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New Finkel report finds no need to panic about energy storage

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finekl storage two

A new report into energy storage commissioned by chief scientist Alan Finkel highlights the enormous opportunities for storage in Australia, but underlines how little is actually needed over the short to medium term, even at relatively high levels of wind and solar.

The report, The role of Energy Storage in Australia’s Future Energy Supply Mix, funded by Finkel’s office and the Australian Council of Learned Academies (ACOLA), says the required investment in energy security and reliability over the next five-10 years will be minimal (see graph above), even if wind and solar deployment moves far beyond levels contemplated by the Energy Security Board.

The contrast with the ESB modelling – and the attempts by Coalition parties at state and federal level to dismiss high levels of renewable energy as “reckless” – could not be more pronounced.

While the ESB, in arguing for a National Energy Guarantee, speaks of the system threats and urgency to act with a level of “variable” renewables accounting for between 18 and 24 per cent of total generation, this new report says surprisingly little storage may be needed with 35 per cent to 50 per cent wind and solar.

Even in the 50 per cent variable renewable energy scenario – more than double that contemplated at the high end by the ESB – the new report suggests enough battery storage may be available “behind the meter,” households and businesses, to meet the storage needs.

“The modelling provides reassurance that both reliability and security requirements may be met with readily available technologies,” it says.

“Nationally and regionally, the electricity system can reach penetrations of renewable energy close to 50 per cent without significant requirements for energy reliability storage.

“Reliability problems, such as those that recently occurred in South Australia and New South Wales, can be responded to quickly and effectively with appropriate storage.”

In one of the most detailed reports into energy storage, the authors point to the huge potential of battery and energy storage in Australia – both in core mineral resources, manufacturing of battery storage, R&D,  deployment, and even renewable hydrogen.

At the same time, the report also warns that Australia needs to develop a recycling strategy for battery storage, and also needs to take into account other social aspects, such as the origins of lithium and cobalt.

But the most striking part of the report is the apparent contrast to the “doomsday” scenarios about renewable energy peddled by the Coalition, and the fossil fuel industry, and reflected in some of the assumption in the proposed National Energy Guarantee.

Yes, the report says, sensible policies are needed to provide a market signal, and the opportunities are boundless. But it does not suggest that wind and solar farms should be penalised for not having storage, or should be made to appear or act like coal-fired power stations.

Indeed, it says the total storage requirement for Australia to meet even a 50 per cent share of variable renewable energy – wind and solar – would be a fraction of the annual spend required of the grid.

finkel storage one

This graph illustrates the cost of meeting security and reliability needs for 50 per cent wind and solar – just $10.7 billion in batteries alone. And most of these could be installed behind the meter.

“These numbers are not so huge that we have to go gasp, at least compared to what we are spending anyway on networks,” lead author Professor Bruce Godfrey said.

In fact, spending on storage could actually defray the required spending on poles and wires – possibilities that are beginning to emerge with the creation of micro-grids, and support for new solar investments to help ageing grids cope with rising peak demand.

Pointedly, the study models levels of “variable”renewable energy – wind and solar” that are far higher than that contemplated by the ESB in its argument for an “urgent” reliability option.

The new study’s “low renewable” share – 35 per cent – is twice the amount of wind and solar modeled by the ESB for 2030, at just 18-24 per cent, and yet it sees little need for a lot of added storage.

The study’s medium renewables scenario aims at 50 per cent share of variable renewbles by 2030, while its “high” share models 75 per cent wind and solar penetration.

It even contemplates what is needed for a 100 per cent renewable energy in South Australia – a scenario that looks increasingly possible given the huge range of projects in the pipeline, many with storage of some sort, including pumped hydro, solar thermal, and batteries.

The underlying principle is that for up to 50 per cent renewable share, not that much storage is needed – although this increases rapidly as the share of variable renewables goes beyond that level.

“At an aggregated national level5, Australia can reach penetrations of 50 per cent renewable energy without a significant requirement for storage to support energy reliability,” it says.

In this sense it fits in with the scenarios painted by the CSIRO and Energy Networks Australia in their energy transformation roadmap last year, but the contrast with the assumptions made by the ESB is stark.

