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Turnbull’s power play: Snowy 2.0 vs battery storage

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Prime minister Malcolm Turnbull has some front. On Monday, in the first Question Time of the parliamentary year, Turnbull was asked about the Greens’ proposal to buy back the grid and put a cap on returns to reduce prices.

Turnbull puffed himself up to his full importance:

“Mr Speaker, it’s got a certain retro aspect to it. I think we have all learnt that nationalisation and state intervention of that kind has not been successful. I know in the Greens Party they hanker for the good old times. They want to get back to the USSR but sadly that’s all over from their point of view. Happily for everybody else.”

This, from the head of a government that is proposing, against all advice, a taxpayer-funded new coal generator; is trying to stop a private company (AGL) from closing its ageing clunker (Liddell); and now wants to spend $8 billion building Snowy 2.0, and changing the market rules to justify its economics.

The Greens’ wish for a nationalised grid (shared at least by Labor in South Australia) may hark back to a generation past, but so does Turnbull’s own agenda.

There is a distinctive Soviet-era mentality that insists on a centralised solution and government intervention for the national electricity market. It doesn’t just fail to reflect modern thinking, it ignores technology developments and basic economics.

What’s more concerning is that Turnbull seems determined to turn this aspect of the energy debate into a battle between his own vanity project, Snowy 2.0, and battery storage.

This is not just borne out by the barbs between Turnbull and energy minister Josh Frydenberg and their South Australia’s counterparts over the Tesla big battery and the even bigger Tesla virtual power plant. It is coming out in commissioned reports too.

Last week, a report from consultant Marsden Jacob appeared on the website of Snowy Hydro, the gen-tailer owned by the federal government and the NSW and Victorian governments, and which Turnbull would like to buy outright. CEO Paul Broad is anxious to be in lockstep with the PM’s vision.

This report – you can find it here – is depressing for a number of reasons.

Firstly, it states that one of Snowy 2.0’s objectives is to “improve the economics of coal-fired generation.” As ITK analyst and RenewEconomy contributor David Leitch observes in this separate piece, that’s not necessarily what people want.

Further, the report acknowledges the worst fears of the critics of Snowy 2.0 – namely that as a result of its construction, emissions will likely rise, coal-fired power plants will be used more, and the roll-out of battery storage will be deferred and reduced.

You can see what the intention is here. To understand the thinking, you have to hop into the old school view of the power grid: one dominated by centralised generation and thermal power plants.

Wind and solar are dismissed throughout the report as “intermittents” (the word is used on 67 pages of the 150-page report), while decentralised generation, the phenomenon recognised by grid operators around the world, including Australia, as the future of grid supply, is brushed aside and ignored.

The paper is sloppy in the extreme in some places.

Graphs are repeatedly mislabeled or repeated. South Australia, for instance, does not have nearly 7,000MW of “intermittents” in its grid; the authors do not seem to be aware that the standard wind turbine is already above 3MW; they blame wind and solar for disrupting the grid; and they don’t seem to be aware that the 44MW solar thermal boosting plant at the Kogan Creek power station was never built.

Indeed, the report summarily dismisses solar thermal – despite a brief reference to the 150MW solar tower plant with storage to be built at Port Augusta – on the basis of its analysis of the Ivanpah plant in California, which has no storage.

“Given that the only other viable and potentially large-scale storage technology is battery storage,” it writes, it goes on to assess the relative merits of Snowy 2.0 and battery storage.

But it’s a bothersome comparison, because the Snowy 2.0 finances are not revealed, while the report cites improbably high battery storage costs.

It relies, for instance, on the 2015 battery storage cost estimates from Lazard, the investment bank which has since produced a 2016 and 2017 version where the cost of storage has fallen considerably.

Its estimates for battery storage installation costs – $1,800/kW (sic) – are probably nearly four times the cost of the recently installed Tesla big battery.

That may explain why it gets such ridiculously high estimates for the delivered cost of large-scale solar and storage: solar and storage would cost between $326/MWh (four hours storage), and up to $730/MWh (12 hours storage)

That is in contrast to the tenders received in the United States by one of that country’s biggest utilities that showed the median (mid-point) of bids for wind and storage and solar and storage at one-tenth of that price.

Granted, those US bids may have been using less storage, but that also recognises that you don’t need to turn “intermittents” into conventional base-load generators to maximise their benefit to the grid and the consumer.

It requires a different way of thinking about it. Michael Liebreich’s description of “base-cost renewables” shows where the smart thinking is heading.

But the authors clearly think it is “us or them” on battery storage. They assume that if Snowy 2.0 goes ahead, then the rollout of battery storage will be cut in half.

(Compare this to another graph where it expects more than 4,000MW of gas generation to be installed even with Snowy 2.0).

And yet it makes no effort to contemplate the roll-out of small-scale storage that the likes of the CSIRO, the network owners and the Australian Energy Market Operator see as inevitable, and which would surely affect the prospects of the $8 billion Snowy 2.0.

And here’s another aspect. What are the consumer benefits of Snowy 2.0? The modelling, with little explanation, suggests a cut in wholesale electricity prices (just one component of a consumer bill) of 3 to 5 per cent.

What are the benefits of the Tesla virtual power plant in South Australia, linking 50,000 homes with rooftop solar and battery storage? A cut in consumer bills for those in social housing of one-third, and a similar reduction in overall wholesale prices.

And, just like so many reports, the authors defend the project in question by retreating not just to old-fashioned energy concepts (the idea of distributed generation is largely dismissed), and some out-of-date technology and cost assumptions.

