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Vestas, CWP get serious about plan to export 3GW wind and solar to Asia

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In November 2009 Prof. Mike Sandiford, the founding director of the newly established Melbourne Energy Institute, wrote a short paper introducing the idea of new energy export industry model for Australia: ELEXI, the ELectricity EXport Industry.

As Mike put it, while “dig it up and ship it out” has been Australia’s mantra for decades, a future, smarter Australia might ship the ultimate value added product to our Asian neighbours — clean energy transmitted thousands of kilometres by undersea power cables.

Crazy talk! Or was it?

Back then renewable energy wasn’t cheap, Indonesia planned to sort out its future power needs largely with coal, and sub-sea power transmission longer than the 370km Basslink sounded like science fiction.

The day would come, however, when a business case for ‘electron export’ would make sense. The Asian Renewable Energy Hub consortium (AREH), led by InterContinental Energy, CWP Energy Asia and global wind leader Vestas, is betting that the day has arrived. (The project is not to be confused with Pilbara Solar, which Sophie Vorrath covered earlier this month.)

 

 

Demand for electricity in Indonesia is expected to double over the next two decades. The Indonesian government has committed to a renewables share of 23% by 2025. While the country is committed to increasing total capacity by 35GW (on top of the 45GW already existing), Indonesia’s energy minister announced last month that the government will “not approve any coal-fired power plants in Java, this island, any more.” (According to the Global Coal Plant Tracker only 6.9GW of coal power is currently under construction in Indonesia.)

Meanwhile, the costs of renewable energy have famously plummeted, and continue to do so.

The notoriously conservative International Energy Agency confirms the massive declines in renewable energy costs.

The notoriously conservative International Energy Agency confirms the massive declines in renewable energy costs.

Australia’s world-leading wind and solar resources produce some of the cheapest and most reliable renewable energy in the world. But what of the last impediment, the monstrous costs of sub-sea transmission cables? We’ve seen significant cost reductions there too.

AREH spent 2014-15 scouring the coastline of Australia from Exmouth to Darwin and, after extensive desktop studies, meso-scale modelling, SODAR monitoring and traditional ‘met-mast’ measurement, has selected what they believe is an ideal site — 7,000 square kilometres located in the East Pilbara between Port Hedland and Broome with high quality solar and wind resources.

Picture1

The project will be connected to West Java, the province containing Jakarta, by a 2500km HVDC bi-pole cable provided by project partner Prysmian — two fully insulated conductors laid on the sea floor running in parallel (placed a few kilometres apart to reduce risk). The project is exploring the feasibility of continuing the cable run through to Singapore.

Picture1

(For the technically minded, this article explains that one cable is positive and the other negative relative to earth. A big advantage of the configuration is that, should one of the cables fail, while it is awaiting repair the system can still transmit power using ‘ground return’. If you haven’t geeked out enough, check out these cables. Not your grandfather’s submarine HVDC transmission cables!)

Two cables, laid separately, will carry 1.5GW each.

Two cables, laid separately, will carry 1.5GW each.

The cable will most likely operate at 800,000 volts, twice the voltage of Basslink and therefore able to move power for about half the cost over a given length.

Sceptics might think it is crazy to run an ‘extension cord’ all the way to Indonesia, but losses in the latest generation are surprisingly low at an estimated 7.5% over the entire length, similar to the average losses in Australia’s National Electricity Market.

Those with just enough knowledge of how the system works will be concerned that the cable will be way under-utilised due to the nature of renewable energy — won’t the cable be useless when “the wind don’t blow and the sun don’t shine”? While this objection might make intuitive sense to talk-back radio listeners, the cool kids have discovered the benefits of hybrid solar/wind projects.

While the site’s wind might be classified as ‘very good’ in strength, additional value lies in its consistency and typically diurnal pattern, higher at night and lower during the day. By choosing the right mix of wind and solar, the total is more reliable than the individual technologies.

The wind and solar resources are complementary, with lots of sun during the daytime and high wind speeds in the morning, evening and night. Chart depicts average across annual period.

The wind and solar resources are complementary, with lots of sun during the daytime and high wind speeds in the morning, evening and night. Chart depicts average across annual period.

