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Why coal and gas plants should pay solar and storage for back-up

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A new report from the Australia Institute’s Climate and Clean Energy Program suggests that concern about reliability in Australia’s electricity market should be turned on its head: rather than renewables paying fossil fuel generators for back up, perhaps it should be the other way round.

The study – titled “Can’t stand the heat – the energy security risk of Australia’s reliance on coal and gas generators in an era of increasing heatwaves” – points out, as noted on numerous occasions on this website, that fossil fuel generators literally melted in the sun during the February, 2017 heat wave.

In all, some 3,600MW – or 11 per cent of total coal and gas generation – failed at the very moment that it was needed.

heatwave trends graph 3 copyGiven that Australia is entering an era of dramatically increased heatwaves – and the country’s ageing coal and gas power stations are not designed for these conditions – the report says that perhaps it is these assets that should pay solar and storage facilities for “heat-safe” back-up.

The report serves to highlight one of the biggest inconsistencies of the proposed National Energy Guarantee, which appears to conflate the idea of “baseload” with “dispatchability”.

When the Australian Energy Market Operator talks of “dispatchability”, it is talking about technologies that it can count on to meet those critical peaks, almost invariably during summer heatwaves.

But the experience last February showed that many of these facilities could not be counted on. In New South Wales, 20 per cent of coal and gas generation (2438 MW) failed to deliver during the critical peak period, leading to load shedding at Tomago aluminium smelter.

tallawarra graph 2 copyThe report found, as the NSW Coalition government had identified previously, that it was solar power which prevented far worse disruption and load-shedding.

The analysis also found that during the February 2017 heat wave across south-eastern Australia:

  • In South Australia, 17 per cent of gas-powered generation (438MW) was unavailable during the peak demand period that led to the 8th February blackouts;
  • In Queensland, 7 per cent of coal and gas generation (790MW) was withdrawn in the four hours of the peak, leading to $13,000MWh prices eleven times within three hours;
  • Across the NEM, 14 per cent (3600MW) of coal and gas electricity generation capacity failed during critical peak demand periods in three states as a result of faults, largely related to the heat.

The report concludes that retailers should be required to provide “heat safe” firming power to back up gas and coal plants.

This could include dispatchable solar thermal with storage, or additional PV, to reduce peak demand on hot days. This could be buttressed by battery storage to dispatch into the evenings.

“Gas plants failed on a grand scale during the heatwaves this year,” report author Mark Ogge said.

“Restarting mothballed gas plants and stop-gap diesel generators are not a long-term solution to reliability. Given the reliability problems with fossil generators during heatwaves, it would make more sense to require them, through the NEG, to provide firming power backup.

“Generators could be required to provide dispatchable solar thermal capacity, or additional PV to reduce peak demand on hot days, ideally with battery storage to dispatch into the evenings.

QLD graph 1 copy

The analysis shows that without rooftop solar, the daily peaks that caused the blackouts, load-shedding and high price events would have been exceeded by:

  • 4 hours 20 minutes earlier on February 8thin South Australia;
  • 3 hours 25 minutes earlier on February 10thin New South Wales;
  • 5 hours and 10 minutes earlier on February 12thin Queensland;

It is a useful report, given that the Energy Security Board, with its draft NEG thought bubble, has yet to identify what it really means by “dispatchability”, and appears to be intimating that coal and gas-fired generators would benefit from it.

This comes as federal energy minister Josh Frydenberg attended the launch on Friday of another bunch of energy claptrap – this time in the form of a report by the right wing Menzies Research Centre, lead authored by Tony Shepherd, the climate skeptic and renewable-hating former head of the Business Council of Australia.

Like most right-wing reports about renewables, it doesn’t even try to hide its ideological hatred of wind and solar, and it gets simple economics hopelessly wrong.

It says, for instance, that the large-scale renewable energy target cost more than $2 billion in 2016/17 – getting there by multiplying the number of certificates by the average market price.

But it ignores the fact that the spot market represents only a tiny fraction of the certificates acquitted – these are only bought by energy retailers too lazy to invest in their own solar and wind generation.

Menzies uses this fabricated number to argue that the cost of the RET is $300 a year to consumers, a number that created yet more howls of disapproval from the Murdoch media.

Yet the government’s own modelling for the National Energy Guarantee shows that the RET will deliver cost reductions of $300 a year to those consumers, because of the lowering of the wholesale prices that wind and solar cause.

