there is no waiting for cheap power. Every kWh generated is the cheapest possible.

      • Tom

        It’s not quite going to work that simply.

        If in the future the wholesale price of power was $5/MWh for most of the time (compared with $97/MWh this instant in Tassie), then nobody is going to get their money back for building anything so nothing will be built. Even thought the MCOP is likely to be less than $5/MWh, I don’t think the normal wholesale price will settle this low.

        Outside of times when RE generation is greater than demand (an there will always be some calm nights, no matter how much generation capacity we have), the price will be set by the dispatchable “generators”, whether batteries, pumped hydro, molten salt, etc.

        These do not actually generate any new energy – in fact they consume energy – the only way that they can make money is to sell energy at a higher price than what they buy it for.

        So of course – they’re going to try to “fill up their tanks” when energy is at its cheapest, and then sell it when it is at its most expensive. They would hate to fill up at $30/MWh only to find that as soon as they are full the wholesale price falls to $10/MWh for the next 4 hours.

        The problem is if the wholesale price doesn’t get as cheap as they think it will during the time of abundant power for them to “fill up their tanks”, then they won’t have enough energy to sell, no matter how high the price gets.

        • Gnällgubben

          I expect that in particular batteries will be paired with generators and there will be plenty of situations where generation is greated than demand due to RE being cheap and the need to cover peaks. There will probably be quite a bit of over-build of RE.
          Buying power from the market to fill batteries is probably not going to be very common, at least not for bulk storage. Pumped storage is already today used as a dispatchable load at night when demand is too low.
          To price the battery electricity there will probably be a model where the sell price is higher the closer the battery is to empty.

        • Ren Stimpy

          If in the future the wholesale price of power was $5/MWh for most of the time (compared with $97/MWh this instant in Tassie), then nobody is going to get their money back for building anything so nothing will be built.

          Supply and demand. When the wholesale price of power is that low, it will just be an indication that not much new power will be needed to be built for the wholesale market. Probably because demand for wholesale power will be that low because most entities have bypassed the wholesale market by having most of their own power supply (generation with storage) located within their own premises.

        • Greg Hudson

          -Tom: ‘They would hate to fill up at $30/MWh only to find that as soon as they are full the wholesale price falls to $10/MWh for the next 4 hours.’
          G’Day Tom. The above scenario is unlikely, as the NEM already has the ‘future’ price calculated, and displayed online. See:
          http://aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard
          However, not all is as it seems… The ‘future’ price is continuously updated in real time (I assume because of price bids) and the ‘actual’ future price is not displayed after the fact, so you cannot see how accurate the projected figures were in the past.

        • Calamity_Jean

          “They would hate to fill up at $30/MWh only to find that as soon as they are full the wholesale price falls to $10/MWh for the next 4 hours.

          The problem is if the wholesale price doesn’t get as cheap as they think it will during the time of abundant power for them to “fill up their tanks”, then they won’t have enough energy to sell when it’s dark and calm, no matter how high the price gets.”

          I can’t see that happening. From a RE point of view, the future is not a complete mystery; the sun rises predictably and weather forecasts tell approximately how cloudy it’s going to be. Wind farm output is predicted to within 10% of actual production up to 24 hours in advance. I’m sure a “battery farm” or pumped storage operator will get predictions of what his/her surrounding wind or solar output is likely to be. A change in price from $30 to $10 per MWh (or vice versa) isn’t going to catch a professional by surprise.

          • Tom

            @ Calamity_Jean,

            Your idealism is inspiring, but I’ve been watching Hydro Tasmania stuff up their arbitrage for years, both on an intra-day and a seasonal level, and as far as energy storage goes, it doesn’t get any bigger than the Hydro.

            On an intra-day level, even just the other day, Tassie was importing at $100/MWh in the morning and then exporting at $85/MWh in the evening.

