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SA power plan: Why so much gas, when storage is so cheap?

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Of all the great initiatives that came out of South Australia’s energy plan on Tuesday, one thing doesn’t appear to make sense: why spend so much money on a peaking gas generator when storage options are clearly cheaper?

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The big question was over these two sums: The $360 million in government monies set aside for a 250MW gas plant that might rarely be switched on, and the $20 million that treasurer Tom Koutsantonis says could be enough to get a 100MW battery storage facility built by the private sector before summer.

Surely, analysts and pundits say, spending more on battery storage is going to give a bigger and more immediate bang for the buck than the gas generator. And they won’t become a redundant asset as the gas peaker threatens to be in as little as five years time.

In theory, those sums suggest, South Australia could cause some 1.8GW of battery storage to be built for the same taxpayer funds as a gas generator. Of course, it is much, much more complex than that.

The reality is that the $150 million set aside in the new Renewable Technology Fund is probably going to support more battery storage than can be sustained under current market rules. (Indeed, some of it is earmarked for solar thermal, pumped hydro or even hydrogen).

Battery storage – in current market rules – will trade only on energy market volatility and the arbitrage between high and low prices (fill it up with cheap excess wind and solar and sell it at high, peak demand prices).

The more storage that is added, then the less volatile the market will become, and the less money that can be made.

So storage will probably not be fully economic and widespread until the overall market rules are changed and battery storage technologies can access its multiple value streams.

This will come from rule changes such as dumping the 30 minute settlement in favour of a 5 minute settlement, and the introduction of a new ancillary service market, and maybe for grid augmentation.

Then there will be nothing stopping it, although longer-dated storage such as solar thermal, pumped hydro or even hydrogen will also be needed at various points in the transition to 100 per cent renewable energy.

But it is the volatility that the South Australia government wants to kill as soon as it can. The state has always had a volatile electricity market, courtesy of its stringy network, daytime manufacturing and high air con use.

It has actually moderated some of those issues with the introduction of wind and solar, but it remains victim to just a few powerful players who can pretty much set the price in the market.

It is estimated that South Australia is paying around $400 million more than it should, thanks to the jump in wholesale prices. Separate estimates put the extra annual cost of ancillary services at more than $100 million alone. This has jumped in South Australia (see below) and also in other coal states such as Queensland and NSW.

fcas sth australia

With no competition, the incumbent generators can name their price, just as the oligopoly in Queensland are now doing. (As David Leitch points out, the extra costs now amount to around $11 billion across the nation, mostly due to that lack of competition).

Morgan Stanley analysts believe the combination of South Australia’s proposed gas plant and battery storage could reduce the number of price spikes in South Australia by around half.

In 2015, they say, there were 96 thirty-minute intervals where prices exceeded $300/MWh, and in 2016 there were 402, even though average demand had fallen to 1.7GW from 1.95GW.

Morgan Stanley’s Rob Koh says the new entrants could “theoretically” meet about half the current high price and demand events and bring average prices down by around one-quarter to 2016 levels of around $90/MWh.

That suggests a quick payback for the government-owned gas plant, even if it is never switched on.

Energy minister Koutsantonis says the gas plant won’t be a market player, but it doesn’t have to be. Its mere presence could have a moderating effect on wholesale prices.

It also acts as a form of insurance, given that the biggest generator in the state, Torrens Island, is – in the words of premier Jay Weatherill – an old “clunker”, and the three generators near Port Lincoln are, suggested one politician at the recent Senate hearings – “a piece of crap.”

That means the government is looking to kill two market failures – the lack of competition, and the threat that one of the private generators simply won’t switch on their plant when needed, as occurred on February 8, or others retire from age – with two stones (gas and storage).

On those numbers above, the South Australian government probably feels that the $360 million invested in a new gas plant is justified, even if the plant itself never makes a profit.

But the chances are that the government won’t have to pay anything like the $360 million it is quoting for the new gas generator.

As various commentators on this site and elsewhere have suggested – why build a new gas plant when there is apparently a gas shortage. The new royalty arrangements and exploration incentives aren’t likely to help the  “shortage” anytime soon. Deutsche Bank analysts say it will have a “negligible impact” in the short-term.

And why spend $360 million on a new plant when one can probably be rented at a fraction of the price. You could even ship one big one, or several small ones, in on a barge, as the government appears determined to do for next summer in any case.

The chances are that this emergency measure will only be needed for a few years, until storage is well entrenched and the ransom note written by the incumbents has been shredded by long-awaited rule changes.

The gas market will take years to fix, and even then it will be outrun by new technologies and the combination of wind, solar and storage. No one believes for a moment that gas prices will fall, but wind, solar and storage costs most certainly will.

It is telling that gas major Santos has teamed up with Ross Garnaut’s Zen Energy to build solar plants and storage. Santos says it will help free up more gas for use elsewhere.

What does this tell us? One of the biggest gas producers in the country says the cheapest way to free up gas is not to drill for more, but to build a solar plant.

In the same way that leading zinc producer Sun Metals has responded to soaring wholesale electricity prices in Queensland by deciding to build its own 116MW solar plant.

As one energy market CEO told me on Tuesday, building baseload – as the Coalition would want us to do in Queensland, with a fantasy product called “clean coal” – is the “worst idea in the world.”