How could the Snowy 2.0 consultants get it so wrong? This is not the first time that Snowy 2.0 has waged war on battery storage – we highlighted a set of ridiculous assumptions that formed the basis of a Chanticleer article in the AFR last year.

It may be that there is a solid argument for Snowy 2.0 – and there are many who wish that there was, particularly if it was accompanied by a highly ambitious renewable target.

But this report is not it. It seems more concerned with stamping out competition. Turnbull, Snowy Hydro’s Paul Broad, and the consultants are going to have to do better than this.

There is potentially one redeeming part of the paper, however, and that is its defence of Snowy 2.0; not on its own economics (it doesn’t discuss them), but on so-called “market benefits” which it compares to the regulatory test used for network investments (RIT-T and RIT-D).

This actually might not be such a bad idea, and one that might be welcomed by the storage industry. As Leitch further notes in his analysis, the authors assume Snowy 2.0 is the only choice among pumped hydro.

But there are plenty of other projects around the country, excited by the research of the ANU’s Andrew Blakers and at Melbourne University.

A regulatory test – let’s call it a RIT-S – might encourage an independent regulator to weigh up the respective benefits of pumped hydro and battery storage, and of the various projects: the monolithic Snowy 2.0 (there is even talk of a Snowy 3.0 with more pumped storage); smaller pumped hydro projects scattered across the country; and distributed and large-scale battery storage.

Now that would be a test.  

Pocket
  • Jay from SA with his privately funded VPP has snookered Malcolm from Point Piper with his tax payer built pumped hydro. Love it.

    • Patrick Comerford

      Agreed this is what makes Jay Weatherill such an impressive Premier. Doesn’t take crap from idiots makes logical progressive decisive decisions to tackle a problem head on, is thoroughly genuine and has a VISION. Makes Turnbull look like a real tosser.

      • fehowarth

        Only look like?

      • John Saint-Smith

        Make that ‘unreal’ tosser.

    • Marg1

      It’s a shame Jay isn’t the PM – he’s sure leading the way for renewables for our nation isn’t he.

  • howardpatr

    Turnbull – both a hypocrite and a liar. Many see less than $200 a kW in not too many years; not the $1,600 a kW Turnbull has the audacity to quote.

    This is what the Norwegian Government supports while Turnbull and the Coalition support Adani.

    http://northvolt.com/

    • Joe

      It’s all about…Change.

      • Ken Dyer

        Yes. In Turnbulls case it is all about short change. And the taxpayer suffers.

    • Brunel

      I love batteries but how many cycles can it do if it costs $200/kWh?

      Remember, the weekly cycle Powerwall was cheaper to buy than the daily cycle Powerwall but the daily one can be cycled 3650 times and therefore stores electricity more cheaply.

      Heck, the weekly cycle Powerwall was discontinued.

  • Peter Campbell

    “one of its objections is to “improve the economics of coal-fired generation.”” Typo, I think. Should that be ‘objectives’?

    • Yes, fixed. thanks for heads up.

  • Chris Jones

    It’s all very disappointing because Snowy 2.0 could provide exactly the energy demand required to kickstart a couple of gigawatts of renewable energy development. Instead it simply throws coal a lifeline – allowing generators to run at higher outputs for longer, with part of that power going to pumping water uphill.

    • Hettie

      Although, by the time they’ve drilled through all that very hard rock, there will have been a change of government, and it is likely that coal will not be the pumping fuel.
      Possibly.
      Maybe.
      Perhaps…..

      • Joe

        Ah yes, those rocks. This is the new battle ground with the environmentalists…where to dump all that drilled rock…..tonnes and tonnes and tonnes of the stuff. In a lake is a proposal that is not being warmly received. No doubt the EIS will give a big thumbs up so that Two Tongues Turnbull can bring his wet dream to fruition.

  • JIm

    Hope it is not too long to see if all of the major contenders in SA Election have got behind batteries. We have Jay’s plan, SA Libs’s with subsidies to households, still waiting on SA Best. Tri-partisan support for batteries would be a good answer to Turnbull.

    • Rod

      Marshall’s plan is means tested and as far as i know there was no plan to aggregate them. Means testing would guarantee failure IMHO.
      The No Pokies guy thinks wind turbines cause brain cancer so that would be a “no” from me.

      • Joe

        Nitwit Xylophone hates the wind. Whenever a breeze starts a blowing he runs for cover. He is the dude that helped give us ‘The Wind Commissioner’ . Our wind chief has spent the last couple of years scouring Australia for ‘victims’ of wind turbines. He’s looking very hard to find one but then Australia is a vast land and he has plenty of time to do the job.

        • mick

          yep its all about the hair

  • Chris Drongers

    I read just this morning an article on batteries for electric cars that suggested costs of $100/kWhr in around a year from now.

    Hard to believe that if OEM batteries are available to vehicle makers they would not be available at similar cost to large grid support or 250 MW virtual power station contractors.
    Elon might prefer to use his own batteries in SA but if cost and supply drive it, TESLA stickers are cheap.
    $100/kWhr domestic batteries would really shake things up.

    • Mike Westerman

      Note this is the battery cost only, which is a fraction of the total cost, once inverters, BMS, switchgear and installation are factored in, plus a STACOM and substation for grid connections. Current estimates for future battery costs don’t seem to be factoring in future material costs or recycling/disposal costs for very large volumes (ie order of magnitude step ups) of battery utilisation.

      • Chris Drongers

        There is something very wrong, and not talked about a lot, if the installation of a domestic 20 kWhr battery cost five times the price of the battery itself!
        Being domestic, small installation on a local distribution network not a lot of substation changes needed, smart meters and smart inverters would keep line currents and voltages under control.