            And on a seasonal level (which will not be relevant for batteries as their storage is so much less), last spring we were “energy neutral” for a couple of months at about $20/MWh when we should have been importing flat-out, hence we were unable to export as much at $100+/MWh this autumn because we’d already used it.

            The point is – whether batteries are connected to a solar/ wind power station or whether they are stand-alone, either way the only way they make money is through arbitrage, and so people will use “modelling” to try to maximise their arbitrage revenue. But arbitrage can be tricky to manage, and modelling can predict incorrectly.

            I wouldn’t have quite as much faith in the “professionals” as you do.

          • Calamity_Jean

            “…I’ve been watching Hydro Tasmania stuff up their arbitrage for years….”

            My, that’s pathetic. I’d think they would learn after the first few times.

  • DJR96

    “….Coal is yesterday’s technology – the only thing new coal has going for it is inertia.”

    And even the whole concept of ‘inertia’ can become redundant and obsolete.

    • Chris

      The ‘solution’ of adding rotating generators to fix the ‘problem’ of inertia and frequency control is actually back to front.

      Rotating generators are not ‘synchronous’, and cannot be if there is a problem of lack of inertia and frequency control. The problem is caused by rotating generators because they are not synchronous. If they were synchronous then there would not be a problem. In reality when a change of load is presented to a rotating generator is decreases (or increases) it’s rotational velocity. If the frequency (or of more relevance, phase) changes too much with respect to the rest of the network then it must be disconnected to protect it from damage.

      The amount of physical inertia available is extremely modest – a matter of seconds – far too little for rotating generators to respond.

      In a post rotating generator world all inverters would simply be locked to an externally defined frequency. There would be no change of frequency as load changes. As load and therefore voltage changes the inverters would respond to adjust the power delivered to maintain the desired voltage.

      Until we have transitioned to such a world, standalone battery systems will provide the instantly dispatchable missing from rotating generators that are today unable to handle large transient load changes.

      • DJR96

        You are on to it!
        Incredible how few people understand this.

        • EnGee

          In Souh Australia we have small gas turbines which power up rapidly to supply ‘off peak’ hot water. How many minutes does it take for these to feed into grid?

          • DJR96

            Gas turbines can start producing power after about 5 minutes, full load in about 10-15 minutes. In conventional generation terms that is quick.
            But inverters with battery storage will do that in fractions of a second.

          • EnGee

            I thought they were quicker than what the article above implied for ‘rotating inertia’ stuff. Thanks

          • DJR96

            Once something spinning is online, their kinetic energy is there to resist a variation in frequency. Which is only of use when the frequency actual varies relatively suddenly. And if it does, that kinetic energy can provide quite a bit of extra energy for a few seconds. But that is all.
            And gas turbine spinning doesn’t have all that much kinetic energy in comparison to a big old fashioned steam turbine that is much heavier. So despite any new fossil fuel powered generation that may be built, they won’t add all that much “inertia” to the system. And it is those old coal fired units that will be displaced from the market first. So the “inertia problem” is only going to get worse until they finally recognise the same solution I have been advocating. But as we know, these incumbents dinosaurs are pretty slow to learn new tricks…..

      • Peter F

        Largely correct and definitely the future but only if there is sufficient power behind the inverters to respond. No magic bullets yet

        • DJR96

          The power behind the inverters being the battery capacity. Thing is, it doesn’t need to be much. It only really has to carry the change in load for long enough for the bigger cumbersome generators to ramp up or down. And if that means a gas turbine has to come online, then even that is 10-15 minutes. So not much in the scheme of things, but makes a huge difference in making it easier to manage the network.