The Menzies report then goes on to blame wind and solar for all the “reliability” ills of the market, and for the many recent price spikes.

Laughingly, it cites Queensland as the worst example of these price spikes. A little bit of research might have informed Menzies that there are no large-scale renewable wind and solar plants in Queensland and it is the state with the most amount of fossil fuel reserves.

Queensland’s price spikes, as its own government has acknowledged, were the result of outrageous (but legal) gaming of the markets by the fossil fuel generators – something the industry, and the BCA, want to preserve by introducing the National Energy Guarantee.

The rubbish goes on. Menzies wants “existing state subsidy schemes (to) be discontinued immediately and existing contracted commitments phased out”. And it wants nuclear in its place. Enough said. We hope the minister enjoyed himself at the launch.  

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  • Ray Miller

    It is about time the likes of the lead author in this case is brought before the criminal courts for fraud. It is clear the purpose of the report is to ‘mislead’ and provide propaganda for extreme the right wing agenda. For a high level minister to be associated, or seen supporting the report is damming on the minister concerned as well.
    Sorry Josh, your sin is is worse than Sam’s, you need to go as you have demonstrated you are not a fit or proper person to be the federal environment minister.

    • DevMac

      The degree of manipulation that’s being allowed, and even promoted, at the highest level of Australian government is truly disturbing. Dereliction of duty-scale disturbing.

      It’s also somewhat heartening that they’re having to stretch their numbers so far out of shape. It means the renewables are winning. The further their arguments are from reality, the further they are from winning.

    • Joe

      ‘Intermittent and Unreliable Baseload Coalers & Gasers’…that’s the line we need to hear from the Josh. The Josh doesn’t believe in rooftop solar for his own home so we can hardly blame him for being consistent…consistent in not promoting RE. Joshie’s good mate, the Shepherd, bobs up every now and then when The COALition needs him. But he showed his true colours a while ago so we can safely disregard this latest piece of fluff from the Shepherd. But back to the Josh. I can’t think of a worse Environment Minister than we now have. The Josh is a disgrace and should just resign.

    • PacoBella

      Tony Shepherd was also the lead author of the Commission of Audit used by Joe Hockey as a basis for his infamous 2014 Budget. Somebody should indeed look into Tony Shepherd’s background, track record and qualifications to see whether he is in any way, shape or form the sort of person we want guiding public policy and spending in Australia.

  • DevMac

    Still on about nuclear? I think the only reason anyone is promoting nuclear is because the time frame to build and implement is so long that it would allow the fossil fuel generators (or more specifically their investors) to continue their gaming of the system for much longer than if renewables continued their march.

    • Joe

      It is a sidesplitter this idea of Coal and Gas being the transition to…Nu Clear Energy. I’m sure Rupert and his newsrags could fill out pages on Coal, Gas & Nu Clear…just don’t mention RE…unless of course it can be demonised like the Rupe always does.

  • Cooma Doug

    A fact that doesnt fly very well in LNP and others.
    Nuclear power stations were encouraged initially in USA as part of the nuclear arms race.
    If there was no such race there would be very few nuclear power stations.
    Today in the mix of technology they dont stand up well due to cost and the science supporting small nuclear plant is way too expensive and a long way from small safe clean fusion.

    The nuclear debate gets really emotional. Im happy to stay calm. But before we start pushing it lets save ourselves a lot of trouble and begin by nailing down the location of a 700 mw nuclear plant.
    If you can come up with such a place lets look closer.

    Can anyone name an appropriate site.

    • Rod

      Bondi? Close to load and plenty of cooling water.

    • RobertO

      Hi Cooma Doug, I can, it’s about 93 million km from here, and we need about 2,800 000 Tindo panels (the Australian made units). Should I order a couple today? I would start the job.

      • nakedChimp

        Not gonna fly – the elite can’t monopolize the receivers to extort monopoly profits from the peasants that way!

      • rob

        hey Roberto….. just ordered a 20 Kw TINDO solar system on Friday to go alongside my 10 Kw system installed 2 years ago! GREAT AUSSIE product and only 10 Km from my home…..72 panels all up….From now on I want to be called the 30 Kw man…lol

    • david_fta

      How about Traveston Crossing, in Queensland’s Mary River Valley? That was one of the sites id’d in Ziggy’s report to Little Johnny (actual sites all redacted from the publicly available report).