“Energy storage is both a technically feasible and an economically viable approach to responding to Australia’s energy security and reliability needs to 2030, even with a high renewables generation scenario,” it says.

It models storage on two services: system security, which is the fast acting response to network faults; and reliability, which is providing enough energy when it is needed.

“In the LOW RE and MID RE scenarios – 35 per cent wind and solar and 50 per cent wind and solar – consumer storage would theoretically be sufficient to provide the entire energy reliability requirement,” it says, although the challenge here might be in “aggregating” these resources.

“The reliability requirement in these two scenarios is small, respectively requiring 1.5 and 5.0 GWh in total, and could be managed by demand responses, such as load shedding.

“The reliability requirement in the HIGH RE scenario is significant with 105GWh and it is hard to imagine how this could be met other than by utility-scale bulk energy storage.”

It suggests that battery storage provides a cost-competitive option for “security” needs, and while pumped hydro provides the cheapest option for bulk storage for reliability (despite its long lead time), it is not clear that will be the case by 2030, when the cost of other technology falls.

“Pumped hydro energy storage (PHES) is presently the cheapest way to meet a reliability requirement,” it says. “Projections indicate that the most cost-effective energy storage ptions available in 2030 will be PHES, lithium-ion batteries and zinc bromine batteries.

“These all have similar levelised cost of storage (LCOS), depending on the PHES sites selected and uncertainty in the rate of reduction of battery costs.”

The release of the report is timely, coming as it does in the same week that the ESB is taking its proposals for the NEG to the COAG energy ministers in Hobart.

While the Finkel commissioned report assumes that its “low” renewable penetration will reflect business as usual, the ESB is assuming that wind and solar will be stopped in its tracks – the inference being that the NEG will be the mechanism to do that.

Added to that the ESB’s modelling of deliberately high technology costs for wind and solar, and its assumption that emission reduction efforts will stop in 2030, then there is no surprise that the idea is being treated with great suspicion by many in the industry.

Professor Godfrey says there is a legitimate role for governments to ensure that the right policy settings are enacted to drive growth in energy storage.

“Hopefully, it will be a well thought through plan,” Godfrey told RenewEconomy, and not using storage to penalise renewables, “but to recognise we are going to have more and more renewables – so let’s get on to thinking more about the future.”

That means framing policies with a view to encouraging innovation, investment and the establishment of new high technology industries, the growth of existing high technology industries and increased or new energy exports.

“A proactive approach will provide the opportunity for Australia to lead and facilitate re-skilling of work forces and the creation of jobs across all levels of the value chain from mining and manufacturing through to consumer spending,” the report says.  

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  • Peter F

    Still underestimated in these scenarios is demand shifting, energy efficiency and higher capacity factors for wind turbines.
    Just two examples of demand shifting are ice banks for air conditioning/refrigeration and grid controlled electric hot water. Widely deployed they can move around 5GW of demand for hours and even days. For example a 400L hot water tank heated to 85C and fitted with a mixing valve can supply hot water for the average household for 3 days.
    Energy efficiency. If Australia was as energy efficient as California is today, peak demand on the NEM would be reduced to around 20-22GW

    High CF wind turbines There are areas in the US and presumably in Australia where NREL expects that by around 2025 60% CF wind turbines will be economical. They will have 160m towers and 150-170m diameter rotors and will be generating at least 35% capacity 85% of the time. If such plants are located 1,000-2,000km apart across the NEM they will be generating 95% of the time with existing hydro filling most of the gaps

    • Ian Brimblecombe

      Peter F I was wondering if you know of any Australian companies manufacturing ice banks for cold rooms this would be a massive market

      • solarguy

        Just google Eutectic refrigeration, you should get some hits.

      • Ian

        Ice bear is a USA product offering what you want.