          • Peter F

            Agreed. In fact a storage system with 20 secs of supercaps/asynchronous flywheels, 1-4 hours of batteries for 20-30% of the load would give you all the FCAS services you need and therefore constant frequency as you say.
            Add 20 hours grid controllable power to heat, pumped hydro behind the meter batteries or whatever would not only capture a lot of renewables but they would allow gas and any residual coal plants to run either at peak efficiency or not at all, further reducing carbon intensity

          • Alastair Leith

            But the elegance of a market driven solution means this is almost impossible to achieve ATM. Massive reforms needed and needed fast. I don’t envy Finkel and the poison chalice he was offered, but I can’t see that’s he’s moved us a long way forward and the report was particularly lacking in foresight and vision, even if it did identify many existing problems. Handing it back to AEMC, AEMO and AER to fix is questionable at best.

          • David leitch

            Hear hear. That comment is so on the money

          • DJR96

            Exactly my thoughts too.

          • DJR96

            You’re on to it too. Well done.
            I’m thinking just 30 minutes of battery for 20-30% of total capacity would be easily enough. That is essentially what must be kept as reserve capacity for contingency events now.

        • Alastair Leith

          Don’t forget modern wind turbines can provide inertia and primary response and actually make a grid *more* resilient to outages and demand/generation mismatch than a fossil only grid. As shown in several research papers modelling existing grids around the world. And as coal plant C.F.s drop thanks to overcapacity and the merit order effect there’s been a decline in inertia anyhow.

          Good paper and PPT here from Nick Miller of GE:
          https://www.dropbox.com/s/wd1flzuml37alzu/GE%20Impact%20of%20Frequency%20Responsive%20Wind%20Plant%20Controls%20Pres%20and%20Paper%20%28Miller%29.pdf?dl=0

          • DJR96

            Whilst wind turbines can provide some assistance with an “inertia boost” it is not sustainable and like any mechanical inertia it requires a period of time to recover during which it has reduced output.
            Whereas batteries can provide that extra power (much more) and sustain it for as long as the battery has available capacity.

          • Alastair Leith

            Yes but is it useful, turns out very useful. Please read the link.

          • DJR96

            I’m not saying the “inertia boost” assistance from wind turbines in not useful. But it is quite limited and ultimately not the solution to the underlying problem.
            That being the fact that frequency is a variable at all. If frequency didn’t vary at all, complete fixed and constant, the whole concept of inertia and frequency control techniques becomes redundant and obsolete.
            And it would be if we got on with building decent capacity of inverters and battery storage which could hold frequency constant. That’s the solution to a multitude of problems.

          • Alastair Leith

            please see my comment about inertia and stage-coaches above. 😉

            It all comes down to costs, we can engineer solutions in a multitude of ways, but the ‘trilemma’ remains and costs is a significant part of that. No doubt battery storage will be coming down in cost a long way over next decade and I’ve been strong on chemical battery storage to cover for a multitude of gaps in the system at many levels for about five years now. (Bring on graphene supercapacitors) 🙂

          • Ian

            Why have a backend power source like wind, solar or batteries to allow an inverter to provide “synthetic inertia” for frequency or voltage regulation? The device can draw current from the grid it is trying to stabilise to power its output.

        • Chris

          Agreed, Peter, I am talking about the future – which is very easy to do from the comfort of my armchair. My point would be that we must look to the future and plan a route to take to get there.

          With regard to inverters, it is unlikely that the surge capacity of inverters will ever be as capable as a lump of copper embedded in a lump of steel. But in a sense, this is merely a matter of sizing.

          • DJR96

            Re: Surge capacity. Perhaps the solution there is to question why fault currents need to be so high to start with. Is there too greater headroom over loads? Are circuit breakers oversized? What if CB’s could be dynamically rated such that they only trip when there is a sudden jump in current regardless of the load beforehand? A monitoring system could be implemented that only allowed a say 10% jump in current. That would solve that issue for inverters – if indeed it is an issue.

      • Chris Fraser

        Indeed, inverters should locked onto an externally defined frequency. Perhaps even one of several defining frequency setters, if parts of the network are taken down by storms.We can send this information along the same energy conduit as the energy, but independent of the energy. What were your thoughts about how this definition is created ?

