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Whyalla steel city goes green with 1GW of solar and storage

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GreensmithOntario

 

UK billionaire Sanjeev Gupta has made good on his commitment to transform his newly acquired Australian steel business into a renewable energy powerhouses, announcing massive investments in solar and storage that will knock 40 per cent off his electricity costs.

Gupta said on Monday that he would build 1 gigawatt (1,000MW) of dispatchable renewables in and around Whyalla, where his major steel plant is located. This would comprise huge investments in solar, battery storage, pumped hydro and demand management.

He won’t stop there. Gupta is looking to repeat the dose – although with varying mixes and scale of renewables and storage – to power the company’s steel operations in Melbourne, Sydney and Newcastle. He said on Tuesday he wanted these bigger plants to be powered 100 per cent by renewable energy.

The initial development will see a proposed 80MW solar farm at Whyalla expanded to 200MW and completed by the first quarter of 2019.

This will be accompanied by:

– a 100MW/100MWh battery storage facility;

– 100MW of demand response at the Whyalla steel works and other sites.

Both of these will be built by 2019, and by 2020 there will also be a 120MW/600MWh pumped hydro storage facility at one disused iron ore mine pit in the Middleback Ranges that used to serve the steelworks.

The investment marks what will be the largest solar and storage investment in Australia – and we can be sure that this one will actually go ahead (unlike others) because Gupta has the money and his operations are the major client.

More importantly, it marks a new way of thinking about energy, and may cause the designers of Australia’s proposed National Energy Guarantee to reflect on their options.

If such savings can be gained from a severely overpriced grid through renewable energy and storage, then it may become clear to the regulators that their proposed reliability guarantee and emissions guarantee should be structured to ensure the shift to cheaper clean energy is accelerated, rather than held back.

Time will tell, and it appears Gupta is also keeping a close eye on developments, and has indicated that the second stage of his plans – which will consist of 480MW of additional solar  – could be contingent upon the final design of the NEG.

“I have been asked whether today’s decision is contingent on how current uncertainty in national electricity policy is resolved,” Gupta said in a statement.

“Naturally we are watching developments in policy closely. In the meantime, we are proceeding with the first 520MW of capacity based on positive interactions with relevant stakeholders.”

The start of the first phase will not depend on outside or third party contracts, because most of the demand will come from the steelworks, although supply will be offered to other parties.

The work will be carried out through Zen Energy, the Australia renewable and battery storage company in which Gupta’s Liberty group bought a majority stake soon after the Whyalla purchase.

The combined impact of the proposal – if fully implemented – is likely to take South Australia well beyond 70 per cent share in wind and solar.

It is not the only major project underway: there is the 150MW Port Augusta solar thermal project, along with the Bungala solar project and the Lincoln Gap wind project, both under construction and also located near Port Augusta.

And there is the Tesla big battery nearly completed near the Hornsdale wind farm, another 30MW/8MWh battery to be built next to the Wattle Point wind farm, and possibly another pumped hydro facility at Cultana.

There are numerous other large projects, from the likes of DP Energy (wind and solar) and Lyon Group (solar and storage), and Adani (solar), but it is not clear that these will see the light of day.

(See this new Explainer for a summary of the big battery storage projects making South Australia a leader).

Professor Ross Garnaut, who remains a director of Zen after ceding the chair to Gupta on Monday, says the Whyalla project will also include co-generation – the use of waste heat – and will reduce energy costs at the steelworks by 40 per cent.

Garnaut said similar savings could likely be made at the electric arc furnaces the Liberty OneSteel group owns in Melbourne, Sydney and Newcastle, although the exact mix would depend on local conditions.

And Zen, as the renewable and storage developer, would be looking to service loads for other major energy users, particularly with the 480MW of additional solar that is planned for South Australia.

“Each of them will have a variety of opportunities,” Garnaut told RenewEconomy. “The key to our model is adjusting mix of generation and storage to local circumstances.”

Gupta said he was delighted that Zen had hit the ground running.

“These first steps in SA will improve reliability and greatly reduce costs of electricity in our own steelworks at Whyalla, and provide competitive sources of power for other industrial and commercial users,” he said in a statement.

“I believe there is a great future for energy-intensive industries in Australia. I look forward to helping build ZEN Energy to become a major player in the Australian energy transition.”

It’s ironic, because former prime minister Tony Abbott had said that the carbon price – co-designed by Garnaut – would make Whyalla a ghost town.

Abbott killed the carbon price, but electricity costs have more than doubled since. And the town’s future will be secured – rather than threatened by – renewables and storage.