        It would be very unusual if material costs rose substantially before an alternate battery chemistry was used. Could even go to putting a Redflow battery at the base of the pole with each local transformer.

        My interest is in seeing where the economic sweet spot is between fully distributed generation with each house having the maximum number of panels and its own battery feeding excess power to the grid and the centralized model of large power stations and storage (batteries or dams) a long way from the point of low voltage consumption.

        The former seems wasteful of money due to relatively high unit costs, the latter doesn’t capture value for the householder.

      • neroden

        Tesla’s driving inverter prices down too — not many people seem to have noticed.

    • itdoesntaddup

      Link to your article you read? Sounds like wishful thinking rather than anything else.

  • Mick

    … $1,800 / kW doesn’t actually sounds too far off the money for the Tesla megabattery. Have heard cost estimates as ranging from $200 million – $240 million (…which would be $2,000 – 2,400/kW)

    • You are in a fantasy land. The Powerwall 13.5kWh retails for $10,000. So I am not sure how you figure that the Powerpack, much larger, greater efficiencies, would sell for up to three times the per kWh cost. No idea where you get you $240 million estimate from.

    • mick

      mate you will be getting flogged for some dumb stuff i come up with too

    • Nick Thiwerspoon

      Musk stated that the big battery in SA cost US$50 million for 129 MWh of storage. Which is US$387/kWh. The Tesla Powerwall, their retail battery, costs A$10000 for 13.5 kWh, which works out to A$741/kWh, but that includes the inverter and GST. BTW, battery costs are falling by 23% per annum, which means they will more than halve over the next 3 years.

      • Mick

        Yes – but note units. $10,000 might be $741/kWh, but it is also $2,000/kW, since they are 5kW units. The $50million dollar figure is certainly not the full cost of the project. As above, am open to seeing the full cost actually is.

        • Nick Thiwerspoon

          Why does that accounting make any sense? A sensible costing is either the cost per kWh of storage or the cost per kWh delivered (in effect the LCOE) With the Powerwall that’s 10000/13.5/365/10 (assuming a 10 year life, though there’ll be plenty of juice left after even 15 years). Which is 20 cents/kWh. My retailer is charging me 35 cents/kWh, including GST. Even at **current** battery costs you’re saving a shitload.

          • When assessing the cost of energy storage it’s necessary to know both the storage capacity (in kilowatt-hours) and the maximum delivery rate (in kilowatts).
            Some applications only need a small amount of energy, but need it to be delivered very quickly. Other applications need a large quantity of energy storage and a delivery rate that would see the stored energy last perhaps for several days – a relatively slow rate in comparison to the large quantity of energy.
            The number of times a battery can be charged and discharged before it needs to be replaced is also needed to accurately compare the purchase prices of different energy storage options.

          • itdoesntaddup

            You are forgetting that the battery and inverter consume power, as well as ignoring battery performance degradation, and you are also ignoring the cost of financing a $10,000 investment, or the likely cost of having to replace the inverter in less than 10 years.

          • Nick Thiwerspoon

            No, I am not ignoring battery degradation. That’s why I assumed a 10 year life. In fact, the Tesla car batteries (same technology) appear to have very low rates of degradation ( http://volewica.blogspot.com.au/2017/08/how-long-will-your-tesla-battery-last.html ) so the life will likely be even longer

            You can ignore the cost of financing if the rate at which retail electricity prices are rising is equal or greater, because the formula for LCOE is present value of total costs divided by present value of electricity generated.

          • itdoesntaddup

            No you cannot ignore the cost of financing. You are entitled to discount it at the relevant discount factors for the timing on which the costs are incurred, as you do with all the other costs, but that is all.

          • Chris Schneider

            You are missing the cost of the solar. Two calculations need to be made there. What the 20 year cost of the panels is. also what the feed in tariff is. both give you a different idea of benefit but they are important.

            If your feed in Tariff is like mine 14c that would mean 34c not sure 1c has value, but my rate is also 33c so I would loss 1c per kWh.

            on the other side is the cost of solar on your roof, which is a lot more complex to work out.

        • neroden

          Absolute arrant nonsense — the $50 million is absolutely and certainly *larger* than the full cost of the project. It was stated in the context of “how much money will your stockholders lose if you don’t get this done on time and have to deliver it for free”. He’s not allowed to lowball that number, under securities regulations in the US.

          • itdoesntaddup

            Gross that up for tax.

      • neroden

        Musk specifically said that they would lose “about $50 milllion” (US) if they had to deploy the battery for free. So the all-in cost of the battery, *including inverters, installation labor, and sitework*, and *including any rush transportation charges* for the short timeline, was in the ballpark of US$387/kWh.

        He’s quoted the retail price of the batteries themselves at $250/kWh.

    • BushAxe

      HPR was around the $100m, the Dalrymple one is $36m bearing in mind it will also be setup to work with the nearby wind farm as a microgrid.

  • johannes

    Giles probably should’ve included all of Table 22 from the MJA report – only the top half of it was pasted into the article. The estimates for battery storage costs for 2032 have been included. It’s anyone’s guess how likely they are to be correct.
    As commenter Mick has already pointed out, the figure of $1800/kW seems about right on the basis of the HPR battery cost.

    • neroden

      No, it’s not — it’s a nonsense price. Quoting “per kilowatt” makes no sense for storage. Cost per gerbil makes about as much sense.

  • Steve159

    how about we forgo the ban on cloning humans, and clone 1/2 dozen or so Jay Weatherills, just enough to fix this country up. Then back to the ban, in case some RWNJ thinks about cloning Abbott, or Abetz.