        • Chris

          My armchair view of the future is one where there are DC interconnected AC islands with each island in charge of it’s own frequency. The idea of maintaining dynamic stability of a single AC network over the length and breadth of Australia seems ludicrous to me. However, in this day and age, there is no impediment to having all systems, and devices within them, locked to a single definition of time and thus frequency – easily achieved in a modern communications network. A communications node can easily maintain a good enough sense of time for a reasonable period of time during loss of communications from a network time source.

          • Alastair Leith

            Atomic clocks 🙂

          • EnGee

            Solar clocks?

        • DJR96

          It is a technical issue. But I do have something in mind but not willing to share for a little bit yet. There is a viable means of doing this accurately and reliably.

          Using HVDC inter-connectors makes sense, but it would be pretty expensive to convert what we have. Money that ought to go into a real solution.

        • Alastair Leith

          You can already send 1000Mbps ethernet over live 240VAC conduit behind the meter. I’m sure there’s be something that could be done.

    • Robin_Harrison

      However a relatively short term characteristic of the ‘inertia’ is enough wealth to buy a lot of politicians and scientists. But it won’t help them.

    • Alastair Leith

      It’s all about power balancing right? Maintaining voltage, frequency and phase of the power with ever shifting demand at various demand centres.

      Saying it’s all about inertia is like saying the postal service is all about Cobb & Co stage coaches, sure once apon a time it was but no longer.

      • Ian

        Hard to understand how frequency, voltage and current are related when electronics can change any of these parameters at a whim. The best thought experiment I can think up is this. How would a large DC circuit behave with many energy inputs and loads? The voltage would have to fluctuate.How would the same circuit behave if the voltage is fixed regardless of load? The current would have to fluctuate. To a single tiny inverter on a massive grid, it would not matter whether it exported nothing or maximum energy. It would have a set voltage and just deliver all its current at whatever rate it can – much like a small tap into a large reservoir.

  • Alastair Leith

    “But it says if the Paris process moves global economies closer to a 2°C pathway, Australia will need to pledge a deeper emissions reduction target than this, and actually put some policies in place.”

    This central fact ignored by #finkel and most of the commentary around the finkel review means coal and gas need to die a quick, painless death (and workers transitioned into new RE industries or regional economic activity leveraging our world leading renewable resources).

    • solarguy

      I agree with your comments Alistair. Finkel is correct on an orderly transition of coal plant closures. And the more I think of it, the best time effective way to do this, would be to make a short list of the oldest plants and or the ones that need the most expensive maintenance, to be told to prepare to wind up, after sourcing replacement RE investment that will be ready to build immediately. This should be timed for new plant to be completed before the scheduled expiry date of the old plant. More than one could be chosen to go at the same time, as it seems there is plenty of RE investment. All that remains is retraining to coincide with the schedule and competent people in control.
      All coal and fossil gas should be gone by 2030, or sooner if there is an effective plan. That will be the hard part.

  • Les Johnston

    There is considerable opportunity for a change to be made to the current “off-peak” network. Changes to the arbitrary “off-peak” system would overnight (almost) shift demand around and could lead to any daytime surplus generation capacity being injected to heating water in those off-peak systems. The 6/8c/kWh off-peak charge is purely a system to enable fossil generators to continue to operate.

    • EnGee

      in South Australia, historically the demand for off peak power was so great the power company had small gas turbine power stations dotted around the state to power this demand. And I presumed they did not lose any money…

    • daw

      Not so Les The Off peak concept has been around for decades ( long before all the current nonsense began). The concept was to shift load that didn’t need to be on during peak periods to ‘off peak’ periods which were most pronounced in the early hours of the morning (from about 1a.m. to about 4 or 4.30 a.m.) and thus limit the maximum demand of the system which then meant that not as much generating capacity was needed. Power could be sold cheaply in this period because it couldn’t be switched on during the peak. It is still relevant today but much harder to predict.