Garnaut says the savings are a combination of soaring grid prices, falling solar and storage costs, and a new way of thinking about energy, including demand management and energy efficiency, particularly the use of waste heat.

Asked if the scale of the transaction and its significance had brought him satisfaction, given his near decade of work since his exhaustive review into climate policy, Garnaut said: “I would describe my emotion as one of relief.”

Why relief? “I think it’s pretty obvious.”  

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  • ben moretti

    Funny how renewables are putting Whyalla *on* the map

    • Joe

      …Abbott reckons…its crap.

  • Michael Murray

    Excellent. More power we can send to Vic :-). All day today we have been shipping 500 MW of wind to Victoria.

    • sunNwind

      happy to have it Michael – makes my car go well

      • Michael Murray

        As long as I can have it back for my aircon in January 🙂

  • trackdaze

    it started with Howard and saying you can’t run a steelworks on anything but BaSeload i thought.

    • RobertO

      Hi Trackdase, The Mad Monk told the world about BaSeload and Steelworks and how they can not run on RE, and the owner of the Steelworks responded the following day (“But yes you can”) and now he has said “Yes I will”

      • trackdaze

        Thanks. Maybe we should get the “Suppository of Wisdom” to talk more often.

        Can’t imagine liberal party donors are happy that there is another Gigawatt of RE displacing coal based on someone taking a steel work thats uneconomic run on expensive coal flavoured power and turning into a profitable one based on new build renewables.

        Just how much of this decision was about teaching the human weather vane a lesson is not sure.

      • Joe

        …and the Abbott’s response would surely be….it’s all crap.

        • TechinBris

          Of course everything is crap to you, when you are totally full of crap.
          Abbott is the epitome of crap after all.
          So crap, he sadly hasn’t even realised how crap he is.

  • neroden

    Here it goes! Companies are fed up, and soon the federal government wil simply be bypassed.

    • Disintermediation is a wonderful thing, especially if the middle man is a roadblock on the path to sustainability.

  • Joe

    In SA it is the Elon and the Sanjeev show…bloomin’ marvellous as that lovely Tasmanian always says.

  • howardpatr

    Hopefully Gupta and Zen are exploring possibilities for the large scale production in Australia of batteries; other than ones based on lithium.

    ViZn and EOS are just two of the companies with the technology and products that may very well bring large scale distributed energy storage.

    Then again there is the work going on at the University of Wollongong:-

    https://arena.gov.au/projects/smart-sodium-storage-system-for-renewable-energy-storage/

    Waiting for the COALition and the ESB, (John Pierce), to be innovative in the future renewable energy space will be futile given the control exercised by the incumbent fossil fuel gentailers.

    • zenfounder

      ZEN Energy is technology agnostic and as soon as more cost effective sustainable technologies are commercialised going forward they will be brought into the mix…lets make SA the middle east of the new energy world!…
      Richard Turner, Founder ZEN Energy

      • Ken

        Is that you Richard ?
        How does one contact you ..

    • Hettie

      Hell will freeze over before our government of idiots accepts that renewables are the way forwards.
      They have an anaphylactic reaction to anything that might be evidence. Of anything.

      • TechinBris

        Renewables break the model that made the Banksters rich at the turn of the last century and held them as the power brokers to the present day.
        How can you control prices, plus supply and demand, when you can’t own the supply of wind, solar energy, or the tides and waves as anyone can harvest it as it lands on them.
        It is all about control by extortion, so you can dictate your power, influence and expand your wealth at the same time.

        Knowing that, you understand who it is that owns and controls the decisions of our political parties and whom they are representing instead of us.

        • Hettie

          Absolutely. Greed and defense of privilege. Nothing whatever to do with the welfare of the nation or survival of the planet.
          What good will their precious coal do them when it has destroyed our world’s capacity to sustain us?

      • Joe

        Young Hettie you are a ripper., as always. Anaphylactic reaction…just give the dudes a shot of RE !

        • Hettie

          So glad you like it, Joe.
          As you know, my knowledge of the technical details of the energy market is very broad brush, but the benefit of that is that I can see the big picture rather clearly, and it ain’t pretty. Such metaphors seem appropriate.
          A catastrophic, inappropriate reaction to something which, to a healthy organism is no threat at all.

    • Ken

      Been exploring the same thing..
      EOS quoting $160 per kWh
      BYD quoting $400 per kWh
      ViZn quoting $800 per kWh

      Still does not compute why Zinc Air has not taken of more compared to Lithium, when it is apparently lower in cost and better in performance?
      Definitely a supply side issue !!

