AEMO provides glimpse of future grid: Not much fossil fuel, even less "base-load" | RenewEconomy

AEMO provides glimpse of future grid: Not much fossil fuel, even less “base-load”

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AEMO offers glimpse of new energy system, one dominated by wind and solar, with storage, batteries and EVs playing a key role, and fossil fuels barely to be seen.

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The Australian Energy Market Operator has provided a fascinating insight into the potential future grid as it works on modelling that will underpin its 20-year planning blue-print for the energy transition in Australia, the Integrated System Plan.

The grid, it makes clear, is likely to be completely different from what it is today and what many imagine it could be.

Thermal generation (gas and coal) will play a much diminished role, so called “base-load” will barely exist. And in its place wind and solar will provide the bulk of generation, while balance and flexibility will come from storage, hydro, and imports/exports, while a whole range of technologies will play an important role, including electric vehicles, virtual power plants, and household batteries.

AEMO has been working on a series of workshops for the latest ISP, which is a huge volume of work that will lay out a plan for five different scenarios ranging from slow to “step change”. A draft of its findings is expected later this year, with the final product due in mid 2020.

It’s a document that, hopefully, will help change the energy debate in Australia, which has been stifled by ideology and 20th century thinking. More importantly, it will become something of a master plan that can be referred to by institutions looking to ensure the rules are keeping up with technology, and by politicians who want to know what is possible, or not.

The first version of the ISP released in 2018 was focused largely on transmission, and a couple of relatively conservative scenarios based around the major party policies that existed at the time.

But in the new version, AEMO was urged to go further. Ironically, it was the major energy utilities – those that own the bulk of the country’s coal and gas plants – that wanted to know what the long-term Paris target of no more than 2°C warming, and let’s try to cap it at 1.5°C, meant for their business, and investment decisions.

Others wanted to get a clearer idea of storage needs and the role of other technologies, particularly the “distributed” ones. like VPPs, EVs, and demand management, and the creation of renewable energy zones

Last week, AEMO presented what it emphasises is very preliminary modelling to illustrate where the grid is heading, and to provoke some discussion.

The big take away, of course, is the changing source of generation. There is nothing for coal, apart from small upgrades; and capacity in 2040 – under the central scenario – is about one-third of current capacity. Gas, despite a flurry, falls by nearly half; hydro is about the same.

The big moves are in storage, and about another 10GW will be needed for this, and solar and wind capacity will both be at around 22GW to 24GW.

But what does all this look like in the day to day running of the grid. That will be revealed when the full draft is tabled in December, but AEMO gave a preliminary insight into the changes.

Here’s an “average day” in NSW in February 2020, a grid dominated by thermal generation (coal and gas) with the midday hours seeing some solar – rooftop and large-scale, wind playing a minor role, and hydro mostly busy in the evening. There is a tiny bit of storage below the line (most likely coal going into pumped hydro).

But here’s what a “typical” day in NSW might look like in 2040.

Note that “thermal” capacity – coal and gas – is vastly reduced, relegated to redundancy by age, new wind and solar capacity, and cheaper imports. Large-scale solar dominates during the day, wind is strong at night, and storage plays a critical role, absorbing excess solar during the day (below the line) and playing a major role in the evening peak.

VPPs begin to play a role, and EVs are also visible on the grid.

Of course, this is just a “typical” day, and the profile will change with each season, and depending on the weather of the day, and in the end how much wind and solar is actually built in NSW, and where, and to what extent, the state relies on imports from Queensland, Victoria, and South Australia.

The AEMO series – and the energy wonks can find it here – also provides some insight into the hourly changes of supply and storage, and the different roles played by various technologies, both at large scale, and in the low voltage networks with distributed resources such as rooftop solar, batteries and EVs.

Just to give a taste, here is what it might look like at 11am on a sunny day (above). Solar dominates (as it did in South Australia last week), and in this case utility-scale solar production is more than 10GW. This is augmented by wind, hydro and imports, and coal and gas are providing just one-tenth of solar’s input. Some of that solar is going into storage.

At the distributed level, rooftop solar PV is charging EVs, filling up batteries, and pushing another 2,424MW back into the grid – twice the output of coal and gas.

Now let’s look at 8pm (above). The sun has set, so solar has gone, and the biggest single source is now storage. Wind, in the early evening, has decreased, and hydro, imports and thermal generation have ramped up. Households have stopped pushing electricity back into the grid, and are now drawing down, with the help of some household batteries, and the EVs are still charging.

How all this is managed – and the multiple variables that go with 5-minute interval trading and settlements and switches in demand and supply – is the primary challenge facing AEMO, whose job is to keep the lights on.

It’s not just a matter, however, of simply building more wind and solar, and closing down the old and dirty coal generators.

There needs to be enough transport to deliver the wind and solar resources, import and export with other states, and the storage available – not to mention the new rules that will facilitate the different technologies and business models, and will provide the right market signals to ensure the right resources are switched on at the right time.