  • Peter

    “the only thing new coal has going for it is inertia” – I don’t think the pun was intended, but government inertia could interfere with what has to be done, which is to refurbish the energy system so that things continue to work. On the one hand, trying to preserve the dominion of coal in Australia will obstruct the transition; on the other, we cannot simply replace coal and gas by fiat.

    It takes time to make such transitions. History tells us that major technology transitions take about 50 years (I won’t vouch for the exact dates) – wood to coal; coal to oil (1900-1950); electricity generation and distribution (1890-1950); solid-state physics to personal computer (1935-1981). Fortunately, PV has been around for at least 30 years. It is also one reason why “clean coal” is still 50 years off, because nothing significant has been achieved beyond a few demonstrations. I think that one reason it takes such a length of time is that many elements have to be developed and deployed.

  • phred01

    If the incumbents keep up pushing massive price increases for grid power. This will make solar more attractive proposition. As soon as battery storage becomes cheap there will be blood letting in the electric generating industry

    • DJR96

      Absolutely right. Which is all the more reason for the NEM industry to take up batteries and make them part of the solution instead/first.

    • Miles Harding

      They may have just done it with Origin promising its customers a 20% price hike from July 1,

      Previous to this, battery + solar was close, so this may have pushed batteries over the hurdle. Add this some environmental concern and the dreaded death spiral may be here.

    • Peter Campbell

      “As soon as battery storage becomes cheap there will be blood letting in the electric generating industry”
      At the domestic level, I think many of those thinking to go off grid with battery and solar will be back as soon as they get an electric car and ditch the gas grid. A domestic PV system might do for an efficient suburban house but not the car as well in the middle of a grey week in winter.

      • Ian

        Why does everyone assume the majority of EVs will be parked at home in the day? Most people that work, work in the day, they commute using their cars. That is where the majority of the world’s liquid fuel is wasted -getting people to and from work – why should this be any different once EVs become the predominant form of personal passenger vehicle.

        • Peter Campbell

          I don’t assume the car will be parked at home during the day. Certainly our pattern as EV drivers of over 8 years has been that they spent their days in a car park at our work places and charging on a week day happened for some hours from late in the evening just before we go to bed until the car is fully charged sometime in the early hours of the morning. On weekends it would often get top ups between trips during the day. Newer EVs tend to have charging timing built in so, for example, they can be set to calculate when to start some time after midnight so they will be full for the next day and end charging just before the morning peak demand time.
          I have retired so I tend to charge at home after trips during the day but my wife is working so her charging is still overnight.
          If batteries get cheap enough, home PV may be charging stationary batteries all day then those batteries charge the EV batteries at night with whatever charge is left over after running the house through the evening peak.

          • daw

            What renewable energy are you using to charge your car at night Peter? Certainly not solar maybe wind sometimes!

          • Peter Campbell

            “What renewable energy are you using to charge your car at night Peter? Certainly not solar maybe wind sometimes!”

            Well, not quite so ‘certainly not solar’ and yes, certainly, to wind a lot of the time.

            There are several considerations.
            1) Even on a very coal-heavy grid, an EV has lower emissions than an equivalent non-electric vehicle when all is considered: ‘transmission losses’ shipping petrol around countryside and the globe, electricity used by the petrol refinery, fuel in the coal mine and so on.
            2) Yes, my car gets solar indirectly. I have PV on the roof of my house. I have purchased and retired as many RECs as were created by my roof top PV so its output is additional to targets. As it happens, my modest PV system puts about the same into the grid as I take out to run the EVs. My PV looks like reduced daytime demand and balances the extra demand I add at night. To the extent that my PV puts electricity into the grid by day, a corresponding amount of water can stay uphill in the Snowy Hydro scheme so more can be let out at night (or a correspondingly lower amount of coal is burned). In effect that solar generation is stored because more of the Snowy’s total output can be kept for night-time generation.
            3) I am in the ACT which has a 100% renewable electricity target for 2020. That scheme includes distributed wind which is often blowing in NSW when not in SA and Vic or vice-versa, and the ACT scheme also includes some storage. You can read about it on this site.