  • sunNwind

    Outstanding outcome for Whyalla and the nation. This is what real action looks like – puts the federal Govt to shame. As Joe said, its the Elon and Sanjeev show in SA and Australian federal politics is left in the dust. Put it together with the other projects nationwide such as the big RE powered greenhouse in Western Vic and it starts to look like major economic, employment and environmental progress. Pity the conservatives cant recognise it. At least a number of states are on board – with the notable exception of wanting to dig up more coal in QLD.

  • Bristolboy

    The same company is also investing heavily in renewables in the UK, again because it is cheaper: http://www.cityam.com/271431/gfg-alliance-plots-wind-farm-support-scottish-metals

    When large global heavy industry switches to renewables it is clear the inflection point has been passed. It also brings additional influence to a future switch.

    • Coley

      Liked this bit esp,
      “Glenshero is a unique project in our portfolio. It would be built in an environment of zero subsidies, using steel rolled and finished in Scotland and then generate clean energy to support the Scottish metals industry.

      Only downside, it’s not in one of the former industrial, and now deprived, areas of Northern England.

  • Ken

    Its embarrassing for Australia that it take two guys from overseas to lead the way and demonstrate what CAN be done when it comes to energy and embracing up to date and proven technology to power our world.

    They must have a good giggle at the level of backwardness that they find here.

    What needs to happen is a detailed ACCC review of the full supply chain ( cost) of energy from the source to the customer inclusive of all the taxes levied along the way.
    Those found to be charging excessive costs including network owners and their wheeling costs should be forced to be more accountable for their charges.

    Only when this happens will we see any real drops in the price that customers pay.
    Otherwise, solar and battery storage at the customer premises is the solution ( aka.. grid desertion).

    • Brunel

      No Innovation in Australia because both sides of politics love the real estate bubble. The only Innovation is how to inflate prices further – negative gearing, letting foreigners buy houses here illegally, urban growth boundaries, etc.

  • Peter Smith

    The Renewables Revolution is Unstoppable. Well done. We have the ‘Power to Change’ by FechnerMedia.

  • Tom

    I’ll believe it when I see it, but I really hope that I do.

    I’m not saying that Gupta & Co are spruiking, but I’ve just heard a few “too good to be true’s” before.

    I’ve spent a bit of time in Whyalla in the past. It’s not much of a town to look at, but it’s got really good people, a really good culture, and for a relatively small town it’s got a lot to do and a fair bit going on. It’s got beautiful sunrises too – the iron ore dust staining the houses/ roads/ trees/ everything on the eastern part of town makes the whole town positively glow in the orange sunlight. Even though there’s lots of poor people, I never felt unsafe there.

    I sincerely hope that Gupta carries through with his plans, and that Whyalla thrives (without producing a localised house price boom – house price booms smash culture in its tracks).

    • TechinBris

      It is great to see things are improving for Whyalla and the folks there can show the rest of the Nation on how good life can be when everyone isn’t at war with each other, but work together to make life good for their community. Look after those whom look after you.
      Well done Whyalla. Show the Nation how it is done. 😀
      To the Federal COALition, go suck eggs.

      • Joe

        COALition go…suck lumps of coal ?

  • Gary Rowbottom

    Go you Upper Spencer Gulf!

  • Steve h

    Basically a major investor thumbing his nose at the federal government farcicle energy strategy. This will be a few more steps along the path of the mass exodus of the significant energy users from the grid, till the grid is only for those that can afford to pay through the nose or can’t afford to exit.

  • Robert Westinghouse

    Great initiative – the government should adopt such forward thinking….Oh I forgot they are in bed with BIG Energy. Shame….Gran will be eating yesterdays leftovers for a few more years yet.

    • Joe

      …that will make the Elon almost cry…again ( Watch last Sundays 60 Minutes show with the Elon and Liz Hayes ).

  • Robert Scarfe

    This is one of the best things I have EVER read on the internet and a real smack in the face for all you morons out there who rave on about “Base load Coal fired power”. Fantastic!

  • Alan S

    An article in RenewEconomy about metallurgical/coking coal used in Australia would be useful. People on this site grasp the difference between metallurgical and thermal coal but it would be interesting to know how much is used, where, what for, emissions and what alternatives are in development.

  • BushAxe

    New player in the energy market will make the incumbents twitch, if they don’t get their act together others will follow and no one likes losing market share.