After an extensive optimisation exercise, which sought to maximise the delivered energy per dollar invested, the project has chosen 4000MW of wind, 2000MW of solar PV with a 3000MW HVDC cable.

Armchair engineers will be heading to the comments section at this point to complain that 6000MW of wind and solar exporting through a 3000MW cable is very wasteful. Hold your horses! Yes, some energy is thrown away — especially when winds are particularly strong —but it turns out that less than 10% of total generation is lost. (For now it is not economic to store the excess for later use, but storage can always be added at a later date if/when the economics stack up.)

Importantly, this optimised hybrid/oversize model is expected to achieve almost 80% cable utilisation and deliver predictable power.

Clusters of solar farms are interspersed around the project site. The turbine layout resembles an offshore wind farm.

Clusters of solar farms are interspersed around the project site. The turbine layout resembles an offshore wind farm. Click on image to go to the live map

 

The layout of the wind farm resembles an offshore wind farm — and in fact with very low complexity terrain and in such a remote area, there are many parallels with offshore development.

In the current layout, turbines are placed in rows with 750m between turbines and 6km spacing between rows. The rows face the predominant wind direction with the aim of minimising any wind shadow and wake effects. The solar arrays are deployed in clusters, spaced throughout the site to increase geographic diversity and minimise the impact of localised cloud cover.

Vestas have recently begun selling 4.2MW wind turbines, but it’s almost a certainty that larger models will be available when the project enters the construction phase. Interestingly the project has a design life of 60 years, with a projected repowering of the turbines and solar panels after 30 years.

The US$10bn project is more than a pipe dream. Project land has been secured through an Exclusive Development License with the WA Department of Lands. Onshore and offshore development studies are underway and, importantly, the consortium has this week filed Environmental Impact Assessment referrals with both the EPA in WA and the federal government’s EPBC process.

The traditional owners, the Nyangumarta people, are actively involved and supportive. Nyangumarta Rangers have been working closely with the consortium’s ecological consultants on all the onsite studies being carried out for the EIA.

Strong community acceptance is no doubt linked to the enormous employment and skills development opportunities on offer as well as the AUD$11bn that will be spent in Western Australia over the project’s life.

The project aims to reach financial close in 2020 with completion in 2029.

Project timeline

Project timeline

There’s no doubt that the project is epic in scale — the project is expected to generate 15TWh of energy annually, which is as much as is generated by all the renewable energy projects built in Australian in the first 12 years of the Renewable Energy Target. As well as generating power for more than 7 million Indonesian homes, the project is projected to offset almost 1 billion tonnes of carbon dioxide over the life of the project.

But it’s a serious team. CWP Renewables has developed and financed more Australian wind generation than any other company. Vestas has installed 87GW of wind turbines globally in 76 countries and is investing heavily in hybrid wind / solar integration technologies.

Some might say that InterContinental Energy has set themselves an overly ambitious goal with AREH. Hong Kong-based Managing Director Alexander Tancock has two other similar projects in the pipeline — both at a similar scale and hybrid wind/solar. Both are naturally intercontinental, but even the identity of the continents are being kept a tightly held secret for now.

For now, the consortium won’t be drawn on the expected costs of delivered energy. Given supply constraints in West Java and Indonesia’s clean energy targets, the Asian Renewable Energy Hub project may be well placed to supply affordable, reliable and clean power to Jakarta and Singapore.  

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  • Tom

    I can’t reconcile “great wind” with 10% curtailment.
    Either the losses are 20% or the wind farm has a 33% capacity factor.
    Nifty idea none the less, hope it gets done.

    • Simon Holmes a Court

      10% curtailment = less than 10% of all energy potentially generated will be ‘thrown away’ due to cable capacity limits.

      i’m not sure i understand your question — can you please rephrase?

      • Tom

        OK so if it’s 40% CF wind, 28% CF solar and 15 TWh p.a. that’s a 20% curtailment loss.
        Modifying wind CF to 33% gets close to a 10% figure.
        33% is practically mediocre by Australian standards.

        • Simon Holmes A Court

          did you account for cable losses on land and at sea?

          • Tom

            No. I assumed the 15 TWh was at the site not at the customer.