      That’s why one of the 2 sites identified for a uranium enrichment plant by ANSTO’s Clarence Hardy in 2007 was Caboolture (other possible site was closer to Roxby Downs, near Port Pirie; http://www.abc.net.au/am/content/2007/s1952006.htm).

      That’s why they put Peter Beattie up to building a water supply dam in the middle of a wide, flat valley floor on alluvial (leaky) soils?

    • PacoBella

      Point Piper

    • Ian

      Next to the Sydney Opera house, the fireworks from a melt down would form the perfect backdrop to such an iconic building.

    • Ren Stimpy

      Somewhere in postcode 2600. Build a grassy roof on it so people can walk over it and roll down the other side. Cooling tower water can be drawn from Lake Burley Griffin – with suitable filters for the ‘ditched’ hire bikes and shopping trolleys.

    • Be

      Nuclear cost 6 times solar or wind and takes 12 years average to build? the only place to build nuclear is nowhere. 2 milion tons of toxic mining per year per reactor is not clean, nor sustainable.

  • Hettie

    The old incumbents in the energy market have been very safe, relying on the total absence of critical thinking that characterises the politicians and the bulk of the Australian public.
    But people are waking up now, shaken out of their habitual torpor by unsustainable (and unjustifiable) rises in the cost of electricity.
    The government has long said that the market is always right.
    Well, guess what! In this case it is, and it is market forces that are killing coal and gas.
    Suck. It. Up.

    • DevMac

      The “the market is always right” people always seem to slightly change their tune when a market they’re invested in is in danger.

    • nakedChimp

      The market is not always right. Monopolies send wrong signals to the market, which then allocates resources inefficiently which then causes sub-par or even devastating outcomes.

      Sorry.

      • Hettie

        No of course it’s not *always* right, but in this case it *is* right.
        And the people who claim that it’s always right are the very people who are now trying to say that it’s wrong.

        • nakedChimp

          Hehe, very good, I see you get how that game is played 😉

  • RobertO

    Hi All, I am hoping that the NEG and the COALition are about to come unstuck, or self destruct over this mess they have made. I did manage to read Rupt’s mag the Age today and I laught out loud, only to have someone ask me what I was reading.

    • Farmer Dave

      Sorry, Robert – The Age is one of the few major newspapers not owned by Murdoch. It is a Fairfax Media publication.

  • Ian

    Recently an article run by this site was on 1414’s molten silicon storage. This was apparently 10 times cheaper than lithium batteries. Well, coal thermal and molten silicon are a match made in hades. Coal burns at 1900’c and steam is used at 600’c. Molten silicon is 1414’c. There should be a relatively easy step to add thermal storage to a coal plant. The problem with coal is that it is not very dispatchable. To be efficient it has to operate at its peak efficiency point all the time- coal in the boilers needs to be burnt constantly. With thermal storage such as molten silicon, it could produce heat constantly and produce steam and electricity intermittently. Would such a technology promote coal or could it be used as a lever to insist on storage applied to coal plants?

    You can imagine a grid where solar, and wind predominate but a proportion still needs to be storage or fossil fuel. Gas is considered for that dispatchability, but coal with thermal storage could do the same.

    • nakedChimp

      What happens to the price of FF electricity if you bolt on ANYTHING to it compared to RE?
      So whatever you come up with, it’s useless economically.
      They are on the way out because of economics.
      All that puffing and huffing now is the last try (or one of the last tries) to delay the inevitable.
      They’re done.

      • Ian

        Maybe so, but at this point renewables are thought to be able to reliably provide up to about 60% of grid power. Nobody knows for sure. You need apparently, a lot of storage to tide over for prolonged windless cloudy days. Again, this may be true or may not be such an issue – nobody has actually tried to maximise renewables. But, assuming, that sizeable fossil fuels or huge amounts of storage are needed to cover the disparity between renewables generation and demand, then how would you do it? How would you maximise dispatchability for day to day power matching and how would you have a very large capacity for those, maybe mythical, prolonged cloudy, windless days? If you use storage, then you double or triple the cost of the renewables energy simply because you pay for the renewables generator, plus pay for the storage facility plus pay for the losses involved (and also for the transmission line ie Basslink or Snowy hydro). Well, if you have to use FF, then this should be very dispatchable.

