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Northern Territory’s $2 billion scare campaign against solar

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alice springs solar

The Northern Territory’s conservative government and its state-owned power generator appear to have a thing against solar. So much so, they have gone to extraordinary lengths to demonise the technology, claiming it will cost up to $2 billion to power the city of Alice Springs with nothing but solar power.

No one is actually suggesting that Alice Springs should be powered 100 per cent by solar power just yet, although many are suggesting that added solar should not be ruled out. But the government is clearly feeling defensive about its recent decision to invest $75 million on a new gas generator, without any consideration for solar alternatives.

And its response to that criticism is revealing some heavily in-built prejudices and misunderstandings about solar power. And this in a city which likely already has the highest penetration of solar power in the country, has better sunshine than any capital city, and is described as the “solar heart of the country.”

We first wrote about the territory government’s antipathy to solar in April, in this story, Alice Springs: Solar city at centre of a fossil fuel controversy, when it was revealed that the government had responded to a major black-out by announcing a $75 million in new gas-fired generation, with apparently no consideration for any more renewables.

State treasurer Dave Tollner sought to justify the decision with a series of myths, falsehoods and complete misunderstandings about renewable energy, including the claim that when the sun shines, “or the wind starts to blow, and suddenly the cables are overloaded, they heat up, melt, collide and fail.”

Chief minister Adam Giles doubled up on those comments a few weeks ago, claiming that any efforts to go “100 per cent” solar would cost $1.4 billion, and suggesting that there was already too much solar in the system.

“There is a general rule that says, once you get to 20 per cent you start to have load issues, which is why you see blackouts in Alice Springs,” Giles said.

That’s not true, on several fronts. The big blackout in February was caused by a problem at the gas generator. And as a trial project involving Territory Generation and sponsored by the Australian Renewables Energy Agency pointed out in 2014, the city could easily obtain 60 per cent of its electricity supply from solar into the grid.

A report on that project said the increased variation in supply would be no different from the “noise” of varying levels of demand. It said such claims about variable supply sources were based on the assumption that all demand is constant. It almost never is. And grids like South Australia already get close to 50 per cent supply from wind and solar without issues, while smaller mini-grids go to 70 per cent or more.

But the government’s extraordinary estimates for the cost of going “100 per cent” solar are easily the most egregious.

We had asked Giles’ office, soon after his comments, where he got the $1.4 billion estimate from. We were told then that the government-owned Territory Generation was “putting together” some modelling and we would have to wait a week.

We actually had to wait a little longer than that, but part of it was finally released last week, by the general manager of Territory Generation, Tom Duignan. And in this part of the report, the cost of going 100 per cent solar had suddenly jumped, to between $1.5 billion and $2 billion, an investment that would lift electricity prices by 350 per cent.

alice fact sheetEven if someone was to suggest that Alice did go 100 per cent solar, which no one is, the numbers seem extraordinary. According to Duignan, enough solar and enough storage would need to be built to provide electricity for seven days with no sun. He pointed to a cloudy period from May 2 to May 8 when solar output had fallen 46 per cent.

This, said several experts in solar and storage, was perfectly ridiculous, a clear sign of the “old way of thinking” against the new; the sort of mentality that thinks only in terms of “base load” power, and which has underpinned the gold-plating in Australia’s grid in recent years.

alice scenarios

It is even more bizarre because Territory Generation calculated these scenarios (see above) on the basis that there would be 36MW of back-up dual-fuel power at the Owens plant in the system anyway. Why? Because it is needed just in case the gas generator fails, like it did in January.

So, any expert in solar and storage would ask, why on Earth would you be seeking to invest in seven days of storage when there are back-up generators? It makes absolutely no sense. We asked Territory Generation for a response on several occasions in the last few days. We have not received one.

One of the big differences between fossil fuels and renewables is that wind and solar cost more to build, but then run on a fuel cost of zero. The opposite is true of gas.

What, we asked Territory Generation, was for the cost of gas-fired power over the 25-years life of a solar farm? Would Territory Generation provide its estimates of the running costs of the gas plant – including the fuel cost – over the next 25 years? What is the cost of generating a single megawatt-hour at the gas plant?