And it’s important to point out that South Australia’s government is not building a baseload generator. Its peaking gas plant is there only as an emergency back-up and as a tactical player to keep price hikes in check. It is not the so-called “renewable problem” it is responding to, but a market failure.

In the very near future, nearly all generation in South Australia will be “dispatchable” – either with built-in storage such as solar tower and molten salt storage, or with a battery array accompanying a wind or solar farm.

The SA energy security target, although lacking in details, is designed to ensure that. And it is also designed, by mandating local dispatchable generation, that the big players don’t just pack up and leave, and close down facilities, because the gas pricing party is over.

One important factor though, and one that will surely play a role in the upcoming government battery storage tender, is the need for new competitors.

There is little point awarding a battery storage contract to one of the existing players, however much they would like it. AGL and Origin already control 80 per cent of the local gas generation, and that is equivalent to 80 per cent of the dispatchable market.

As Leitch has pointed out in his analysis of the Queensland market, the Wivenhoe pumped storage facility is rarely used, because it would dampen the profits of its owners, which also own coal and gas generation.

This is the result of the nation’s failure to provide a truly inter-connected market. That leaves outlying states like South Australia and Queensland at the mercy of the powerful incumbents. It’s not so much as a Brexit equivalent, as the AFR described it today, as a Balkanisation.

That’s the market failure that South Australia is responding to.  SA Premier Jay Weatherill has already hit out at the generator companies for putting profits before people. That won’t change if its initiatives simply entrench that power.  

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  • mfgonfie

    In some countries, hydro pumped storage facilities operation is governed by Transmission System Operator, due to their strategic role, while the ownership remains with the Power Producer.

    This is something that could be implemented in Queensland as well.

  • Charles Hunter

    I was wondering if the gas turbine might also be envisaged as a way to make sure that SA had access to “inertia” from proven and well-understood technology? In what I have been reading about the Canadians and synthetic inertia from wind turbines, it sounds like it isn’t yet regarded as proven technology.

  • An expensive stranded gas asset within 5 years isn’t what SA needs. It was very disappointing the Govt didn’t commit to CST at Port Augusta or even to any of the pumped hydro sites identified by ANU. This issue will continued to bubble away ahead of the State election in March 2018. I expect the claims, “alternative facts” and downright lies to breed like rabbits between now and then. Lots of heat, but not much light.
    Mark Parnell MLC, Parliamentary Leader, Greens SA

    • nakedChimp

      Give them a Pyrrhic victory.. just imagine what would happen if labour doesn’t make it in SA and the liberals would take their place.
      You sure those $360M are that bad a price to pay for this?

      Politics isn’t logic. You can’t always get what you want, you also have to give and lose a bit.

    • Richard

      The problem with the Greens is that your desire for total and utter victory on whatever front you are banging on about has no room for compromise. That is why you are totally to blame for the lack of a carbon tax in this country. Your Nazi like zeal in negotiating with Rudd and Gillard has left us in the mess we are in now.

      You should all go and hang your heads in shame.

      • trackdaze

        Rubbish.

        • Richard

          Total truth!

      • Ricardo K

        From zero to Nazi in 2.1 sentences. That’s got to be some kind of comment record.

        What’s wrong with a rational approach and including CST or pumped hydro, instead of more gas, Herr Obersturmfuhrer?

      • Rod

        I would have thought Tony Abbott was “totally to blame for the lack of a carbon tax in this country”.
        There was compromise on the initial price per tonne.
        The price on carbon was reducing emissions in an affordable way as opposed to direct inaction.
        Credlin herself has publicly admitted the Carbon Tax attack was purely politically motivated.

      • Alastair Leith

        Nazi like zeal, being “nazi like” in terms of zeal means what kind of zeal exactly, Richard?

        • Richard

          It means zeal that is totally blinded by self righteous beliefs. I would have thought that was obvious.

    • humanitarian solar

      I’m a Green and dissatisfied with the current leadership. Below Richard has valid points of feedback for you. The party won’t find itself in government anytime soon until it learns to unfold policies in a kind of “timing” and genuinely engage with the mainstream discussion instead of protesting and attacking voters and populist politicians from the sidelines. This polarises the community, potentially drives those voters further to the right, lowers our credibility and resulted in us doing poorly in the WA election. You are here evidencing the same kind of uncompromising approaches that are so standard for us the Greens. Ineffective. Lack empathy with the electorate. Fail to work with the national discussion in any meaningful way to bring others on board, including failing to build strategic alliances with other parties. I suggest you start supporting the Labor party in their attempt to move the state forward instead of standing on the sidelines and criticising them.

    • Mike Shackleton

      It’s been floated but but the SA gov is open to alternatives. Isn’t there a spare unit mothballed at Pelican Point? Going down this route would utilise an existing asset that is currently not being used and the solution could be implemented very quickly. It does seem pretty stupid to purchase a gas unit when the gas supply problem has been blamed for units not starting up.

  • MrMauricio

    He is scared to look too Green.Some of the bullshit obviously “stuck”!!! Elon Musk gave him the biggest get out of jail option EVER-without ANYTHING to lose!!!

  • Brunel

    It is due to his ignorance of UHVDC transmission lines.

    Batteries and UHVDC go hand-in-hand.

    There are already peaking plants in WA and NSW and Vic.

    The sun sets in Perth probably 2 hours after Sydney.

    • juxx0r

      probably?