          • Simon Holmes A Court

            i confirmed with proponents: 15TWh is energy *sold*, ie. it includes all losses, including 1.5% in the converter stations.

      • RobertO

        Hi Simon Holmes a Court, I took the 10% curtailment to mean that the combined wind plus the solar would meant that either wind or solar would need to be curtailed and sometimes both. They have rated the site as able to supply the cable at 80% utilisation. The cable losses are rated at 7.5% of what ever they put in at this end. Hope this helps.

    • MikeH

      Where does “great wind” come from. The article says

      > ‘very good’ in strength, additional value lies in its consistency and typically diurnal pattern, higher at night and lower during the day.

      Do you some maths?

    • RobertO

      Hi Tom, I think you are misplacing the numbers, The site has 4000MW wind and 2000MW solar and each has it own CF. When they talk about 10% curtailment they are saying the site will be producing 3000MW (what fit on the cable) and 10% of the time it will need to be restricted to the 3000MW ie wind + solar greater than 3000MW, actual loss on the cable are rated at 7.5% ie feed in 3000MW our end, get some 2775 MW out in Jakarta.

      • Tom

        I used those numbers. The information I didn’t have access to was whether energy output was at the site or at the customer. See my comments above.

  • neroden

    I think they’d better redo the calculations again: storage is already economic for any project like this. Maybe not a huge amount of storage, but definitely some.

  • MikeH

    Thanks Simon. Great article, covers all aspects of the project & well explained.

    The proposal reminds me of this article from Dr Jenny Riesz (now with the AEMO) about a proposal from Zhenya Liu, Chairman of the State Grid Corporation of China for a global HV grid powered by renewables. Not so far fetched apparently.

    http://reneweconomy.com.au/china-leading-way-global-renewable-grid-2-84674/

  • solarguy

    Simon, What an interesting and exciting article. I learnt something new as well.

    Tell me Simon, what will the projected on going income for Oz be?

    Will storage be at our end or Indonesia’s end?

    Cheers.

    • Steve

      There end I would expect. Holding the electrons as close as possible to the consumers would make sense, unless there was some pretty good pumped hydro opportunities on this side.

    • Simon Holmes A Court

      income for australia is predominantly maintenance. generally 1 technician per 9-10 turbines. plus a bunch of support staff.

      no storage planned. if/when it makes sense there is 1.5TWh of free energy at the AU end, so some could make sense here.

      • solarguy

        Thanks Simon, But there has to be some profit sharing from the export?

        • Simon Holmes a Court

          profit sharing with whom? no doubt there’ll be state government revenues from rental etc, but the profits would naturally accrue to the investors.

          • solarguy

            Ok, I thought there might be some Oz investors. Damn shame.

          • Simon Holmes A Court

            CWP is the australian member of the consortium. note that they only have the development capital for now — not the project capital.

          • solarguy

            Thanks Simon, cheers.

      • neroden

        Well, the storage can always be retrofitted. Erratic demand means that small amounts of storage is inherently useful just for minute-to-minute stabilization without waste.

        • Simon Holmes A Court

          yes, i bet we’d be surprised at how little storage would make a difference.

  • Tim Buckley

    Simon, really good write-up, thanks. I was extremely skeptical till I saw Vestas’ press release on this today, and the involvement of Prysmian, the largest subsea cable manufacturer globally. Some global heavy weights involved. Clearly years of R&D still to come before it could be considered remotely shovel ready, but this is exactly what Australia’s energy minister should be focussed on, unfortunately Josh (under the guidance of Tony the wrecking ball) is still trying to promote the NEG so as to curtail renewables and allow (with massive subsidies) for Australia to build just one last heavily polluting, stranded coal fired power plant.
    I am reminded of SoftBank’s brilliantly ambitious North Asia super grid announcement earlier this year: https://www.ft.com/content/4b04ed8e-bf8b-11e7-b8a3-38a6e068f464 – clearly China is way ahead of us in their internationally connected grid plans. Should the North Asia grid come off say in a decade’s time, it would have profoundly negative implications for coal and LNG exports for Australia, given Japan, Korea and China are our three largest export destinations.

  • Jerome Rowcroft

    Why wouldn’t you use off-shore turbines at a remote site like that?