Commercial in confidence, we were told. So we did a back-of-the-envelope calculation. The town’s average demand is said to be 25MW. Let’s say it costs $100/MWh, which is pretty generous, that would equate to around $22 million a year in fuel costs, or a minimum $550 million in fuel costs alone over the next 25 years.

That actually puts it in the ball-park of the concentrated solar power option that they considered, of about $600 million. A solar tower with molten storage meeting the town’s average 25MW power demand, and peaks of around 50MW, would probably be cheaper than that.

It would not, for instance, need 48-hour storage – not in a town that has 300 sunny days a year, as the township boasts, and certainly not with the 36MW of back-up plant.



As for the solar PV estimates. They seem perfectly ridiculous. 100MW of solar PV – which is what Territory Generation estimates would be needed – should cost no more than $300 million, even allowing for the remote area. If the plant was distributed into smaller areas, the cloud cover would be an issue.

Yes, battery storage would be needed, to help smooth out the output as clouds pass, and to provide “ancillary” services such as frequency. But it would be nowhere near the amount indicated by Territory Generation, and costs are expected to fall by half in coming years – about the time that any new capacity would be needed.

That is the point the Repowering Alice Springs community group has been arguing – for the people who run the grid to have some consideration for the future and include solar in the calculations, and not to rule it out on some ridiculous cost estimates of “solar only” using outdated ideas and practices.  

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  • howardpatr

    More LNP bullshit.

    They have so little shame.

    • MaxG

      The problem is not shame; they actually believe in this.

  • john

    Here is the problem we have senators and members of parliament, who make statements like this ” Solar panels fail when it is hot and solar panels will never pay for themselves in a million years”, now the average person hears these comments from their elected Representative and naturally come to the conclusion that these new fangled solar things must not be very good.
    Therefore it is very easy for a government spokesperson or in fact a minister to put out FUD well why?
    Because the federal leaders have and are doing the exact same.
    So coming back to the situation the LCOE using solar is very very compelling.
    Why?

    Because the ongoing cost of Energy is Zero.
    R & M or O & M which every way you cut it is going to be lower than any other type of mechanical source of energy.
    So looking over say 10 to 15 years operation one will find a gain by utilizing that zero energy source.
    R&M Repairs and Maintenance: O&M Operations and Maintenance.

    Fuel cost for RE = Zero Fuel cost for any other system about $500 million.

    • Island fisher

      John therein lies the problem for the right wing nutters, how can a mining company make any money out zero fuel cost so the COALition would not recieve any more of the millions$ of campaign funding

  • Mark Roest

    The costs for batteries should fall to between $100 and $150 US per kWh capacity by 2020 or earlier. Solar should be less than $0.70 per Watt today, for large ground-mount projects. By the way, it can be put up over the roads, providing shade and not interfering with other land uses. Don’t have an estimate of the structure costs yet, but well under today’s conventional construction costs.

    • A1

      Solar is a lot more than 0.7 per W today, even in USD.

      I think best estimates of batts 2020 without BOS is around $300 USD?

      • Mike Dill

        That is the panel cost. Yes, you need to add in mounting, inverters, and interconnection costs.

  • Brunel

    Is Darwin connected to any grid.

    They built a railway from South AUS to Darwin and I think a HVDC link would be cheaper to build?

    • A1

      see Darwin Katherine Interconnected System.

      New network would be quite expensive given low number of customers.

      NT/Alice Springs presents some of the better opportunities to test hybrid systems in Aus.

      A basic feasibility study seems prudent given the sum of money being considered. Not having one is bordering on negligent.

    • john

      no mate the Northern Territory is not connected to any grid.

  • Tommyk82 .

    I suggest we re-name this piece: “Giles vs. Giles” 🙂

    • Ian

      Nice one, or perhaps the tale of two Giles’s.

  • Ian

    Lets be frank – the Coal-ition are really a bunch of aholes.

  • Phil

    They should LEASE a bundle of 5kw solar panel systems and a 5KWH
    lithium battery into every Alice Springs ON GRID customers premises for the SAME COST per kwh as now and carry on as normal.

    Those that choose not to join can go off grid

    Assuming there are 12,000 dwellings based on a population of 25,000 that $2 billion would allow $166,600 per dwelling to do this

    As it would only cost $20k per dwelling the remaining $146,600 per dwelling , or $1.759 billion could go towards any power station for base load you could imagine

    I look at the stories that come out of the N.T and wonder if the whole territory is not one great big situation comedy.