  • Rob G

    Weatherill is a smart guy and he knows that getting the ‘gas lobby’ on his side is a good way to pressure the Trumbull government. Just today, we heard Frydenberg singing a slightly different tune than his angry rant yesterday. Clearly somebody within the gas lobby called him and ordered him to “back-off!” He said that he thought the local gas sourcing was actually a good idea. If Weatherill can ‘include’ gas in the mix (even if he quietly sees no real future for them) he can lessen the criticism and ‘appear’ – even to the likes of the Murdoch rags, that he is looking at a mixture of energy sources. This is political wrangling at it’s best and it’s leaving the federal government looking very silly indeed.

    On the battery bidding front, I also suspect SA will get a very, very good deal. This would be a fine feather in any battery manufacturers hat, An acknowledgement that could potentially give that company a head start in other such bids around the world. Weatherill is proving to be smart on several fronts.

    • Rod

      Frightenberg was still pushing today for more gas extraction from States where it is currently off limits.
      The problem is, the population now knows 70% of our gas is getting sold overseas with very little value to the National accounts.
      If he thinks the population will support further exploration he is dreaming.

      • Rob G

        It was always about pressuring Labor – making it look as they were the obstacle. This is how these guys role – constantly looking after their corporate mates at the expense of everyone else. Gas extraction really only serves them. Problem now is, it’s becoming glaring obvious who the government represents…

    • Alastair Leith

      Yes but the real market for fracked gas as we all understand is export, that might help his political fortunes short term, but it’s a climate and environmental disaster in the making.

  • Pete

    As a more positive perspective, SA is leading Australia, and the world on the proportion on RE in a large grid, but it’s still dependent on imported brown coal power. The energy plan advances the state even further into the RE direction but it now has put in train a ‘security’ policy to end the brown coal dependence and set itself up to not have to return to it when the 49yo Torrens Island A plant shuts for good. I suspect the new gas plant is about a long-term risk management plan for retiring generators, competition, and the opportunity for the gov to become an dominant force in the local market again, its not just a temporary peaker plant. The gas crunch is a cycle in a volatile industry, its best to plan beyond the cycles. There’s lots of other old, unreliable peakers in SA that can steadily be replaced with batteries as they are retired over time and the tech becomes cheaper.

    • Gary Rowbottom

      Yeah that’s what I was thinking, Torrens A is 46 to 50 years old this year and Torrens B 36-42 yrs old. The Port Lincoln generating facilities aren’t great either. Having some new existing generation built when further phase outs happen could be a good thing. Also makes some time to build non fossil solutions such as CST with storage (eg the long touted Port Augusta project) and possibly pumped hydro (eg following Cultana project feasibility study).

  • Tim Forcey

    “One of the biggest gas producers in the country says the cheapest way to free up gas is not to drill for more, but to build a solar plant.”

    An even cheaper way to free up gas is to stop using it in homes. Economically “fuel-switch” to heat pumps.

    See: https://theconversation.com/the-cheapest-way-to-heat-your-home-with-renewable-energy-just-flick-a-switch-47087

    • Andrew Woodroffe

      and it is not just about being cheap, it is also QUICK, though perhaps not quite rooftop quick . . . summer starts again in 10 months . . .

    • PatSparks

      Heat pump cook tops? Not seen one of those.

      • Tim Forcey

        Electric-induction cook top is what you are looking for. See our discussion of these topics at “My Efficient Electric Home”.

        https://www.facebook.com/groups/996387660405677/

        • Mike Shackleton

          Induction rocks over gas – gas-like response, extremely fine control of heat, and a flat top area that is easy to clean and doubles as bench space when not in use.

    • Rob

      You’re right Tim. Lets stop using gas in our homes. Maybe the Greens could start a project explaining how to transition from gas to electricity in your average Aussie home. Replace gas stoves with induction stoves, gas heating with reverse cycle air conditioning, etc

    • Goldie444

      “An even cheaper way to free up gas is to stop using it in homes.”
      I have just started the process to convert my 3 gas appliances (solar hot water booster, cook-top and lounge heater) to electric. Though this will cost about $2500, I will save a $1 a day gas connection fee and heaps more in heating costs. 😉

  • Steve Fuller

    SA’s new power plan is very smart politics.

    It wedges the Feds, SA Libs, the generators and their foreign owners and COAG is now on notice to reform the NEM rules.

    At the same time it boosts the transition to renewables process which will reverberate around the country and beyond.

    Importantly, it plays to the views of the majority of the population who support the transition to renewables while alsokeeping the gas lobby on side and providing energy security to the masses.

    We’ll have to wait and see whether any extra gas exploration actually occurs and whether the gas plant is actually built if the plan delivers the leverage required to make them unnecessary and so keep the costs down.

    The announcement could actually supercharge the transition by breaking the federal imposed uncertainty constraints.

    And the bonus for SA Labor if Weatherill and Koutsantonis can play their hand well they may even win the next election.

  • Mark Diesendorf

    The price of $360 million for a peakload open cycle gas turbine (OCGT) of 250 MW seems very high. I would expect a price of $200-225 million, plus the cost of dedicated gas storage. My worry is that the high price suggests that the SA government is considering a combined cycle gas-fired (CCG) power station like Pelican Point, which, compared with OCGTs, would be slower to start-up (hours instead of minutes), less flexible in operation, much more expensive and would reduce the opportunity for more renewable energy in the state. If it is used to supply intermediate load, it would use much more gas than peakload OCGTs, despite the higher thermal efficiency of CCG.