    • RobertO

      Hi Peter, I have a 160 Litre solar water tank (Pre Heat Water Tank) roof facing west in Sydney directly connected to the shower, and also on to a normal 400 litre Hot Water (Shower has Cold, Solar or Hot supply). Solar is first choice and the add either hot or cold to suit. Most days the preheat tank is emptied (replaced with clean sydney water) so Legionella is not an issue (I was told that it would be). In winter the tank gains about 5 to 12 C rise, spring and autum about 25 to 40 C and summer up to 65 C, Over 20 years I have worked out that a Pre Heat Tank need to be 65 Litres per person, and the solar panels need to be 1.5 Metres per person. There is too little engineering on building efficencies in this country, ie Presure Relief Valve in SA is on bottom of tank, but in NSW it at the top of the tank, and equals about 48 kWhr of lost heat in water tank. Get Pollies to change law, Red Temp Relief Valve top of tank, Green (Cold) Pressure Relief Valve on bottem of tank (remove combined Temp/Pressure valve). Additional cost to customer about $20 -$40. Saving to customer about $10 per year.

  • mick

    finkel mk2 ?

  • Bruce Miller

    Please provide a link to this report.

  • Simon

    Hooray. Finally. Someone with some profile has finally cottoned on to the manufacturing angle.

  • Simon

    One thing the report notes is that manufacturing wont happen in Australia under a “Business as Usual” scenario. We need to take a look at what Chile is doing to attract major international battery supply chain participants to invest in new manufacturing within Chile. On the face of things, no one would give Chile a chance of attracting the interest they have garnered given the points made in the Finkel report in relation to Australia and market size ,etc which all apply to Chile as well. However, they have designed and implemented a national policy aimed at adding value to their lithium resources and are proactively seeking investment. Interestingly, I spoke with one of the people responsible for implementing this policy earlier in the year and suggested that Australia and Chile should combine their efforts in this regard given that between the two countries we control around 80% of global lithium supply. That person seemed interested . However, since then they have kicked on and are starting to make some progress. I think they are probably better off without Australia.

    • RobertO

      Hi Simon, we sell to much overseas as primeary product only when we should be value adding in Australia to our exports. Chile requires Lithium Ore to be processed before exporting, why should we just allow raw ore to be exported. We need to start a Value Added Service Charge (VAS) on all non food exports say $2.00 per ton (or part there of, even LPG or Coal). To be exempt you need to prove that product is in as “used final manufactured phase”, ie Copper ore or ingot fee payable, but building wire exempt. Steel as beams, pipes, angles or plate exempt but ore or ingots fee payable. (Coal fee but converted to coke exempt ? LPG fee, )
      Make it Fed Gov no income, all monies raised go to CEFC / ARENA in ratio 90% / 10%

    • My_Oath

      Ummmm — might want to dig a bit deeper into what Chile is doing and which way the flow of money is. In fact I find your comment so far from the mark I can only assume you meant another country like Argentina rather than Chile.

      • Simon
        • My_Oath

          Specifically CORFU and 60% royalties… and Chilean lithium-exposed companies doing flips and twists to invest anywhere in the world other than Chile.

          • Simon

            Counter-specifically: companies like Umicore and Samsung are now lining up to access discounted Chilean lithium by investing in manufacturing within Chile. Australia can only dream…

          • My_Oath

            So the Chilean lithium is ‘discounted’ and royalties are to be raised to 60% – so I ask you, where are Umicore and Samsung going to source their lithium from when the lithium producers have left for greener pastures?

          • Simon

            Haha. Not going to happen any time soon. Try starting a new brine operation. Better off paying the royalty and continue operating a resource that you know is economic. Their reservation policy is somewhat equivalent to WA’s gas reservation policy – which has helped us avoid the gas calamity that has been created on the east coast.

          • Simon

            Also, that royalty is staggered based on market price. Not everything gets hit with 60%.

          • Simon

            Also, this is a case of making hay while the sun shines. Obviously things change over time and these guys are getting on with trying to make something out of their good fortune while the window of opportunity is open. Australia risks look back and going “woulda, coulda, shoulda”.

          • My_Oath

            They are not getting on with it though. That’s the point. The policies are detrimental to getting on with it. Argentina on the other hand is actually getting on with it.

            And with 3 lithium refineries now passed FID and two more in planning, on top of the 3 concentrators operating, 4 in construction, and another in planning, Australia is getting on with it too.

          • Simon

            They are getting on with creating a legacy that has the potential to create new industries not currently in existence in the country that involve advanced manufacturing and which could be crucial as time moves on. They know the opportunity will not be there forever and are using their position of strength to try and establish what would otherwise not be possible. (They are also expanding production).