    We get far worse weather in the ALPINE region i live in and by OVERPANNELING by 100% even on really cloudy days you get a full charge. Solar panels are CHEAP , CHEAP , CHEAP.

    • john

      Phil
      The Territory News is know for ghastly headlines.
      However look down at my post LCOE is compelling yes i know no figures but they are well know.

  • Chris Fraser

    In our right minds, no one could really deny the Alice’s wonderful solar resource. So much better than other parts of our country. I could give them a daily weather report, and that would still apply two months later. I hope that the NT government can one day accept some objective analysis of the solar needed for 99.99% uptime.

  • Lets just call it out for what it is. Corruption. Plain and simple.

  • juxx0r

    Just as an aside, reciprocating gas would cost about 12-14c/kWh, and probably more given that solar cuts it’s grass in the daytime and it has to ramp down at night. My guess would be 14-16c/kWh.

    I note that neoen can build Hornsdale at 7.7c/kWh including profit and solar comes in at 10c/kWh. Wonder what sort of deal they could get out of Neoen if they threw them $75M up front?

  • Ian

    Alice Springs,to be fair, is very isolated. Solar cannot do the whole job of covering 24/7 electricity and from what I have read, there is a sizeable nighttime component to their energy needs. Average demand is 25MW so daily demand would be 600MWH , solar could certainly produce all that power very cheaply, but what to do about night time electricity demand? Gas generation is relatively cheap to install but it’s running costs are high. If night time demand is significant than solar cannot offset most of the electricity production and gas generation becomes expensive.

    What are the wind resources like? Are there geothermal sites? Why is there such a high load demand at night? Is this due to air conditioning requirements or some industrial process? Can load management reduce the need for non-solar power generation in the night time situation? This may be a good site for flow-battery technologies or solar thermal plus storage.

    Far from being a Problem Child , Alice Springs could be a great case study for a sizeable isolated renewables minigrid.

    How about a more detailed analysis of the wind, and geothermal resources and the load profile including the reason for high nighttime electricity use. The solution to their problem could be simple load management.

    Giles give us the details and see what designs your readers can come up with for Alice Springs minigrid.

    • nakedChimp

      CSP?

    • neroden

      A very reasonable first step would be to install enough solar to replace all daytime demand. Turn the gas generators on at sunset, turn ’em off at dawn. If there’s terrible weather you can run ’em during the day.

      Should save at least $12 million/year in fuel and should cost no more than $150 million, so the payback is about 12 years. After that the territory continues to save $12 million/year for at least 18 more years and probably much, much longer.

  • Marcel

    Those issues in Australia seem ridiculous indeed but sadly they’re not unique. Look at what the Polish government is doing to save their coal. They even go as far as saying new generation coal plants are more environmentally friendly than wind and solar… Sure, except they have some of the worst pollution problems in Europe.

  • Carl Raymond S

    Time for Darwinians to show that they have grown up and care about more than crocodile attacks, stubbies and barramundi. Building new FF combusting plant in this day and age is a giant finger to the rest of the world. Come on Territorians, you can’t hate us that much.

  • Tommyk82 .

    You’re all getting sucked in to the conversation about how to get to 100%. Don’t let them win. Labor’s target is 50% We can get there before we worry about the cost to the finish line.

  • Ian Harrison

    The have not considered all the options, especially new Battery technology now available that are cheaper than lead Acid and longer lifed than Lithium. These are predicted over next few years to drop in cost to a lot lower than Lead Acid (like a 3rd) with 5 to 10 times life.
    Add that to diversified renewable power source by adding some wind generation and methane fuel cells (methane from sewage digestors) to existing Solar (rooftop and larger plants) with some smart controls you should get rid of desiel/gas powered generation, or at worse a small set to top up Batteries if renewable source are low.
    A billion dollars is highly inflated, they have focused on Solar and expensive battery technology just make it look bad. Use the right storage for this setup, develop diversified energy source, utilize existing source (roof top solar) and you can even do the switch in phases to spread the capital cost.
    Long term savings are massive with low maintenance and nil fuel.