    On the other hand, OCGTs have relatively low capital cost and, if operated infrequently for short periods of time, low annual fuel costs. Since OCGTs would only be used during demand peaks, their annual fuel use would be very small. They can be started from cold in 10 minutes and are flexible in operation. In the short-term (for next summer) they would have to be fuelled on gas. However, in the longer term they could be fuelled on biofuels, provided a low-cost source can be found in SA. Alternatively, hydrogen can be produced by using excess wind power to split water. Furthermore, hydrogen can be combined with nitrogen from the atmosphere to form ammonia, which is a much more convenient fuel to handle than hydrogen. The combustion of hydrogen and nitrogen gives water and no CO2.

    • solarguy

      Mark, Please see my post below, in regard to H2.

    • Ian

      I priced up a 180 MW CCGT plant a couple of years ago. 3x turbines plus boilers, no steam turbines, around $200M.

      • Mark Diesendorf

        Thanks Ian. That price would be about right for a CCGT, giving support to my concern that the SA government has an inappropriate CCGT power station in mind. An OCGT, which would be much more appropriate for peakload, costs much less, about $800-850 million/MW.

        • Alastair Leith

          Pretty sure that Government said something about “high efficency” comments about proposed plant were “typos” and that they are planning OCGT as you’d expect for dealing with situations with potential for load-shedding if not covered and price volatility at the top-end of the bid market. Are there any peakers in SA they could have nationalised? It seems like they’re nationalising by overriding AEMO to gain power to demand generation be dispatched when the government wants it *and* nationalising by building there own plant,. This is surely doubling up on the electoral insurance policy?

          In WA on the SWIS Sustainable Energy Now see the potential for bio-fuel from existing and future mallie gum plantations (or other plantation sources) as being critical in covering period where reasonable amounts of storage of various types can’t recharge due to unfavorable weather, mostly in the winter months where week long wind droughts can occur right across the network footprint. Much more economical than storing a weeks worth of energy in PHES or molten salts because most storage type that don’t use fuel need to be cycled to make them pay off the high capital cost. OOGT burning of biofuels on the other hand sees the capital shared across the fuel production, so stockpiling it for a still, rainy day makes more economic sense for once or a few times a year events.

    • Neil_Copeland

      It is my understanding that they are installing an aero-derivative gas generator:

      http://www.abc.net.au/news/2017-03-15/sa-power-what-is-an-aero-derivative-generator/8357496

  • solarguy

    A tale of being caught between a rock and hard place for Jay, who is clearly quite a cleaver man. The gas peaker could prove to be a master political play by him.

    All I ask is that he consider fuelling the thing with biogas, not only does that shut every one up regarding pollution etc, it would also get rid of fugitive emissions of methane from sewage treatment plants and from green waste. Countess millions of tons of methane are going into the atmosphere.

    H2 can be used, but it won’t solve the methane problem!

    • Rod
    • Brian Tehan

      The announcement that SA will build its own gas generator is going to devalue the existing ones. I’d like to think that the SA government could get Pelican Point for less than they could build one. That would be the best outcome.

      • Ian

        Watch this space. I’d hazard a guess that simply renting OCGT units could prompt Engie to offload PPPS in a fire sale, especially with the potential for a $750M cost for the closure and decommissioning of Hazelwood. Jay would see this too.

  • stalga

    I note that the Wivenhoe pumped hydro facility is rarely used because of profit motive. I also notice that when I look at the live generation chart there is rarely any hydro used in NSW. Dam levels at Jindabine and Eucumbene seem more than adequate, so does anyone know if Snowy are deliberately doing the same due to their large gas plants in NSW, or are they being conservative to ensure irrigation and environmental flows?

    • Alastair Leith

      That’s really interesting about Wivenhoe, I guess that’s not the reason they didn’t let the water spill in time before the Brisbane flood peaked.

  • humanitarian solar

    For the amount of money SA government is putting forward, they could create resilience for the entire state from weather events – while tackling immediate shortfalls in peak demand. This could be done by carrying out a comprehensive risk assessment of the weak points of the grid, then installing battery storage in those areas before summer. Having 5 x 20MW storage facilities distributed in key regional areas, would secure the grid in those most urgent population centres, creating valuable emergency response time for maintenance crews when disaster strikes. For example, if grid technical officers designate Eyre Peninsula as vulnerable, then that landmass should be second after the Adelaide CBD. If the greatest economic risk is loss of revenue from important industrial or commercial precincts then they need to be next. It’s apportioning storage and spreading the money around, to responsibility reinvigorate the economy. Every battery manufacturer supported, kick starts at least another ten companies in their supply chain and task environment. It’s avoiding all forms of economic empiricism and monopolies of big business, and instead creating community projects that begin the upward technology spiral of storage implementation, while ensuring the fastest possible rollout of storage before the SA summer. This momentum will be transferable to all the other states and territories.

  • Robert Comerford

    There is more than enough gas peakers now. Just make them have enough gas on hand and use it when required.
    Spend money on a CST plant for more energy supply and storage not another polluting fossil fuel.

  • Askgerbil Now

    It may be the South Australian plan for “100 MW” of energy storage costing $20 million is meant to be for “100 MWh”.

    One reason for suspecting this may be the case is the estimated cost of lithium-ion energy storage reported by GreenTechMedia in June 2016…
    “By 2020, GTM Research expects average lithium-ion battery costs to hit $217 per kilowatt-hour. “But we’re already starting to hear numbers in the $200 to $250 per kilowatt-hour range,” said Manghani.”