    • RobertO

      Hi Jerome Rowcroft. off shore is currently about 2.5 time the on shore price, and we do not have the equipment to build them in this country, ie off shore cranes. The area is full of people (about 1 person per 10 Km squared) so it hard to find lots of resistance to a wind farm. Locals will come from far and wide to get jobs at this site if it goes ahead.

      • Jerome Rowcroft

        Cost is predominantly the complexity of off-shore foundations and beefing up for off-shore loads. Off-shore turbines tend to not be optimised for noise – which I imagine wouldn’t be too much of an issue if you pick your spot well. One issue is potential for cyclones. More interested in getting the big blades.

        • RobertO

          Hi Jerome Rowcroft, noise is waste energy and it can create vibrations so it is controlled (minimised). One good point about lots of WTG is that they remove energy from the wind, so large farms do reduce the damage done by wind storms.

  • RobertO

    Hi All, I wonder if we will get 800kV HVDC linking Tas to Vic, or linking SA to NSW and onto Qld. Losses at 7.5% would be acceptable

    • rob

      Na not happening Roberto…..that’s what people call me by the way. SA is keeping all our renewables till we get to 100%. Then and only then will we deem anyone else allowed to access our surplus at a huge profit to our state!

      • RobertO

        Hi Rob, SA will never go 100 % RE on it’s own, and when you plan on selling your wind energy at hugh profits, remember the price of wind power will have dropped. Yesterday AEMO had a rule inplace that requires 4 gas generator to be running when wind is above 1200 MW so how can you claim SA will go 100% RE. Leave the NEM will require about 3 to 5 times the current wind power, possibly 2 times or 3 times the current solar, and some CST power and / or PHES to be built , something like 1000 MW (and maybe more). A lot more batteries will be required both residential and commerical. Because you are limited on the Vic links your exports/imports will require an over build in SA and as such they will be curtailed, when you reach export limits. Will the battery reduce the 4 gas generators to 3, (or may be 2) I hope so, will an interconnect to NSW reduce SA gas to 2 (or 1 ) generators I believe so, and to build the interconnect it 3 to 5 years away. An interconnect to NSW also drops the amount generator build required in SA and if it’s big then may be the gas requirements also. SA current demand averages 3000MW so an interconnect of 3000 MW would enable all wind to be exported (oversize because we need to do Transport as well). Under the interconnect wind would need to 2 1/2 times current build, solar 2 times current build, CST / PHES less matt be 500 MW and the price also drops. How do we pay for this, easy a CRE zone in NSW. a CRE zone in SA and a CRE zone in QLD all interlinked (Tri angle). Also all generator must of RE are able to sell “LGC mark 2” (LGC2) on open market, which Retailers must buy, however RE generators with retail (Gentailers) are made to hand over LGC2 to ARENA/ CEFC for $0.00 (to be sold on open market by ARENA/CEFC) and Gentailers still need to buy on open market LGC2 if they want to sell electricity in Australia. Note penalties apply to retailers at 3 times average annual market prices, and are not tax deductable for failure to buy LGC2. This may push the price of electricity up for a year or so, but the price will drop after that to closer to the actual production price. This will also distroy the power of the Gentailers.

        • Jonathan Prendergast

          I agree interconnection from SA to NSW is very tempting, but I also believe local options could prevail economically. The Tesla battery could reduce gas generation requirement from 4 to 3 in time. Then add grid-edge/BTM battery storage, the proposed CST project with storage, hot water management, demand response and dispatchable EV charging, and you might get it from 3 down to 2 or 1 gas generator being required.

        • rob

          Roberto MY COMMENT was more in jest than anything else! Just we here are literally powering along and are sick of the politics and being treated poorly by the upper states as we are at the end of the line both with POWER and WATER!

          • RobertO

            Hi rob, breaking the Gentailers is my aim, were all being taken for a ride. Currently coal is being offered to Japan at $110 per ton free on board at Newcastle, this will have flow on effects to NSW consumers with higher prices.

        • Mike Shackleton

          That rule about gas generators needing to be running should be wound up once the Big Battery is up and running and AEMO is happy. The battery can pick up the slack and give a dormant gas generator enough time to start up from cold.