            Refineries reshmineries. That is real low hanging fruit. As time moves on and prices tighten there is no where else you would rather have a refinery than next to the mine as spodumene is by far and away the greatest opex in chemical refining. The international chemical companies who are building these refineries know that. The Australian miners are a long way behind in that regard. So that is a no brainer.

            Unfortunately, Australians are good at things that only require luck. Not much else. Hence, why we end up with a massive State debt despite having been through a massive iron ore boom.

          • My_Oath

            “(They are also expanding production).”

            (While others are doing it faster in no small part due to Chile’s restrictive policies making other sources more attractive).

          • My_Oath

            Yes – its also production permit based. You want to increase production. You can either pay 60% royalty, or go somewhere else. That’s the point. Chile is locking in production stagnation with these policies. These policies prevent the production needed to supply your Umicore and Samsung demand. Guess what the producers are doing to increase production: going elsewhere.

          • Simon

            You know why they are doing that – because they CAN. They have leverage. There are no credible alternatives. Argentina produces stuff all in comparison and if you want to start a new operation you are looking at 10 years before you have any hope of any meaningful production from a brine operation (look at Orocobre’s history as a case in point). Chile are making hay while the sun shines. They are miles ahead of Australia in this regard despite Australia having way more leverage than even Chile. In fact, if Australia banned the export of lithium, the whole battery revolution would halt and be put back 5-10 years at least before that production could be replaced – let alone grown. That is leverage and Australia is not using it while it has it. Good on Chile! Australia – wake up!

          • My_Oath

            Yes brine is a long lead time. And lead times in Chile are as long as lead times in Argentina. If you want to increase production (which the world needs to do) you do it in Argentina instead of Chile. Chile’s policies have ensured this. And Samsung et al will go where the production is.

          • My_Oath

            No actually – they are better off spending their money elsewhere… which is what is happening. Argentina, Australia, Canada etc are all benefiting from Chile’s policies. The problem isn’t so much the resources. The problem is the lack of people with expertise. The knowledge pool is incredibly small in lithium and it only takes a few key people to jump ship and Chile will be in difficulties. It certainly will not be able to increase production to feed the new in-Chile demand being spoken about here.

  • Grpfast

    Finkle mk 2 is still “pie in the sky” while we have a govt that won’t move. Even if we have a change in govt all these target dates will be past before any of it would be implemented. Sorry for negativity but Federal govt should get out of the way and let states do what’s necessary for them!

    • solarguy

      The latest Finkel study, simply supports the truth of the clean energy movement. I. That it’s cheaper and 2. It’s doable. 3. Coal is untenable.

      Federal Labor get’s that and so does WA, SA, VIC and QLD State governments. By voting Labor next election is a great way to cement RE.

      • Joe

        …and voting Greens

        • Hettie

          Absolutely. The Greens have no fossil fuel baggage, and can be relied upon, if just a few more HoR seats fall to them, to drag Labor, kicking and screaming, back to full scale climate action.
          Greens 1, Labor 2, PHON 99, Coalition 100.
          Until the Coalition is out, we are buggered.
          The RE industry, the economy, the people, the refugees, the environment, and ultimately, the 1% as well, because once the 99% are reduced to penury, the economic collapse will bring even the whole rotten elite tumbling down.

          • Brian Tehan

            I sort of get your gist but but a lot of it doesn’t make much sense.

          • Hettie

            What parts do you not understand?

          • Joe

            Hettie, I get you. Young Brian maybe a newcomer to your post. Perhaps you can add him to your Facebook friendship so that he can ‘feel’ your thinking.

          • Hettie

            My facebook posts are all public. He can read them without our being friends.

          • My_Oath

            “and can be relied upon,”

            I wish I could feel the same, I really do, but their directing of preferences to the “Climate Change is a Hoax Party” in WA – and the resultant very near election of said deniers to the Senate gives me great concern.

            The Greens thought it would be safe to make that preference deal. That fact has me concerned about their decision to put political positioning ahead of policy. That’s cool. They can do what they want. And I find that concerning enough to not vote for them.