    • mick

      also look at retro active abortions

    • Brunel

      I actually read that as “clothing humans”!

  • solarguy

    Turdbull, clearly isn’t about advance Australia. He’s into big porkies to hoodwink the voters so they vote for the COALalition and keep his big business mates happy at the expense of the poor.

    What an arsehole!

    • Marg1

      “What an arsehole!” Spot on!

      • Alex Hromas

        Arseholes are useful try living without one please don’t denigrate these useful anatomical items by comparing them to Turnbull

    • Brunel

      Then the left wing needs to have UBI in their manifesto in order to help the poorest voters.

      • solarguy

        “UBI” ? Please explain.

        • neroden

          Universal Basic Income. Basically, everyone gets a check every month (a bit like social security systems) — except it’s *everyone* in the country, every age, rich or poor.

          It’s a safety net for when things go bad for people… without all the hideous paperwork and bureaucracy.

          • solarguy

            THANKS.

        • Brunel

          Universal Basic Income:

          https://youtu.be/kl39KHS07Xc

          • solarguy

            Cheers.

  • Tom

    Giles, I like your RIT-S idea.

  • Chris Fraser

    Regardless of where the pumped hydro storage is constructed, if a renewable generator successfully bids to put water in the storage volume (just because they are cheaper than coal), does the renewable generator then obtain an equity stake in the wholesale price of that potential energy when it is eventually consumed ? I would have thought so …

  • Chris Schneider

    Storage is Storage is Storage. This is NOT a lifeline to Coal. It’s energy storage. Solar and wind are quickly becoming the cheapest way of producing MWh even for built plant. This Snowy project will remove the one issue people complain about as it will mean consistency. This plus all the other pieces will allow 100% renewable whether people like it or not. It’s not tied to Coal! Why would someone spend more money on coal than they can on solar panels? not going to happen! There are though some stupid people that need to see this as some coal thing. Cause they are stupid. Once it’s built it will be solar and winds best friend! let the crap talk keep going the results should be all we care about!

    • Snowy Hydro 2.0 will need a substantial upgrade in grid capacity to move renewable energy into and out of storage. The cost of grid capacity is the largest cause of electricity price increase in Australia over the last decade.

      As a result it will make renewable energy more expensive to the advantage of the alternatives like coal.

      Distributed energy storage would reduce electricity prices by avoiding the need for grid capacity upgrades. This would make it more difficult for the alternatives to maintain much market share.

      • Chris Schneider

        Actually funny you should say this, for multiple reason first. Don’t mention “into storage” as needing substantial upgrades, logic dictates that just proves you did think about your argument. But let’s ignore that.

        It’s actually quite hilarious you said this. The increase is distribution costs are more to do with…. the DISTRIBUTION not the connection of the generation. The centralised network we have always had hasn’t really changed (other than all the new connection to massive solar and wind parks in the middle of no where). Yes upgrades will need to occur but they will be quite minimal in comparison to the cost of running new connections to massive wind and solar farms. I don’t even know the current capacity of the existing connection, do you? There is a chance they are oversized.

        • Mike Westerman

          The constraints from Snowy are well known – check AEMO’s and AER’s sites for details. Altho’ the Snowy can transfer 3GW or so into NSW it is constrained to a bit over 1GW to Vic, and hence is virtually isolated from SA or Tas, and Qld-NSW constraints make it likewise a non-starter to support Qld.

          SA fortunately has plenty of PHES sites to solve its own problems, as has NSW. Vic is going to be challenged without better access to the other states and to the Snowy.

        • “Executives from Snowy Hydro Limited have estimated that an essential upgrade of power transmission lines from the mountains into Sydney and Melbourne will cost up to $2 billion.” http://www.smh.com.au/federal-politics/political-news/snowy-hydro-expansion-could-cost-double-initial-2-billion-estimate-20170523-gwb0vy.html

          That is why distributed generation and storage has a competitive advantage. Distribution costs are reduced rather than increased.

          • Chris Schneider

            Interesting Link. 2 billion is a LOT of money, some perspective.
            The subsidy for the Tesla battery was $50 million for 100MW/129WMH battery. let’s just use that number (obvisoulsy a lot less than the actual cost. 2GW = 20x100MW so 20x50million = 1Billion dollars. but the game changer is the 350 000 MWh storage! or 2,713 times the long term storage. So maybe you put the value better peak load and storage of half.

            2713x50million = 135.6 billion
            20x50million = 1 Billion

            (135.6 + 1)/2 = 68.3 Billion, yep still worth it! It’s the storage that is the biggest winner. This is a real game changer for Renewables and stops the argument of reliability. This will create the highest reliability in the network. We may find a better way of doing this, it’s kind of the point of the feasibility study! While ever 6H is the highest level of storage no sane person would ever entertain 100% renewables.

          • “The Port Lincoln facility will store 10 tonnes of hydrogen, equivalent to 200MWh” http://reneweconomy.com.au/s-a-to-host-australias-first-green-hydrogen-power-plant-89447/
            Energy storage technology is constantly innovating, steadily declining in price.
            Snowy Hydro 2.0 will not improve in cost or performance, ever. It will force up electricity prices – and keep them high till it is finally abandoned as a waste of money.

          • Chris Schneider

            Hydrogen is something showing some interesting promise. Let’s hope it’s a great idea. as I said there are new systems coming which could overtake pumped Hydro. The issue is your can’t say it’s a stupid idea in one article then say how amazing it is in another (look at the way S.A announcements were covered!)

          • Check your non sequitur: “The issue is your can’t say it’s a stupid idea in one article then say how amazing it is in another (look at the way S.A announcements were covered!)”