    Using the lowest figure of $200 for one kilowatt-hour from that article…
    1 MWh = 1000 x $200 = $200,000
    100 MWh = 100 x $200,000 = $20,000,000 = $20 million.

    Note the implications;
    A 250 MW gas power station can deliver 250 MWh every hour it runs.
    A 100 MWh energy storage device can deliver 100 MW for one hour.

    • humanitarian solar

      The gas power station is part of a centralised approach, making regional communities vulnerable to long runs of poles and wires. We no longer need to locate power stations on coal deposits, so we’re still comprehending the significance of that new paradigm. Fortunately the sun and wind are many places, giving free energy for eternity when distributed generation is matched with distributed storage. Investing in gas would be a stranded asset burdening the South Australian people. Investing in a new paradigm, in keeping with humanities trajectory to surpass all forms of economic imperialism and big business monopolies, is the path of skilful investment. It is necessary to align ourselves to evolution and what will support humanity and ecological diversity. That is renewable energy in a configuration of distributed generation and distributed storage. Getting the backbone in place and filling in the gaps.

      • Askgerbil Now

        I just pointed out what looks like a misunderstanding about the specification of an energy storage component of the South Australian plan.

        When battery storage is much cheaper and the crisis in energy security is less immediate, different configurations of the electricity system will emerge.

        In the present circumstances and market, it is likely the South Australian government, making the “best of a bad situation”, chose a compromise design that will do the job at a reasonable cost before next summer’s heat waves arrive.

        The small gas turbine may eventually be adapted to be a hybrid generator powered by concentrated solar thermal energy and renewable natural gas. This type of hybrid solar/biogas renewable energy power station is already available commercially. See “Israeli solar-biogas technology developer Aora Solar will develop renewable energy installations in Ethiopia”.

        • humanitarian solar

          I can’t see why its a “bad situation” given air conditioners in summer can be easily powered by more sun and a few batteries. Developing new systems is a developmental process and needs to begin ASAP. The national discussion is presently at a tipping point of acceptance of storage as having an increasingly important role and needs investment to support it.

    • Ian

      You are not comparing your apples and oranges very well. The 250MW gas plant costs $360 million, the 100MWH battery array $20 million. If you had $360 million to spend on batteries then such an array would be 1800MWH which is equivalent to your gas plant working for 7 hours – not perfect but a lot better than what you have implied 😉

      • Askgerbil Now

        Current lithium-ion batteries wear out relatively quickly. They are also dropping in price each year. It’s better value to buy some each year, taking advantage of the falling price to get more storage, and not having them all wear out and need replacing in the same year.

  • Steve Jordan

    Maybe that new peaking gas power station could be called Chippie, in that SA will be able to use (the existence of) it to ‘keep the bastards honest’!

    Whatever you might say about Jay Weatherall, he is not sitting on his hands and moaning about the problem; he is getting his hands dirty trying to develop generation and distribution system that the SA people will be grateful for in years to come.

    • Shane White

      Grateful for the continual consumption of fossil fuels while the planet warms, sea level rises and coral dies. What are you on Steve?

  • Richard

    Has everyone missed it. If Nuclear in this country wasn’t already stone dead after the Royal Commision in SA. It is now also dead, buried and cremated(thanks Tony).

    We can also thank AEMO for shooting fossil/nuclear in both feet, by deliberately hanging SA out to dry and blaming renewable. Some moron from a fossil background in charge, over too many whiskies, thought it was a great idea. I bet!

    Long live Weatherill. At least Australia has one visionary courageous leader.

    • Shane White

      “Long live Weatherill. At least Australia has one visionary courageous leader.”

      Spending money on a new fossil fuel power plant in 2017 is visionary? WHAT THE? I don’t think you’re being sarcastic?

      • Richard

        It’s a government owned back up plant. It’s designed to reduce volatility and gaming of the market by private forces. And sabotage of it’s power supply by corrupt national regulators out to destroy states that pursue high penetration of renewable energy.

        Let me guess, you are a nuclear supporter or a green.

        • Shane White

          I’m someone who understands the dangers of climate change and the urgent need for emission reductions. To alter an energy system and thereby build a fossil fuelled power station is insane, not visionary.

          • Richard

            Open your eyes. South Australia is on par with places like Denmark when it comes to leading in the transition to renewable energy. You can’t just flick a switch and make it happen especially when you are dealing with vested entrenched monopolies and corrupt national governments doing there best to delay and destroy renewable energy.
            Look a bit deeper, think a bit wider and understand how hard it is to get this stuff done and then you will get a grip on why Weatherill is a national hero.

          • Shane White

            “their” not “there.
            National hero now! How about TomK? Is he a national hero too, or does he have more work to do? Just trying to keep up. Cheers.

          • Richard

            Probably better for your cause if you drop the smart arse.

          • Shane White

            40% of SA’s power from renewables is terrific. Our governments now need to acknowledge the climate emergency, plan objectively considering *all* options and act urgently. This isn’t being done. Instead Weatherill and Co plan to spend $300+ million to alter an energy system without addressing the emergency. Simultaneously they’re pursuing off-shore oil extraction and terrestrial unconventional gas. There’s no excuse for not acknowledging the emergency, and further extraction of fossil fuels is utterly unconscionable; it’s a crime against nature and future generations.
            Richard consider reading this article -http://onlinelibrary.wiley.com/doi/10.1002/2016EF000392/abstract
            Click on the PDF icon in the top left. The article is short and conveys the urgency we’re not recognising.