          • Hettie

            Why not wait to see how preferences are *suggested* in youf electorate on the day.
            Remember, how to vote cards can only be a suggestion, and every elector can decide for themself.
            Today I voted in New England. 17 candidates, and although I used the Greens HtV as a guide, I made several important changes. Greens 1, Labor 2, a well known independent 3, Barnaby 17 other right wing nutter groups right down there.
            I want Barnaby gone. A Greens candidate is never going to win here and only Labor has any chance of getting the numbers required. So the point is made, and reality is faced, and you can only do what you can do.
            You can be absolutely certain that the Greens will push for renewables, oppose coal, coal minig and gas (except as emergency backup), and very soon storage will see the back of gas too.

          • My_Oath

            Good for you. Most people vote above the line though which means the preference deals matter. The climate denier mob had about 60 first preference votes and only missed out on a Senate seat by about 80 votes after the distribution of preferences and the Green ballots flowed to them. The Greens need to rectify this before I ‘can rely on them’ or I can accept the assurances of someone on the internet who has no say in their preference deals.

          • Hettie

            No above or below the line in a House of Representatives by election. Or in Qld, with only one house, and they have returned to full preferential voting.
            With the change in Senate voting rules, you dont need to number more than 12

  • Ray Miller

    Good to see more independent studies and expanding into reality of our energy transition. This report shows the ESB to be a backyard operation protecting vested interest of existing players.
    With all the bodies AEMC, AEMO, AER and now the ESB fully funded by the ‘buyers’ of electricity on the NEM, the buyers of energy seem to be effectively shut out of the decision making process, with all the benefits going to the existing generators, transmission and distribution owners and operators, excluding the customers.
    Why is this so? And why is the current federal government hell bent on increasing the long-term price of energy through incompetent policy, adding further health impacts on the Australian people and deliberately undermining Australian productivity?

    I demand a national vote on Australia’s energy policy and all the CEO’s of AEMC, AEMO, AER and ECB!

    • Hettie

      The coalition is hell bent on whatever will line their own pockets and assure them of top dollar jobs when they leave parliament.
      Too bad that the industries they think will be their forever feather beds are moribund.
      So sad. It’s coming very fast, and accelerating. They can’t see that, because they refuse to look.
      Evidence? Eeek ! Get it away from me!

  • Chris Fraser

    Just think how easy 75% renewables penetration can be. Hopefully, if you take that storage requirement of 100 GWh divided by 8 million homes, that becomes 12.5 kWh per house. That’s only a large Sonnen or Powerwall 2. Considering the crashing price of batteries, we should go the whole hog and have 100% renewables in 2040.

    • Ian

      Reducing the complexity of the modern grid to a simple percentage is like the reserve bank taking all the countless indicators of the economy and using a single instrument – interest rates – to control it.

      Tasmania for example can go 100% renewables without a drop of PHES or even 1 powerwall, simply because their hydro resource has so much water storage already built into it.

      Victoria and NSW battle to approach 100% renewables because they have existing coal generators that refuse to give up the ghost. Plus they have stubborn consumers like the aluminium industry that refuse to even consider demand management.

      Does anyone know what percentage renewables even means?

      • Alex Hromas

        Ian as far as I can remember the aluminium smelters and the BHP steel recycling plant in western Sydney have been on an interruptible electricity tariff for many years and enjoyed a cheaper rate as a result. The BHP site which uses an arc furnace of about 30MW rating installed back up gas heating to ensure that their melt did not freeze at a cost of about M$3.5 some 12 years ago and when I last heard had not had to use it. During the system overload last summer in NSW the Tomago smelter was asked to power down, gas backup is not an option for a pot line, and did so to stabilize the grid

        • epicycler

          the Smelters have power contracts with maximum demand. If they exceed maximum demand for more than a few minutes there’s a penalty. If they don’t consume at maximum demand they pay anyway. Its not hard to control smelter usage to always be near maximum demand. A generator’s dream come true.

          One interpretation is the NEG is trying to apply the same approach to supply. A minimum power supply (power not energy) from stable sources. It will force part of renewables into stable storage. The trick is to have the regeneration classified as stable.