            Snowy Hydro 2.0 is an attempt to pour a lot of money into a large, inflexible white elephant that will quickly be overtaken by a range of rapidly evolving energy storage technologies – lithium ion betteries, reversible hydrogen fuel cells, redox flow batteries, compressed air energy storage, etc, etc …

          • Chris Schneider

            as a pose to smaller hydro plant which need to be built and flood large areas. At the end of the day we won’t know which is real answer until we see results.

    • John Saint-Smith

      I believe the ‘stupid people’ you are referring to are the shambolic front bench of the Lazy Negative Party, who wave chunks of coal about in parliament, saying, ‘Don’t be frightened’, and who haven’t had an original idea for 30 years!

    • Mike Westerman

      Storage, like most things in life, costs money. So the non-stupid demand best value for money ie lowest cost of storage. LCOS is calculated by dividing the present value of the asset by the MWh of storage that can be UTILISED ie not some fanciful dreamed up value of storage that potentially could be used: that figure would need to be multiplied by the probability of it being utilised over the lifetime. On every count, the non-stupid people conclude that there are many other more deserving projects.

      • Ian

        Mike ,you have been silent for a while on this Snowy deal, nobody seems to have listened to your arguments about the potential environmental disaster of pumping vast amounts of water between dams and the issue of under-utilised storage capacity. One wouldn’t mind so much if such a massive stranded asset was developed if it was someone else’s money, but 8 billion taxpayer dollars is an unacceptable opportunity cost.

      • Chris Schneider

        Can you give examples? 1414 seems to be the only other options for MWh, the others are great at MW but fail to hold enough energy to supply power during a still night. We need may different types of storage, once for the fluctuations in supply (clouds going over solar) but we also need storage for long term shortages. Something only Pumped storage can offer at the moment.

        • Mike Westerman

          There are literally dozens of viable 6h sites, with power ranging from 50 to 250MW (plus 3 I know of that are 1-2GW). These deliver LCOS around $70-90 including round trip efficiency. Snowy 2 can’t compete in LCOS with these for diurnal operations or with OCGTs for insurance. Great engineering project, but like the P76, a solution looking for a problem.

          • Chris Schneider

            6h sites are great but if we have a still week (I have been watch the current wind supply and we have them) 6H storage ain’t going to cut it. I’m looking toward a future of 100% renewables. This Dam is a great plan for future supply where we haven’t had enough good solar to charge 6H dams for a week and the wind isn’t blowing in enough areas. It’s also great for when we have too much wind and too much solar! Long term storage is an important problem to fix and this is the first plan to start addressing it. We can have shitty weather and the last thing I want it for this Renewable’s roll to stop because we had a few overcast still days!

          • Mike Westerman

            Chemistry is the best way to store energy for long term – biodiesel in OCGT is probably the cheapest. Wise investment puts the most dollars into the things with the best returns and most use. Yes there will be occasions when solar has dropped to $15/MWh (not far off) that there will be too much. Given how much of Australia is arid, there will be very very few days when there will be too little, so lowest capex standby plus paid for curtailment will yield the lowest overall cost. Nuclear and Snowy 2 are ruled out for the same reasons: too expensive, with side disbenefits.

          • Chris Schneider

            Any references to BioDiesel being cheaper than other forms of storage? I didn’t know you could create BioDiesel with excess power… Nuclear has many reasons why it’s none viable. Hyrdo doesn’t. with out links your comments remain opinion.

          • Mike Westerman

            You can create biodiesel from a wide variety of biological carbohydrates. The biggest challenge is finding feedstocks that are not being used to produce other things. Because humans are clean animals, they consume an incredible amount of soap and some of the best feedstocks for biodiesel are also used for making it eg tallow. Biodiesels typically can be produced from tallow at <$2/l. I will dig out the papers (from a few years ago). Biodiesel for standby is cheap running thru OCGTs because the capex is low and storage costs extremely low, while low capacity factors make running costs pretty irrelevant.

          • Chris Schneider

            so you’re not talking abput storage but instead something that has caused food shortages around the world and would create renewable turn downs. Interesting.

          • Mike Westerman

            No…I think that’s something you’ve irrelevantly introduced. 30% of food is wasted in our Western world, but even in the developing world where better use is made of primary production, there is ample supplies of waste to direct to biodiesel. The production of biodiesel from palm oil and similar edibles is entirely unjustified when most of the energy for the world can be derived from solar and wind. Tallow is a bi-product of meat production. You may argue that the western world eats too much meat and the environmental impact is large – I would agree: I prefer farmed fish and tempe (made from soy beans). But irrelevant to the amounts of biodiesel needed as reserves to meet unmet demand after surplus solar plus voluntary curtailment is taken into account.

          • Chris Schneider

            wasted after growing… but here is an article on that https://www.sciencedirect.com/science/article/pii/S0301421509000706

          • Mike Westerman

            Or byproducts like tallow: not many people up for eating bones, hooves or skin. Used cooking oil – another great source but the competition there is potting mix. In the Pacific, the coconut trade has been largely destroyed by palm oil plantations – the coconuts are still there, and their oil makes excellent biodiesel which can be mixed 50:50 with virgin oil. A very adequate and cheaper backup compared to batteries for microgrids.

          • Chris Schneider

            given your belief which is contrary to every invest maybe put your money where your mouth is

          • Mike Westerman

            How many biodiesel plants did you say you’d designed or built? How many pumped hydros? Or do you just like writing stuff? I speak from my own experience, and delivering value to clients, including having projects fail – which is always a blunt way of telling you where the envelope of viability is.