Hence the need for a plan, and a 20-year blueprint. There won’t be one forthcoming from the federal government.

Here’s what it might look like, and you will see the shift here towards renewable energy zones to harness the best resources and link them efficiently to consumers. Storage also grows, but later than you might expect.

In South Australia, pumped hydro only appears on the 2040 time scale, and not before. That seems surprising, given the enthusiasm of the state government and ARENA to sponsor at least one project sometime soon, and the fact that federal energy minister Angus Taylor has three such projects on his underwriting shortlist.

A couple of other interesting things to note from the preliminary document: AEMO has downgraded the amount of home batteries and EVs that may be in the system over the next decade, has lowered assumed costs for both renewables and gas, and flagged that coal generators may exit sooner than thought.

  1. It now has more work to do – applying iterative applications to each model, identifying preferred development pathways for each scenario, and a detailed analysis of the risks and trade-offs to ensure a resilient future energy system.

Again, it is important to emphasise that this is only preliminary. But it’s gratifying to know that someone is looking at and planning for the future. If you spent too much time listening to federal politics, or reading some of the submissions to the nuclear inquiry, you would be forgiven for thinking there wasn’t one.

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6 Comments
  1. Patrick Comerford 6 months ago

    At this rate we won’t need to worry how much FF is used in the grid. We’ll all be toast.

  2. Ray Miller 6 months ago

    Good to see some forward pragmatic thinking going forward but I need to point out the the 3 building symbols in the centre of two of the slides are super important, that’s where we all live. What happens within those symbols is not only the centre of the NEM but also needs a significant focus on energy efficiency. Buildings are one critical element which either makes the whole energy system work efficiently or the centre of the system death spiral. Failure to address building energy efficiency will have a great influence on the overall costs, availabilty and size of the storage and generation needed. The building industry is just as needy of a transition as the energy system, with our current efficiency efforts to day very much subpar.

  3. Ian 6 months ago

    This plan looks like pure speculation to me. Like any forecast far into the future it speaks more of the writers beliefs and aspirations than about what will actually happen. This in itself is very heartening as we now see a move by the AEMO in its philosophy to an approximately 100% renewables grid.

    Obviously some big investments are going to be needed to accommodate 100% renewables and these could be inadequate, excessive, misdirected or appropriate.

    1. Renewable energy zones are already a thing and are needing transmission upgrades right now.

    2. Utility side battery storage is very much needed for the existing developments of wind and solar for these to be effective at this very moment.

    3. Battery manufacture is severely lacking throughout the world even in the Chinese industrial juggernaut and presents an unparalleled opportunity for this country to role out BEV cars, busses, trucks and mining machinery using its own battery factories.

    4.Pruning the grid and resupplying remote and rural customers with stand-alone renewables power systems is now possible and is becoming imperative.

    5. Using renewables for the energy needs of mines is an exciting growth area and needs highly focused research and implementation. This arena is a major Source for GDP growth and could allow very competitive minerals processing and value-adding to our mineral resources instead of the brute force shipping of unaltered rocks.

    6. We have already witnessed the extreme rapidity of wind and solar farm developments. Any amount of this can be thrown up within a couple of years. It’s the market and the supporting infrastructure that is the limiting factor.

    7. Distributed generation, storage and load is evolving rapidly 1. In its application from homes to businesses to factories and to farms and mines 2. In its size and proportion of the nation’s total energy demand 3. In its ability to stand -alone by supplying a larger percentage of the location’s energy needs, by storing this energy for non-solar generating hours and by managing the load to take advantage of the sunshine 4. In its ability to supply energy for traditionally gas and liquid fueled processes like cars and other transport, and gas heating of water and other processes.

    8. New export opportunities taking advantage of our renewables resources is in its infancy and may or may not become commonplace. How this will pan-out is anyone’s guess and could lead to great opportunity and also to great financial disaster especially as the transportation of synthetic fuels (hydrogen) is not quite worked out yet and the massive undersea transmission cables needed to cover the large distances from Australia to Asia are man-on-mars crazy.

  4. Les Johnston 6 months ago

    Interesting to see how Snowy 2.0 fits into the AEMO analysis. The comment of hydro remaining the same, suggests Snowy 2.0 hits a blockage.

  5. JackD 6 months ago

    AEMO’s 2040 location of generation should be overlaid with geographic map of load centres and that should fairly well dictate where transmission augmentation is required.

    Just a casual glance at AEMO’s map would indicate that the Western Victoria and South Western NSW transmission networks will have a fair task in front of them. Much of that RE generation will need to find its way back to Australia’s two largest load centres of Greater Sydney and Greater Melbourne and these two networks are thin.

    .

  6. RobertO 6 months ago

    Hi All,

    Another thought of the Day

    “We do not need any more PHES for our local Grid.”

    How can we get to 100 % VRE for our local Grid you ask? WE DO NOT NEED TOO!

    (Remember I want coal gone in 3 to 5 years and NG gone 3 to 5 years after that for our local grid).

    Hint: “What about backup supplies?’

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