          Why one wonders don’t they simply give AEMO the authority to set the minimum for stable power. Of course, politics and beliefs.

          • Alex Hromas

            Like many large energy smelters use a take or pay energy contract where they contract to buy a certain quantity of energy over a fixed period of time. If they use less than the contracted amount their cost is unchanged beyond that they are in the spot market which is typically more expensive. The take or pay contract may include the option for their energy supplier to ask them to turn off for short periods or reduce demand. These contractual clauses reduce the cost of the deal even further, they may never be called during the duration of the contract but give the energy supplier more freedom to operate.

          • epicycler

            the reason I am interested in the “maximum demand” type of power contract is that the NEG looks awfully like a “minimum supply” limit. Obfuscated by beliefs and lobbies and interpretation.
            To potlines management the “maximum demand” is a power limit (GW) not an energy limit (GWh). The NEG seems like a very complicated mechanism for achieving a “minimum supply” power limit from prescribed, stable, sources.
            To avoid the 100% during the day and less at niight that can average to 23.5% energy target.
            Its not helped that the terms power and energy seem to be used interchangeably in some quarters.

      • Chris Fraser

        It could be the case that consumers simply choosing their most desired, cheapest energy source will make otherwise viable coal generators very unviable. Then the ghosts, rent seeking and write downs will happen all the more quickly.

      • epicycler

        “Does anyone know what percentage renewables even means?”

        the current large scale renewable energy target is 33,000 GWh in 2020 means that about 23.5 per cent of Australia’s electricity generation in 2020 will be from renewable sources.

        So we can have 100% renewables some days, and 0% some nights.

        The report the article we are commenting on uses a percentage of power for its scenarios. I understand why, but the percentages are not directly comparable to the RET percentage.

        There is a difference between power and energy.

        I realise your question was probably rhetorical but I can’t help pointing out we are not comparing apples with apples. First question I always ask is “percentage of what?” (pun intended in this case). Part of critical thinking.

        The current NEG proposals are about constraining the proportions of power. A very complicated market approach, coloured by politics, to an engineering problem.

        The original market was designed more than 15 years ago around the status quo at the time. Its failed. Now we are seemingly about to add more market mechanisms, based on today’s status quo. Doing the same thing twice and expecting a different outcome is ………..

  • AndrewATA
  • Joe

    How about a new report into Coaler John Pierce and his NEG. Still waiting for an advance on his 8 pager talking points release that Two Tongues Turnbull waved around some weeks ago.

    • Hettie

      COAG coming up this weekend. Should see NEG dead and buried.

      • Joe

        ….and cremated…. as per the red budgie boy

        • Hettie

          It has always puzzled me how something dead and buried could then be cremated. Unless, of course, it were first exhumed.

  • RobertO

    Hi All, This report is of no use the the COALition as it contains no new COAL. I still hope that the NEG gets canned completely, not delayed or studied as it will slow down or delay new RE that we seem to need now, not in 5 or 10 years time.

  • Peter Campbell

    The report we would have had if Finkel were not trying to appease the Libs with something he naively thought they could digest?

  • Cooma Doug

    We have instructed the LNP to allow all humans to marry.
    Can we help them with the energy matter. They are obviously unskilled in all things obvious.

  • Robert Comerford

    This will get swept under the table, doesn’t fit with what the coalition want to hear.
    If Barnaby romps back in with an increased majority that might give us an idea of how the LNP fossil fool deception goes down the with the average voter.
    Someone recently asked what race is d*ckh**d?
    I can think of one that begins with an A :>)

    • Ren Stimpy

      OMG Robert you have to tone it down. Your crude language is going to give us a h***t at**k.

    • Mike Westerman

      It comes in handy tho’ to Labor premiers who are about to tell Frydenburg where to get off the bus! The NEG is already gone…

  • Mark Roest

    What if the tables were turned completely, and the government purchased batteries in volume, and passed them on for only the actual cost of batteries plus logistics? Using next-generation batteries, this is what I see:

    105 GWh, same as 105M kWh, x $100/kWh = $10.5B; spread out as optimal for local resilience.

    50 GW x $100 = $5B; already included in Reliability req’t. because Watts at least equal to Watt-hours in each battery. No need to spend it.