    • itdoesntaddup

      Snowy 2 is far too small to allow 100% renewables other than occasionally. For a start, it can’t deliver enough power, and secondly, you’d need 10-20 Snowy 2 sized storage locations to be able to deliver with no other backup.

      • Chris Schneider

        You don’t understand how this works if you think that. For one it won’t be the only Pumped hydro or other battery technology in the mix. Two it combined with the existing Hydro is MASSIVE! 3.7 GW plus the new project 2GW that’s 5.7GW! This in it’s self is almost enough to supply NSW during the low! NSW is the highest low in the grid. AEMO needs a min of 18.23 GW, so a substantially higher number than Snowy Hydro but it’s a major part of the picture! over 10% of the national supply requirement at night! by one project! It can sustain that level for 2 weeks I believe! The best part about pumped hydro is it removes waste from Renewables! Pumped hydro creates a variable of 2x ie it can vary the grid by 4GW! as too much wind or solar comes on it can take the additional supply and store it and push it out later. This means AEMO can use it to make everything VERY stable. QLD already has 500MW with 250MW going in in the next two years. The whole point of the grid is that no one project is relied apon. If it had more capacity you would be complaining the grid would have too much reliance on it. It’s a great addition to the mix.

        • itdoesntaddup

          I understand very well how it works. Perhaps you should do some real sums with some real data to find out, rather than chanting slogans. If you want to go 100% renewables, you will need to cover for extended periods of unfavourable weather – and there are limits to how much you can reduce storage requirements by the expedient of over-investing in generating capacity and putting in a massive investment in extra grid capacity to handle it all.

          • Chris Schneider

            Maybe what you need is a reading lesson. “This plus all the other pieces will allow 100% renewable whether people like it or not.” does NOT mean this on it’s own.

            you also miss the entire point! This is about the Storage at Snowy! (Snowy 2.0) it’s not about over investing in generating capacity (the last bit makes zero sense) Snowy is about handling for long periods of time (two weeks!) I spend a lot of time researching! I have put numbers into the reply of someone else. 10% of current requirements is MASSIVE! Not all of Australia will be still, we have 500MW is Queendland too, There are more on there way.

            It’s amazing this site covers “The Kidston Pumped Storage” in a positive light even though it will have 250MW @ 10 hours of production like Queensland’s other Hydro (the other is 500MW) but covers 2GW with a 2 week capacity as some kind of stupid idea!

          • itdoesntaddup

            I don’t just read what other people say. I test their ideas by looking at real data. You should do the same.

          • Chris Schneider

            OMG. enlighten us on how you tested the 2GW pumped hydro station that doesn’t exist!

            All i have been saying is facts listed in public records no testing required for that

          • That’s a good question Chris. We were very supportive of the idea when first mooted, because it looked like an opportunity to change the discourse.
            But it didn’t, rather than seize the opportunity to propose more renewables, the government has done the opposite. We question the economics, which analysts say don’t add up, and ask why the studies have not been released.
            We also see red flags when their own advice says it will result in more coal, more emissions, less renewables and less battery storage, effectively crowding out competition with a government funded project that requires rules and policies to be changed.
            Sorry if you don’t think we should be asking those questions,

          • Chris Schneider

            You should be asking the questions, but seeing through the stupidity of reasoning you see the real results a Pumped Hydro plant that doesn’t flood anymore land and doesn’t knock down many more trees. It is in simplest terms two pipes. They are not linked to Coal, Gas or Renewables. It is going to take a few years to build but once built will give more support to intermittent supply ie renewables. Sometimes in politics you need to read between the lines. If you can explain why a site with Zero existing infrastructure and no existing dam will be a better solution I’m all ear. Unfortunately there are a few morons in the Liberal party who can’t be seen to be supporting Renewables.

            You and I both know how important this dam is to consistent supply. I want more information about it just like you. Sometimes we are too expectant of fast information and there may be delays we don’t know about.

    • Cooma Doug

      You are right but still too kind to the few Snowy 2 haters.
      The thing about the energy grid is the complexity of the available products. There are products available in snowy 2 that dont exist in solar/wind/battery assets.
      Snowy already has stored 5000 Gwh of energy. It is released onto the market with established environmental and market controls. The snowy 2 project provides more of the same and none of it will be for sustaining any form of fossil fuel generation. Those products just dont fit.

      There are many products that will emerge in coming years but the thing about Snowy 2. It is combining peaking capability with substanial load shifting.
      It will increase the value of all large scale solar and wind projects. Solar and wind are very different in their product offer to the emerging market.
      Both are going to suceed.

    • Cooma Doug

      Well said.
      What is not said much is that Snowy already has a lot of pump hydro storage. We are looking at the equivalent tesla SA solar storage concept times 20. That is now without Snowy 2.
      But it is better than that already because the energy is available 24/7 without pumping. It makes load shifting available to solar and wind. This virtual storage concept has been around a long while. It is also better because of its solid location and access to Vic and NSW.
      A home can use its excess solar in a contract where the energy is effectively stored by leaving it on the grid. You dont need a battery and you dont necessarily need to pump. It is used by the retailer in the spot market and the energy is virtually stored for the solar owner.
      It is there, bid into the matket at the price making the concepy viable…while the home owner doesnt need a battery.

      Snowy 2 makes a huge difference. 100s of GWhrs of storage becomes available. It is there from day one without pumping. The pumping space also available 24/7.

      The limiting factor is the 4Gwatt output. Some folks will say its only 2Gwatt. But that is not so. It will have 4Gwatt available as generation and hundreds of Gwhs of storage.