        • Shane White

          From https://www.theguardian.com/australia-news/2017/mar/14/south-australia-to-build-battery-storage-and-gas-fired-power-plant-in-550m-energy-plan:
          “Incentivisation of increased gas production to ensure more of the state’s gas is sourced and used in South Australia

          Creation of an energy security target to require a proportion of power used within South Australia to be generated within the state.”

          Should we have an emissions reduction target? Nah, but let’s increase fossil fuel production and have an energy security target.

          Yes visionary, truly visionary.
          Welcome to Hicksville.

          • Richard

            Could you be more moronic. They have serious problems with energy politics that need to resolved asap, like before next summer. This will take the fossil gaming out of the market and they are already world leaders in renewable energy production. So you have a pointless argument.

            Tell me, where is it you want to build your Nuclear plant?

          • Shane White

            Did you intend to place a question mark after “moronic”, or was that a request? Nice.

            Anyhow, we have a climate emergency and to spend hundreds of millions of dollars on altering our energy system without taking that into consideration is irresponsible. World leaders? Reference? These would be the same world leaders pursuing Bight oil and fracking then? The world is on track for 3.5C of warming as a result of leadership so nothing to hold in high regard there.

            Perhaps nuclear is our best option? Let’s consider it objectively. A safe climate is our only priority, such is the mess we’ve placed ourselves in.

  • JoeR_AUS

    With gas available and the Snowy Hydro 2.0 you don’t need to spend a cent in SA!

    Good news for SA people, Cooma and renewables

    • Rod

      Snowy 2.0 is 5 years away?
      Just because Trumbull says gas is available doesn’t make it so.
      SA will be in dire straights next Summer if not sooner.

      • JoeR_AUS

        Well half cup empty, the SA government GAS powered plant wont be ready either and yes it needs GAS as well….

        The GAS has been guaranteed and the Government will mandate volumes for local consumption, this will enable Pelican Point #2 to be powered up at no infrastructure cost to SA.

        This is a legacy problem of cheap brown coal in VIC and letting go of all its Bass Strait Oil/Gas Reserves for export

        • Rod

          One of the reasons Pelican Point 2 was idle during the recent load shedding was due to the gas price. Not much Trumbull can do about that.
          Ideally they would be keen to sell Pelican Point 2 at a bargain price.
          Maybe the threat of competition will prompt them.

          • JoeR_AUS

            agree, three problems

            1 Gas to export market
            2 Peak Demand is highest electricity price
            3 Sun setting Coal mines and not doing enough before

            They need AEMO to be bound to supply 100% demand and the closet power plant needs to be mandated to turn on even if it lowers the price by bringing on an extra power plant or have fines that make it not a choice.

  • humanitarian solar

    In practice 100MWh of storage lasts much longer than “100MW for an hour” if co-located with co-generation projects like wind and solar. The battery only needs to supply a shortfall and if setup properly, the shortfall should be zero for the vast majority of the day and year. For example, if there is a power outage when the wind is blowing or the sun is shining the battery doesn’t feel an effect from the outage. This is why integrated systems of distributed generation and distributed storage offer the community the most resilient, cost effective and reliable grid. All the technology really does work best as a whole system rather than added piecemeal in the conception of the majority of analysts or ARENA.

  • b ross

    Great article and I agree with Steve’s comments. I am impressed with the SA government.
    However as a former Snowy engineering manager, I think the announcement this morning by Turnbull regarding a new pump storage scheme for the Snowy is pure nonsense. It – to me – proves the political astuteness of the Weatherill announcement.

    • Askgerbil Now

      The Turnbull Government makes of habit of knee-jerk responses to problems that it has sat by watching emerge for years and then retracts the idea as soon as it it criticised by the Abbott faction.

      Last week Turnbull was still touting “clean coal” as the answer to its energy security policy vacuum.

      Yesterday the Turnbull Government was attacking the South Australian Government for taking action before the Finkel Review was completed. That review wasn’t completed overnight, meaning this morning’s announcement has had no considered analysis whatsoever.

      • JoeR_AUS

        When you have time, perhaps you would like to discuss how Vic benefited from cheap brown coal and let go of all it Bass Strait Oil/Gas Reserves for export – which is the preceding events to VIC, SA sun setting there Coal power stations which led them to SA power outages.

        • Alastair Leith

          If you can convert that to a grammatical sentence or two I can answer it.

          • JoeR_AUS

            Sorry, was in a hurry, try repost now.

    • humanitarian solar

      Does the Snowy really need to be “supercharged” to add additional peak power? What does it really need to play an effective role in backing up renewables?

  • humanitarian solar

    Just to clarify, is the plan to setup the battery storage then configure the system to automatically deliver AC into the grid when the frequency needs to be stabilised – on the grounds the rules enable state Ministers to put emergency measures in place if the AEMO fails us??? If this is the path chosen, batteries and co-generation projects like wind and solar could power the grid from renewable energy when the sun is shining and the wind is blowing and have a provision of backup when there is a shortfall. Is this what Energy Minister Koutsantonis and Jay Weatherill are referring to with enacting their emergency powers to ensure grid reliability??? Regional batteries and co-generation renewable projects could provide this kind of baseload grid backup very easily.