    • Ren Stimpy

      Using these so-far imaginary batteries of yours which haven’t yet come to market?

      Why are you wasting time on these blogs rather than making the cheap battery dream happen?

    • Alex Hromas

      Batteries are not the complete answer as they typically provide power for not more than an hour or so. They are mainly used to stabilize the grid under extreme conditions. If our power generation were only based on wind and PV we would need some form of large capacity storage like pumped hydor as well as batteries with the latter close to load centers to minimize losses of this very expensive energy and the pumped hydro close to the main generators i.e. old open cut mines. Our grid right now consists mainly of steam power stations with a bit of wind and PV. SA is the exception. If it were to transform without political interference, which will happen in the future, it would include a large proportion of concentrated solar thermal with storage. These plants have a similar despatch characteristic to coal fired station the former store their energy as heat the latter in coal dumps on site. The present political uncertainty generated by the Lib/Nat government makes investment in these more capital intensive projects unattractive to investors but things will change. The only question is how much damage will the present policies inflict on our economy.

      • Mark Roest

        Please note my statement, 105M kWh, x $100/kWh = $10.5B
        If you use all of the usable capacity (protecting the battery from damage) in an hour, a battery will last an hour.
        If you use 20% of the usable capacity per hour, it will last 5 hours. That does not impact the cost per kWh, which is way less than you are currently paying in Australia. However, someone noticed yesterday that Tesla plans to charge just $75 per kWh capacity for their larger Semi battery pack, compared to the smaller one, in 2019. That means they will be making it for considerably less. It’s up to you to insist on a fair price; $600/kWh to $900/kWh for batteries in Oz just doesn’t cut it any more. And I’m not sure if I remember correctly, but I think I remember that pumped hydro costs at least $500 per kwh capacity.
        Over the last couple of years, people all over the world, including in Oz, have discovered that with advanced electronic controls, batteries can work more effectively than steam plants to maintain stability of the grid, AND to keep the grid running consistently with variable renewable energy supplies. And, I know of technology that will reduce the cost of solar thermal power towers substantially.

        • Alex Hromas

          You need to compare levelised prices i.e. cost of energy plus cost of capital over the life of the plant and decommissioning charges. The last time i looked battery energy was considerably more expensive than pumped hydro it may yet come down. When it comes to short term stability cost per kWh is not as critical as quick response. You may hear a log of stuff about system inertia. This is the short term stability provided by the spinning masses of turbine plant. Batteries can provide the same function, even better than inertia, and respond much faster than hydro which takes about 15 min to accept full load compared to coal which takes hours. The scenario that i outlined is valid under current costs and may not be in 5 or 10 years time. Don’t forget we have less than 10 years to de-carbonize our stationary generation.

          • Mark Roest

            Consider that Tesla plans to charge just $75 per kWh capacity
            by 2019. The next generation of battery technology may be on the market then, too. Next-gen solar will probably follow by 2021. It’s all about future disruption, not what’s in the past.

          • Alex Hromas

            That would open up a lot of new options hope they can achieve it.

          • Alex Hromas

            Incidentally the cost of pumped hydro is very site dependent and depends on how much you have to spend on the dams. At some of the abandoned open cut mines this is very little. I was involved with a scheme in Ireland using an abandoned silver mine and a turkey nest dam on top of a nearby hill with much lower cost. Ireland is heavily dependent on wind power, they have no fossil fuels. All of their turbines are in the one wind zone, Atlantic, so they can suffer a country wide wind drought. This system is one of their backup supplies. All a few years back but much cheaper than $500/kWh. Incidentally I have to be convinced that Snowy 2 is a viable proposition. One scheme with Tantangara reservoir as the high pond and Talbingo as the low one. About 30 km of pressure tunnel and a huge underground power station about the size of Murray 2. Far too costly and in the wrong place.

  • Ian

    Can anyone clarify what Alan Finkel’s new report defines as renewables percentage. Is it nameplate generating capacity or expected average daily electricity generation or proportion of actual yearly electricity generation mix?