      Think about solar/battery at the end of a radial feeder. It is not going to stack up in the difficult and complex fcas market that will sustain the grid. It will have very little to offer other than being self sufficient.
      So we cant grab a heap of battery and solar panel numbers in watts snd KWhrs and place it beside a HV grid energy and storage facility with access to all products.
      They are totslly different animals.
      The nature and value of a KWhr of storage on an integrated high density block of flats is probably delivering energy at half the cost of a home in the west.

  • Roger Franklin

    Dear Malcolm – 100% support the building of Snowy 2.0 as long as it meets the following criteria;

    1. Is designed, built, owned and run by Public Company (Not Govt)
    2. 100% of funding comes from non-public sources (i.e. No Govt Grants / Loans)
    3. All environmental concerns are meet (see Richard Di Natale for details!)

    While you mull over this, the stock market recovers and Richard gets out his list of 93759475 things that need to be ticked off, let the states get on with working with the various current and potential new players in the electricity generation market.

    My money would be on a new player entering the market offering a VPP solution, rolling out solar and batteries to households a location that has one of the highest power prices in the world, who has a manufacturing capability and is run by a friendly and supportive government who is more than prepared to give the status-quo a little nudge! Oh and I think they may have a head start.

  • Robert Westinghouse

    We need something done NOW – not when Snowy 2 gets built. S.A. has proved batteries and renewables work and work NOW. What we know NOW is: renewables are cheaper than coal, we need regional generation and distribution NOT centralised and we need batteries. And we need it NOW. My suggestions: 1) Increase subsidies on PV; 2) Increase subsidies on batteries; 3) Increase Feed-in tariffs; 4) take the Limit (of 5kw a phase) off PV. People are hurting…. but the LNP do not care.

    • Ian

      Agreed, the battery storage industry needs help to roll-out this technology. We already have a fantastic model of this working for Australia , namely rooftop solar, and battery storage is a natural progression of this industry. The same people that install solar are perfectly poised to install batteries. Jay Weatherill is doing something along these lines with his virtual power plant, Tesla is obviously the big name in that contract, the information is not entirely clear whether independent solar installers will be involved in that deal.

      • Robert Westinghouse

        Ian – exactly. Credit where credit is due regardless of your political bias. Jay is doing the right thing and he needs to be praised. Trumbil and his henchmen are just children…I have other words, but too early in the morning

    • itdoesntaddup

      Who will pay for the subsidies you are calling for? How big will they need to be?

      • Joe

        A carbon price on our Fossil Fueller polluters will do the job just nicely.

        • Robert Westinghouse

          Joe – perfect…more tax on diesel. Tax the Toorak tractors and the Mosman Mums in the 4WD Benz’s

          • Joe

            We need to get those Urban Road Tanks off the streets fullstop. They have no place on city / urban streets. I call them Mummy Wagon 4 Wheel Drive Death Machines….tax them out of existence I say.

          • Robert Westinghouse

            Agree. I suppose it is s certain type of person who needs such a BIG vehicle for the school run….As Top Gear proved, a well sorted Station Wagon (Estate) has more space than an SUV….not rocket science.

          • Joe

            SUV…..’Stupid Urban Viper’

      • Robert Westinghouse

        Mate…for a start we can stop excessive (like 10 billion dollars) spending on American military equipment (that is just USA). Cut the politicians salaries, stop propping up aging coal. Stop waste in the public service, stop the embassy gravy trains…goes on and on and on….

        • itdoesntaddup

          Ah, so it’s going to be tens of billions of dollars. Perhaps there are better ways to spend that sort of money?

  • keitaidenwa

    Snowy can supposedly store 350GWh of energy and it’s hard to see any realistic scenario where it would become competitive to store so much on li-on batteries. Besides, we are risk lithium shortage with electric cars alone. By building Snowy 2.0 there will be more li-ion available for battery storage in other countries.

    Otoh snowy can only output 2GW while NSW demand is much higher. So there is still plenty of demand for batteries and solar thermal for shorter term energy storage.

    • BushAxe

      By the time 2.0 is built other battery technologies capable of large scale storage such as flow batteries will be competitive.

    • Mike Westerman

      It’s harder to think of a realistic scenario where 350GWh is needed. And things that are superfluous to requirements are called luxuries, bought after necessities are provided.

      • itdoesntaddup

        350GWh is only needed if you increase the proportion of renewables and cut the available dispatchable generation so that it is no longer sufficient to provide close to 100% backup. I note you regard such scenarios as unrealistic, and I agree.

    • Ian

      350 GWH storage and 2GW of generating capacity. Cost $8 billion. ie $4000/kW . Daily cycling requirement roughly 8 hours for 300plus days a year: ie 16GWh economic storage: $500/KWH. Round trip efficiency 65 to 70%. The premise is that storage used intermittently, like once or twice a year becomes impossibly expensive, no matter what the device.

      Battery detractors seem to quote battery storage costs in terms of kW. ie Tesla’s powerwall $10 000 for 13.5kWh and 5kW = $740/kWh and $2000/kW. If all you are concerned about is the cost per kW then batteries are half the price. If it’s KWh that pull your chain then there is not much in it, considering that batteries can be installed in the home or business allowing 1. Islanding the premises in the event of a grid outage and 2. allowing grid demand management / behind the meter load management, 3. Zero transmission costs as distributed batteries are at the point of electricity consumption, 4. Batteries have greater round trip efficiencies 97% compared with 65 to 70% for pumped water storage.