          • Miles Harding

            A couple of thoughts;
            If the car only drives 30 to 50 km, the amount of energy is not very great, so could be buffered via a morerate sized battery or
            if the second car is also electric (doubtless, the day will come) it can be left to charge during the day by swapping cars a few times per week.

        • Gnällgubben

          If “autonomous” works out we are going to see a major shift in car ownership. By 2040 it will not make financial sense to own your own car, it will be so cheap and easy to just order a car for your needs at any time.

      • EnGee

        it all comes down to cost. I have been installing LED lighting and reducing heating and cooling requirements at home. I have also reduced my fuel consumption by 40% in my new car, and my next car will try to do the same.
        But I still have not invested in off grid power. Economically it is too risky, with the lifetime and cost of replacement batteries, call-out fees to service inverters, solar cells and the like. I have visited a solar panel installer for work, and in the background I could hear the receptionist answering calls. I was amazed at the constant phone calls for warranty claims and service calls. If these people were off grid, they would be without power altogether. I will wait until the industry matures a bit more. EVs are okay, but with the constant increase in electricity, what will it cost to charge c.v. petrol ? And if petrol in Australia was not taxed, the economics would be a no brainer. Similarly with power and gas, I am sure governments get a dividend payment from these utilities. Making them less economical.The government, market and media is so distorted and biased against everything, no-one wants to invest either way. China burns over 3,000,000,000 tons of coal per annum. i.e. 10 million tons of coal per day. And I should be guilty of burning a few kgs….

        • Peter Campbell

          I don’t have any burning desire to be off-grid in the suburbs. We have an electricity grid as a consequence of being a complex society that can pool resources to provide stuff for us all like an electricity grid, reticulated clean water, roads, hospitals, etc. I have no plan to do DIY medicine even though I might do a bit better than most having a PhD in biochemistry!
          Electricity would have to get a lot more expensive to cost as much as petrol and I do enjoy that this is about the only thing with a carbon tax on it still.
          Being in the ACT which is on its way to 100% renewable electricity by 2020, an EV rather than a petrol car was the next step after a lot of home efficiency improvements that would reduce my greenhouse gas emissions. However, it didn’t do it just on a matter of principle that I should do what I could. Just like insulating the house, an EV saves us running costs. However, more important for me was that I can advocate more effectively for reducing transport emissions when I am able to preface comments with ‘Having been driving an electric car for over 8 years now …’

          • EnGee

            I agree. I am reducing my energy consumption whenever possible. And you are correct and wise Peter. All this home battery and other investments will be a stop gap to future centralised wind renewable energy.

    • daw

      Don’t hold your breath waiting for economic battery storage phred01. The technology for the required energy density of battery storage materials hasn’t been discovered yet

  • Gnällgubben

    I don’t see why there would be ANY coal in 2040. Renewables and storage will be so cheap that it won’t even make financial sense to run relatively newly built power stations. With 2 cent/kWh for solar and 4 cent/kWh for storage, why would anyone want 15+ cent/kWh coal?

    • Alastair Leith

      Cabinet MPs all look at their shoes, oh Barnaby spots a possum in the tree outside, “possum!!” he shouts. Forward contracts (take or pay) is one issue though. Some silly state governments may have signed some silly coal and gas contracts in recent years behind the cover of commercial-in-confidence.

    • Greg Hudson

      You won’t be able to buy 15c coal anyway. The prices will continue to rise way beyond the 33c I have been paying already.

    • Waz

      “why would anyone want 15+ cent/kWh coal?”
      Because we (the market) will still need base load generation. It’s either coal or nuclear. And I can’t see us building nukes. Unless a form of renewable base load is invented (thinking caps on people!) then we’re stuck with it.