  • Shane White

    SA’s power plan is simply a plan to polish a turd. It addresses power reliability but does nothing to address emission reductions in accordance with the science. Global temperature now exceeds that of any time during the Holocene and is now considered by James Hansen to be equivalent to the maximum temperature of Eemian (the previous warm period prior to Earth’s last ice age), when sea levels were 6 to 9m higher.
    Just over a fifth of The Great Barrier Reef died last year and what survived is now bleaching again. Arctic sea ice continues to plummet and studies of Antarctic glaciers suggest that glacial retreat may have begun that would be unstoppable, causing the West Antarctic Ice sheet to collapse and melt into the ocean raising sea level metres.
    Clearly no carbon budget remains and emission reductions are now so urgent that their rate is without historic precedent. But we have left action so late that emission reductions now will not be enough and massive amounts of carbon need to be sequestered, as described in the short article titled “The World’s Biggest Gamble”: http://onlinelibrary.wiley.com/doi/10.1002/2016EF000392/abstract
    The last thing we need is another fossil fuelled power plan, even one with a battery attached. To those enamoured by the battery, does it contain cobalt? If so was it sourced from the Congo by these men, women and children? https://www.washingtonpost.com/graphics/business/batteries/congo-cobalt-mining-for-lithium-ion-battery/
    Weatherill’s plan is a plan for Business As Usual: Make energy by burning fossil fuel.

    • humanitarian solar

      See comment of Steve Fuller.

      • Shane White

        Fuller writes: “At the same time it boosts the transition to renewables process which will reverberate around the country and beyond.”

        Yeh right. How about we plan rather than play games and hope?

        I see no plan to reduce greenhouse gas emissions in accordance with the science. That includes ALL transport by the way, including freight which is something nobody seems to discuss.

        • humanitarian solar

          It’s easy to lose hope though there is strategy involved and I think its at the can opener stage. In my mind I just want the can open. To use another analogy, it can be steered once the ship picks up speed. No one actually expects politicians to stick to what they say before the chief scientist tables his report anyway. At this stage it may just be a bunch of politicians running scared, justifying their existence to electors, by appearing to be doing something. The cards for the round of consequence are yet to land on the table. I can see if your a scientist, this process looks messy and ad hoc with little long term import.

          • Shane White

            All that matters is emission reductions. Therefore we must price carbon in an honest manner. As Hansen states:

            “It is not rocket science. As long as fossil fuels are the cheapest fuel, they will be burned.

            Fossil fuel prices can be made honest by collecting a rising carbon fee from fossil fuel companies at the domestic sources of oil, gas and coal, i.e., the domestic mines or ports of entry. If the money is distributed 100 percent to the public, an equal amount to each legal resident, it is revenue neutral. Thus it is not a tax and does not make the government bigger.

            A carbon fee makes fossil fuels more expensive, allowing clean energies and energy efficiency to compete. Almost two-thirds of the public, people doing better than average in limiting their fossil fuel use, would receive more in their monthly dividend, transferred electronically to their bank account or debit card, than they pay in increased prices.

            A rising carbon fee is the only practical way to phase down global emissions.”

            http://csas.ei.columbia.edu/2016/02/24/i-am-an-energy-voter/

          • humanitarian solar

            I’m not saying this isn’t the best solution because I’m not informed on the debate however it is difficult for poor people to save for new appliances and replace them before the products end of life. Recent data demonstrates the bottom 40% of Australians have no wealth at all or negative wealth. So the problem I see is such a policy would further disadvantage the poor who don’t own a home to make energy efficient and don’t have savings and react to things breaking down. So the theme is, how to engage with the national discussion and everyday Australians, in a way that makes sense and seems fair to them, including those already relative marginalised from the economic machinery, some of whom are now voting for populist politicians. So empathic approaches targeting the electorate need to be run alongside the science always.

          • Shane White

            Replacing appliances is irrelevant. The aim of a carbon fee is to price fossil fuels honestly, thereby making clean forms of energy more competitive leading to a reduction of emissions. Continuing to provide fossil fuelled energy while claiming any change to that would disadvantage the poor hides the cost of climate disaster – lost reefs, increased bushfire frequency and severity, flooded cities, mass refugee migration and reduced food crop yields.
            Reducing emissions and wealth equality are two different issues.

          • humanitarian solar

            No policy should disproportionately effect the poor. It’s skilful to find synergistic approaches which work in multiple contexts and why it is important to work in multidisciplinary teams.

          • Shane White

            You state it’s okay to continue to price fossil fuels dishonestly in order to compensate for policies that make some people poor, even if that compromises emission reduction rates? That’s absurd.

          • humanitarian solar

            I have no idea what your referring to. I’m saying do something about your intellect and learn empathy and policy positions suiting the collective evolution of the electorate we’re in.

          • Shane White

            Well if you want to discuss the poor, what about the poor in Bangladesh? Don’t they deserve the most effective emission reduction policy that we can put in place?
            You state the bottom 40% of Australia has no wealth or negative wealth (without providing a reference) but I bet the’ve all got iPhones, computers and cars, and are much better off than many in poorer parts of the world already exposed to climate disasters, with much worse to come.
            We have a responsibility as a country that has grown rich by burning and mining fossil fuels, to do everything we can for those in the poorer parts of the world. The LEAST we should do is to price fossil fuels honestly.