        Coal, with thermal storage, could become incredibly dispatchable. This does not exist yet, and a quick google search does not bring up any examples. The premise is this: pulverised coal furnace 1900’c, molten silicon storage 1414’c, steam for the gen-sets 600’c – a very nice thermal gradient between this steps. I played with a thought experiment in the comments to the 1414 storage article, and I thought I might paste it here, the idea is very open to discussion:

        The nice thing about coal is that it’s a solid and can be stored very easily in a stockpile, no pressurised tanks needed. We understand that coal furnaces cannot be fired up quickly. But they can be fired up very intermittently. For instance, if renewables fail due to prolonged cloudy windless days, then a standby coal plant could be fired up. Very little dedicated coal transport infrastructure would be required. Unlike gas. Secondly dispatchability of fossil fuels can allow large amounts of wind and solar to be installed without batteries, pumped hydro or long transmission lines. This sort of dispatchability is required on a daily basis – perfect for coal and thermal storage.

        Imagine the case of South Australia: maximum demand 2900MW, wind and solar contributing up to 60% with gas required to run constantly for ‘firming’ capacity. If such a grid had standby coal capacity equal to maximum demand but hardly ever used, and variable coal plus thermal storage, say, for 20% market penetration to take care of the vagaries of daily supply and demand mismatches. 13 000GWH average annual consumption = 1500MW @20% =300MW worth of coal burnt constantly and with 18 hours of thermal storage, 900MW worth of steam used intermittently. These are just figures conjured up as a thought experiment, to demonstrate that coal could leave its ‘badboy’ Status and become a valuable asset as the standby generator and generator of last resort.

        The problem with gas, as I see it, in an energy system where large amounts are needed very intermittently and where gas is not used for any other purpose, not for home and commercial heating and not for industrial purposes – these all been substituted by electricity – is that an expensive gas supply and storage infrastructure needs to be in place for only occasional standby use. Coal has the advantage in this scenario as it is solid and can be plonked anywhere, and in any quantity, for as long as you want without much unmanageable risk. It can be transported using trucks or trains that would normally be used for other purposes, so no wasted infrastructure. As discussed, a large capacity coal plant could sit idle for months at a time and be started when needed. A smaller quantity of Coal with 18hrs or more of thermal storage could dispatch electricity very quickly to make up the daily renewables shortfall. This aspect of the plant could be quite small, or at least the furnace part of it could be very small and the storage and turbine part quite large.

        You could have say 5 furnaces of about 300MW capacity each , 1500MW x 12hrs = 18000MWH of molten silicon storage and 3000MW of generators – maybe 5 x 600MW generators. ( not counting all the losses, if you want to count the losses then these capacities would need to change obviously ). In normal operation one furnace would operate all the time, topping up the thermal storage, when dispatchable power is needed, then one or two generators would be started. If more power is needed, then a third generator could be started and step-wise until full capacity is brought online. In the mean time, as more capacity is required for longer periods , the furnaces can be fired up one or more at a time. The coal stockpile could be large enough for a couple of months supply, and be fed by truck or train very slowly – twelve months coal deliveries to supply say 2 months worth of full plant operation.

        This could be a very valuable facility, the equipment left idle and in various stages of standby mode would bear the expense but would take up a small footprint, compared to pumped hydro. The cost of furnaces, molten silicon storage, boilers and gen sets would be far less than large scale lithium or flow battery storage, and could provide continuous long term generation if needed or provide almost nothing for long periods if not required. Coal stockpiles could be vast, equivalent to many snowy hydro dams, but in a small area, and would be very cheap to maintain. Such a facility could be shared by the whole NEM like a big bass drum brought out in an orchestra only very occasionally.

        • nakedChimp

          There is CSP and pumped hydro for a start, to have RE with storage.
          Most current dams are just running all the time. Converting them to ramp up when wind + solar are slow is just a matter of policy and control.

          Another source of dispatchability would be biowaste or batteries.

          And finally demand response.

          That’s how I would do it and I just write it, as that’s how it’s being done already.

          Bolting a thermal storage onto a coaler make it more expensive and doesn’t solve the basic problem of CO2 emissions.

      • Be

        coal neds load following, does that make them useless? Fill in solar and wind with hydro and hydrocarbons from wastes in simple gas turbines. a day of battery and pumped hydro would allow over 90% average solar and wind supply of demand. I’m going to have to look up why those gas turbines failed in the heat. simple turbines don’t care.

    • Hettie

      Interesting idea. But when the coal plant finally dies, could the storaage unit be moved to another installation? Remembering that most of our existing coal fired generators are getting old.