          • solarguy

            Wouldn’t that still give them some chance of bidding a high price or would the state owned portables negate that scenario?

          • RobertO

            Hi Solarguy, yes they still can over bid but the battery is another supplier in the market place so bidding will be moderated (makes it much harder to get to $13 900 for a 30 minute period). Spikes should be lower that $1000 now unless one of the interconnectors is down.

          • RobertO

            Hi Mike Shackleton, it all depends on AEMO and how they view security of the network in SA. I happy if they leave 1 going rather than 3 going, and I am sure an engineer could get a planned “Hot Stand By” arrangement going that suits the networks.

    • Simon Holmes A Court

      likely that we’ll build another interconnector from vic to tas and SA to either vic, NSW or even QLD.

      • RobertO

        Hi Simon Holmes A Court, I agree it’s seems that we will build them and I suspect the first will be SA to NSW (am hoping a CRE zone across central NSW to Liddell, keeping it northwards for Sydney) so that we can then link in QLD for solar). Demand Management (DM) need tp be applied to the cable size (I would like a 800kV cable at 3000 MW rating) but DM tell me that it will be closer to 275 kV at 800 MW or may be 1200 MW (CRE zone if 8000 MW we may need 2500 MW or we do something silly like install a 500kV cable and use it at 275 kV untill the RE gets built). I suspect that SA pollies will not start this until after the election is decided there, and if they go COALition then it will delay until federal election is decided.

    • joono

      It seems obvious (to me at least), that the Stage Grid of China, largest builder and operator of HVDC connectors in the world, will build an interconnector from Tennant Ck to Mt Isa along their newly acquired development corridor between those markets.
      This will tie in with the Chinese One Belt, One Road strategy for global domination and the State Grid planned HVDC from Malaysia to the NT.
      It is a geographical fact that for much of the year, Tennant Ck is still receiving usable irradiance when the east coast markets reach peak loads in the early evening.

  • MrMauricio

    There is another clean energy export opportunity emerging.Hydrogen using solar electricity to separate it.Instead of fossil LNG we may be exporting clean hydrogen to countries like Korea and Japan-who will have to meet clean energy commitments like everyone else.The Hazer process shows promise also using our offshore gas as a feedstock and then low grade iron ore (road metal) as a catalyst-producing very low emission Hydrogen at 1/3rd current cost-and by product of battery quality graphite at 98%
    http://www.hazergroup.com.au/about/

  • ed

    …hope they use superconducting technology….

    • Simon Holmes A Court

      no, they are not.

      • RobertO

        Hi Simon Holmes A Court, are you aware that SA is replacing the marine cable to Kangaroo Island. The cable is 33 kV at a cost of $25 million, but their own figures put a 66 kV cable at $27 million. I have tried asking the question “Whom would want to build a Wind Farm on Kangaroo Island?” The cable should have a life of about 50/60 years. There is issues associated with need to upgrade more of the network in SA to be able to use the Kangaroo Island but you can use the cable at 33 kV until somebody says lets build the WF and charge them the difference for the cable plus the upgrade required plus a fee. Dave Clarke has estimated about 2000 MW potential
        http://ramblingsdc.net/Australia/WindPPotential.html#Potential_on-shore_wind_development_in_Australia

        • Simon Holmes a Court

          yes, am aware of the shortsighted decision behind the cable upgrade to kangaroo island.

  • ozfred

    While I support the idea, if the WA government is smart, there will be a clause requiring that at least 15% of the power output be available for domestic consumption at a price not greater than 95% of the export price.
    And that a connection to the northern electrical grid (such as it is) be mandatory.

    • Simon Holmes A Court

      is there a northern electrical grid?

      • ozfred

        Such as it is…..
        [quote]
        Horizon Power are responsible for delivering electricity to 47,000 connections, supplying more than 100,000 residents and more than 10,000 businesses in regional towns and remote communities.[1] They manage 38 systems: the North West Interconnected System (NWIS) in the Pilbara and the connected network between Kununurra, Wyndham and Lake Argyle, and 34 stand-alone systems across regional WA.
        [/quote]
        https://en.wikipedia.org/wiki/Horizon_Power