          • humanitarian solar

            Relating to the electorate and the collective evolution of humanity, including in the sub-context of Australia, is the fastest path. You keep thinking its about reason – intellect applied to data, and charting policies based purely on that. Clearly the electorate and politicians have a say in it. I’m merely pointing out, politicians need policies that win elections and target the electorate with policies and likewise we need to surrender to working in and with the national discussion. Giles is giving us a good example here. That’s what he’s doing. Working with the national discussion, not the absolute or best truth, a relative truth, a progressive truth, edging the whole thing forward in the fastest way it can go, like changing gears in a car, it’s necessary to go 1, 2, 3, 4 etc, even an EV needs to ramp up an electromagnetic field.
            http://theconversation.com/land-of-the-fair-go-no-more-wealth-in-australia-is-becoming-more-unequal-63327

          • Shane White

            Collective evolution of humanity? Ramping up to an electromagnetic field? What’s going on? I think I had better leave it there “humanitarian solar”; you’re creeping me out.

            Weatherill’s power plan fails to address emission reductions in accordance with science and equity. This maintains his position and that of his party as Climate-Laggards; continuing to build gas infrastructure and to pursue oil extraction in the Great Australian Bight, showing no concern for the plight of coral reefs, the plight of the poor exposed to climate dangers in other nations and the state climate for future generations. Disgusting.

            Keep kicking the can down the road Weatherill.

          • humanitarian solar

            Try researching developmental psychology on the emergence of cognitive faculties. It’s a science. Applies to individuals and to society. If not interested in people, perhaps have a look at electric motors and how they work.

          • Alastair Leith

            Empathy doesn’t automatically make for good decisions. I’m empathetic with low income people because I’ve been one most of my life (partly by choice) and am one today. How does <10$K a year in the climate movement scrapping for campaigning gigs sound?

          • humanitarian solar

            Empathy is a higher level of development than the two polar opposites of sympathy and detachment. Empathy is the ability to help someone feel through their emotions without feeling like drowning, sympathy is feeling like drowning in the emotion with the person and detachment is the person who attempts to intellectualise the emotion or compared to yelling support from the side of a river to someone drowning. Gender roles are often involved. In counselling, if the person uses lots of feeling words and has strong emotions the counsellor begins there, whereas if the person is intellectually detached, the beginning is relating to how the person sees the problem and their worldview. People priding themselves on intellectual development will look down on feelings and vice versa.

          • Alastair Leith

            Not in disagreement with that. That doesn’t challenge my assertion that empathy for others does not automatically make for good decision making in public policy. Obviously you’d hope it’s there, otherwise we’re talking about the kinds of psychopaths that seem to litter Australia’s workplace management and governance class.

            It’s a rhetorical slight of hand by you to switch the discussion from an argument you are losing to the character of the person you were losing the argument to. Not good.

          • humanitarian solar

            Para one is sympathy.

            Para two, it is necessary to acknowledge the gravity of societies awareness rather than being a one trick pony banging on and on for one policy. It’s common in intellectuals who see their tiny piece of a puzzle as more important than anything else, forgetting others may not share their narrow interest. The original topic is what SA is doing and I don’t remember emissions trading being mentioned in the article. That’s all I’m pointing out. So many people on this site, most of whom are intellectuals, get here and bang on about their thing. They’re not alone. ARENA with their largely ideological stance on tackling global warming without developing integrated RE/storage, the Greens hammering Hanson and Trump voters, etc etc, it’s a stage in development. Predictable. Ditto love beginning with ones child, to broader family, tribe, society, nationality, surpassing ethnocentric factors, arriving at a sense of regard for humanity and the environment. If you neglect what I say, it will make your own advocacy and environmental work less effective, because you won’t recognise the part of the community receptive to your efforts. Hard lessons.

          • Alastair Leith

            You continue to talk around the issue we’re discussing and throw in some generalisations about people you don’t like for good measure. Good Luck, humanitarian.

            You are making a MASSIVE assumption about what ARENA likes to fund and doesn’t (they’re funding a bunch of battery storage and micro-grid developments today) and about how much RE can be put on the grid without resilience and security issues.

            The simple fact of SA’s energy woes is that their OCGT plants are (now) privately owned and a) gaming the bid/settle market by withholding the very dispatch services they we paid for to do and b) happy to on-sell their gas contracts to the highest bidder, especially if it gives Renewables a bad name in Australia and the opportunity for their conservative mouthpieces in Parliament talk rubbish about renewables.

          • humanitarian solar

            I’m interested in renewable energy with storage, facilitating local communities being more resilient. Im not really interested in the kind of big projects ARENA does.

          • Alastair Leith

            It didn’t. Overcompensation occurred in lowest tax bracket and pensions, which actually address some of the structural decline in income of the poor too, so it was a net windfall for poorer people.

          • Alastair Leith

            And yet again somebody missed the point of a carbon fee (stupidly named a carbon tax) thinking it’s about stopping our grandmas using the heater in winter and freezing their arses off. It was never a consumer side mechanism, the cost difference at point of retail was too marginal for that. And the compensation more than covered it for low to almost no income people (like me). It was to make renewables marginally more profitable to increase their deployment on the grid and in the bidding market. And for industrial users of energy.

  • Benjamin Greig

    https://freesolarandstorage.com.au/ It is free so where is the issues with the government taking this up also? At least the public stops paying and paying…