    Solar and wind generators are not expected to generate all the time – the energy resource varies. They can very easily be curtailed and then re-engaged up to the limits of the available resource. Gas has always had a standby function and has always had a nameplate capacity in excess of day to day requirements. It needs either decent capacity payments or given enough operating time to be economically viable. Old coal may theoretically pump out power 24/7 at a constant rate, but suffers from decrepitude and is liable to fail unexpectedly.

    A grid seldom has 100% nameplate capacity, its more likely to have 150% or 200%, and each generator seldom is required to produce to its full potential through the course of the year.

    So what is this renewables percentage that they keep harping on about?

    • Mike Westerman

      Ian – you can download it and read it at http://acola.org.au/wp/wp-content/uploads/ENRG-final.pdf but I don’t understand your point. Generation capacity always needs to be quoted as nameplate rating and capacity factor or energy produced within a defined period, regardless of whether thermal or renewable.

      • itdoesntaddup

        His point is that the percentage renewables might be the percentage of total supply from renewables – i.e. actual production, not capacity.

    • Alex Hromas

      The renewable contribution is stated in MWh and hence is the actual amount generated as a percentage of the total. Installed or name plate capacity has to be higher especially with wind turbines which are rated at their top wind speed, seldom present, and whose output drops off as the square of wind speed. They are still an economic proposition because they are cheap to install. Like a lot of folk Ian you have lost sight of the main reason for all of this i.e to decarbonise our economy and keep global temperature rise below 2 deg C. The Lib/Nat mob have generated huge uncertainty in the energy market in order to suppress the penetration of renewables this has stopped investment in more expensive solar thermal technology that can provide cheap storage and be dispatcable and enables them to push the barrow of when the wind don’t blow and the sun don’t shine. Their insistence that wind and solar are backed by an unspecified energy store system is just a way to make these generators less economically viable and preserve the existing coal fired assets

    • epicycler

      I think its fig 6 in the original report that has “1000’s MW”. Power not energy. Whether its nameplate or actual is not mentioned.
      Thus, the 50% proportion of power scenario bares no relationship to the current annual target of 23.5% of energy.

  • itdoesntaddup

    Well, I’ve now read the report. The description of the modelling done to arrive at the storage requirements is somewhat nebulous. A magician’s black box and – Ta-da!

    It might have rather more credibility were the model spreadsheets to be published. That at least would allow comparison with some of the previous work such as the AEMO 100% Renewables study and Blakers’ recent effort (which takes much of the AEMO data and model as its basis. I know from the AEMO data that 2010 was an above average year for solar. Perhaps they should have looked at June 2017 and seen just how much surplus generation capacity they would have needed to live within their storage.

    • Mike Westerman

      At least there is modelling behind this and Finkel (and AEMO) whereas pronouncements and assertions have been made of NEG on the basis of nothing but bluster. And all models are weak on the feedback loop of lower daytime prices impacting on capital expenditure and innovation in production processes/consumption.

      • itdoesntaddup

        That’s far from the only model weaknesses I’ve seen with AEMO/Blakers. There’s some very peculiar data input that is obviously modelled – it lacks the stochastic behaviour of real world data, and it it hard to be sure that it wasn’t created to provide the answers they wanted to see. Also some very ambitious performance assumptions that seem to ignore the stock of existing installations, and to assume that various kinds of capacity can be provided at low cost (including transmission).

    • epicycler

      I believe figure 6 has the proportions for each scenario,

      the y-axis is MW, which is power, but unsure if its nameplate or actual

      the renewable energy target is energy, GWh, for a year,

      its relevant to the NEG which has an outcome of a minimum level of stable power generation, whatever “stable” is.

      Basically we are here because the energy target allowed 100% renewable for short periods so now we make the period instantaneous and need minimum power levels.

      The outcome will be to push some of the unstable renewables into stable storage (pumped or thermal) which can be re-generated as stable.

      Just that the same outcome can be created more easily than through a market mechanism.

  • bigtreeman

    Lithium-ion batteries fail because of their short life span.
    Often said to last up to 10 years.
    With hard usage – overcharging, high discharge rate or depth of discharge, life can be reduced to as little as 2 or 3 years.

    Lithium-ion are high density, currently “best technology”, but not suited to all applications. Vested interests want to sell their products into as many markets as possible and make a lot of money.