      • Gnällgubben

        Not at all. Storage is the final piece to bridge renewables with 24/7 electricity. Storage will be cheaper than coal in 2040. There will only be solar, wind and hydro plus storage. If anything fossil at all there will be a few emergency gas or oil peakers, at least for a while.

        • Waz

          I really hope so, but the cost will still be high (network costs). Households aren’t such an issue. What about industry? Shopping malls? Smelters, factories, farms? I can’t see how farmer Joe can install 500kw of solar & storage to run his pumps.

          • Gnällgubben

            Farmer Joe is already doing that

          • Peter Campbell

            Shopping malls have big unshaded flat roofs and plant rooms for batteries. More solar over the carpark provides welcome shade for the cars.

        • EnGee

          It may not be. Local shires/councils in South Australia re looking at every windmill and solar panel as a rate-able asset. The state govt levies a cost on every kWh to subsidise solar. Backup/network stability batteries will add to the cost. They key is to use less energy. The top selling vehicles in Australia are HiLux and Ranger. This means the public does not really care about emissions.

      • daw

        Waz Think Hot Fractured Rock Geothermal It has basically been canned even though it proved itself by running a 1MW pilot plant continuously for 90 days without a hiccup.
        Why was it canned? basically economics with the price crash of coal and whingeing by the solar and wind lobbies.

    • EnGee

      coking coal, feedstock for chemicals, to make bitumen, carbon black etc
      Nothing is simple, my aim is to teach this.

      • Gnällgubben

        Ok, I meant coal for electricity generation since that is what the article is about. Of course coal will still be used for other purposes.

        • EnGee

          Yes coal is okay for everything except power generation ?

          • Gnällgubben

            Coal is used in some materials processing, for example steel making. That is not a huge issue in my opinion although I’m not against finding alternatives of course. The coal used in this processing is miniscule compared to electricity generation.

  • Cooma Doug

    Great article.

  • eric noack

    Trouble is at the moment you have to use the grid even if you install batteries because most installation of batteries are too small in capacity to carry a consumer for 3 days without sun.
    leads me to another question.
    Why hasn’t someone invented a wind turbine for home use ?
    Seems to me instead of battery storage having to be large and expensive it may well be that during the night a wind turbine might actually carry the capacity needed.
    Has anyone ever done a study on this ??

    • Peter Campbell

      “Why hasn’t someone invented a wind turbine for home use ?”
      They do exist but more expensive than PV. Usually run inefficiently due to turbulence around houses and trees etc. More risk of objections from neighbours in the suburbs. Actually, once you get more domestic battery storage, perhaps everyone should have an exercise bike hooked up to a generator too.

      • Greg Hudson

        Also, there are many councils with blanket bans on small wind turbines on houses. Call your local council and ask them.

  • John Gray

    Seems to me our govt is not really serious about supporting renewables, and that the economics has already outstripped their philosophical support of fossils. Renewable energy is already the best option, their earlier objections to the stability of the supply have already been addressed in other markets. Regardless of any subsidies for renewables the growth in that sector is increasing. Turnbull’s puppet masters need to accept the facts – they should sell their their shares

  • Robert Comerford

    Until this lot go I doubt the real cost savings will alter their fossil fuel philosophy. If people keep voting to stuff the planet because they care not about their descendant’s futures only about what dollars they have been promised they will save today then new coal fired power stations will soon be rolling out.

  • Peter F

    BNEF is a pessimist, paticularly in Australia’s case. Every forecast they have made for renewables volume has bèen low and every forecast for pricee has been high.
    An existing coal plant that has to pay export parrity price for fuel is looking at a breakeven of $85–95. Wind from Snowy Hydro backed up by existing hydro is less than $65-75.
    Half the existing annual coal generation will be lost in 10 years