      You might say that snowy2 has bloody big storage capacity, all free considering that the dams are already built and can provide 2GW continuously for a total of 350GWh, thus saving the nation from a complete renewables failure, well 2GW ain’t going to cut the mustard when 20 to 30GW are required. Other methods are needed to gain reliability 24/7. Most would confidently say that renewables can provide up to 80% grid electricity, without storage, before reliability is thought to be compromised. The most promising methods of ensuring renewables reliability is widely distributed generators and a mix of rain-storage hydro, solar and wind. Solar and wind are now so cheap, that they can be built to excess of requirements.

      To get some understanding of the economics of the snowy2 scheme as a business venture here are some basic calcs:

      If Snowy2 is used for 8 hours a day timeshifting coal, wind, solar or whatever, then a similar amount of time is required to pump all that water back up again, that leaves at most 8 hours of standby storage replenishment available a day (16GWh) . ie it would take 3 days to gain one day of standby storage , or to replenish 350GWh of pumped storage capacity 21 days. 21 days to fill,7 days to empty. 13 possible worse case standby operations a year. Income potential being equal, 365 days of time shifting daily cycling per year versus 13 standby cycles. Income opportunities for the standby part of the operation is 3.6% of the daily time shifting function. To earn the same amount for each function, arbitrage from standby must be 27 times as great as that from daily cycling. Assuming the cost of storing and releasing electricity on a daily basis is about 15c/kWh (out of a hat figure) then standby storage would cost 27 x 15c =405c/kWh or $405/MWh. If a home could earn $4/KWh from their powerwall 13 times a year how long would be required to generate $5000? ( to be fair, for the sake of comparison, half the cost of this form of storage is recouped from daily cycling, just like the snowy2 in my scenario)
      5000/(13.5 x 13 x 4) =7 years. Even as a standby storage device, distributed batteries seem to be competitive with snowy hydro 😊.

      • Krypton

        Easy to get the decimal point misplaced as I follow through your calculations. You did not use it in your calculations so it does not matter, but 405 c/kWh is $4050 /MWh, not $405.

        • Ian

          Thankyou, yes, you are right.

  • Radbug

    How Bill should hit the Jacob report. Don’t debate the details, until Malcolm does. Just launch into all-out abuse from the word go.

    • Kate

      You mean, act like a Liberal?

      • Radbug

        No, Kate, act like Paul Keating.

        • Kate

          Aah, so that’s who the Liberals learnt it from. Have to say, they’re poor students. PK was always amazing on debating the details. It helped that he had actual intelligence. 😀

  • Alex Hromas

    The fact that we get woolly thinking from the MAN who gave us fiber to the node, to the curb or anywhere but the point. This has been a huge success. Mention was never made of transmission upgrades needed to make Snowy 2 a success or whether alternative energy storage options would make better economic sense. This whole deal looks like becoming a huge white elephant. When it finally comes on line most of our coal fired power stations will be very near end of life and it will do nothing to change this .

    • Chris Fraser

      Of course but there will be many alternative energy providers by then to do the work of pumping. Happy days.

      • Alex Hromas

        You are right in that renewable generators will be able to send pumping power to Snowy 2 if the transmission systems are in place. The study barely mentions this the lower dam site has no HV transmission capacity and the cost of this has not even been mentioned it could be in the order of $B1.00. The obvious transmission upgrade would be the SA Vic intertie but again no mention except that Snowy 2 will help coal fired stations none in SA. My chief argument is that there has been no comparative study on other pumped storage systems which would be cheaper to build and connect. I suspect that we are going to build a very large white elephant. Malcolm already has form in this departement

  • Hettie

    To summarise the previous comments, Snowy 2 has all the hallmarks of a Turnbull project.
    Hideous cost
    Glacial speed
    Abject failure.
    By the time it is (if it ever is) commissioned, widely distributed PHES projects, using excess midday solar and overnight wind to pump the water uphill, will have been online for a couple of years, in some of the 22,000 suitable sites listed last year.
    Many large scale batteries will be in service.
    Many, many households and businesses will have behind the meter batteries.
    And Snowy 2 will be superfluous.
    Malcolm’s only talent, his gift for picking losers, strikes again.

    • daw

      ‘his gift for picking losers’ is that his secret to being a multi-millionaire and Prime Minister Hettie?

  • Cooma Doug

    Could someone on here explain the economics of pumping coal.
    Seems a lot of people think its a great idea.
    I spoke to some folk today who were a tad confused. They seemed to think the coal gens own the storage after they pump it. Not so.
    They get crap money to pump and zero benifit from the regen.
    In fact, the energy they pump potentially supresses the value of what they gen later in the profile.

    Pumping is not economic for fossil fuel gens. It was used when we had to keep coal gens IS at low loads in order to meet peaks. It was never a great business decision after the market started. Load shifting will lower the asset value of gas and coal gens.
    In the transition to 100% renewables I can see a lot of pumping. I cant see pumping for coal being ever a good option.
    If we need to pump coal to sustain power in 5 years from now…..please explain.

  • ben

    Assuming the ALP win government next election, can we then see this project progressing? Nope.

  • Cowcakes

    Snowy 2.0 embodies all the faults of centralised power generation. High cost, long transmission lines with their inherent losses, critical single points of failure and in this case reliance on a very scarce resource in Australia, water.

  • MaxG

    I wish it would be easy to get the Liar and Numbnuts Party out of business… but then, people voted what they always voted for without thinking for a second what they are actually voting for.
    When the odd person I speak with about their various believes and they figure out themselves — through my questions — how (literally) wrong their views are, the conversation usually ends with some embarrassment on their end… and we shall never speak again. They behave like kids who have been found out… plain stupid. Why I have given up believing in common senses: because it does not exist.