Even business lobbyists say Australia can run on 50% renewables

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Can Australia reach 50% renewables without compromising grid stability? The experts – and even the major energy stakeholders of business and industry – all say yes. We’re just waiting on the right policy.

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Source: AP
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Can Australia achieve 50 per cent renewable energy without compromising grid stability? That was the topic of a panel discussion at the ABB Customer World conference in Melbourne last week. And it’s a hot topic in Australia right now, particularly in political quarters.

For a large part, government thinking on the subject has been divided neatly down state and federal lines.

While Labor states and territories have set targets for 40, 50 and 75 per cent renewables – and some have already met them – the Turnbull government regularly decries those targets as reckless, and insists on keeping the nation on the slow train to just 36 per cent by 2030.

But for the host of the conference – who also used the occasion to launch its portfolio of more than 210 digital solutions, called ABB Ability – the answer is an unequivocal ‘yes’.

The Swiss-based company with 125 years’ experience in the power industry now directs a great deal of its expertise and manpower to help renewables tie into grids, and to work out how this will be done in various parts of the world.

“What we have seen… in the past few years is that the trend towards 50 per cent, even above 50 per cent utilisation of renewables … is a trend that is not going to go (away),” said Massimo Danieli, the global business unit manager of Power Grids and Grid Automation at ABB Group.

“I think that the target of 50 per cent is just the initial target, and there will be more and more to come,” he said.

Independent energy expert Chloe Munro and ABB’s Massimo Danieli at ABB World 2018 in Melbourne.

Indeed, for the entire panel of experts who took part in the ABB discussion – including AusNet Services executive Alistair Parker; independent energy expert Chloe Munro and; Australian Industry Group policy advisor Tennant Reed – the answer to the above question was ‘yes’… but… not without the right policy.

Here’s what they said:

The policy guy

Tennant Reed, who is the principle national advisor on public policy for the Australian Industry Group, says there are three things we need to have in place to get Australia to 50 per cent renewables.

First, the technology needs to work and be cheap – “that’s well in hand,” he says. Second, the markets need to be receptive – and that’s going pretty well, too.

“There is a deep hunger among energy users for cheaper that what the market is serving up right now,” Reed told the conference.

“A lot of my members, who have been far from sold on big-picture energy transition stuff in past years, are going out and signing contracts, off-take agreements with big renewables projects, or installing their own generating capacity.”

As well they might. Brewing giant CUB is installing enough solar to match its total demand by the end of the year; vegetable grower Nectar Farms is going 100 per cent renewable on its new greenhouse (Australia’s biggest); zinc producer Sun Metals is using solar to underpin its regional Queensland expansion; and Sanjeev Gupta is turning to solar and storage to save and expand the Whyalla steelworks business. And many others are following.

The third thing you need is policy, says Reed, and that’s the missing piece.

“I want to make one thing very clear here: Policy at this point is not needed to make renewables competitive. They are competitive when we’re talking about choices of new-builds.”

The policy that we do need, he adds, can do two things: “it can bugger everything up, which is very much the role that it is serving at the moment; or it can govern the speed with which old assets close, and that will govern how much opportunity there is for new-build stuff.

“So when you have had a decade of back-and-forth at every election at the federal level and most of the states too, where the opposing sides represent total changes in energy policy, that’s a terrible environment for making decisions about assets that will last for many-multiple terms of government.

“We really need to break that cycle… Even though there are plenty of energy investments that on their fundamentals make sense, the specific nature of the energy policy that we wind up with, the climate policy that we wind up with, can make or break any of those investments. So we need an outcome.”

On the latest energy policy proposal, the Turnbull government’s National Energy Guarantee, Reed said that while it was currently “the only game in town,” there was still a lot of convincing to be done that it was the right outcome for all of the major stakeholders, including industry, business and consumers.

“I guess energy stake-holders are getting so flexible we might not even be able to stand up anymore,” he said. “We’ll just take anything, is the perception. But it’s not true.

“We need an outcome that works, and an outcome that is consistent with having competitive electricity markets that deliver what we need at an affordable price.”

Source: AP

The network guy

According to Alistair Parker, the executive general manager of regulated energy services at Victorian network operator, AusNet, there’s “a plethora of technical answers to the stability questions that we will face at 50 per cent renewables.”

“The capacity to manage that … is a technical problem, quite a complicated one, multidimensional, but ultimately, it will be possible to resolve it,” he told the conference.

But without stable and well defined policy settings, it could be a lot more complicated than it needs to be, and a lot more costly to consumers.

“I think the trick will be to resolve that at a price that our customers actually want to pay. And that we don’t force them to make some different decisions,” Parker said.

“We could rush out tomorrow and put in lots of fancy black boxes that would really help the stability … but if the reliability component of the National energy guarantee actually drives some of the more generation side to bring that forward, it would be a bit of a double up.

“So we’re going to have to work in lock-step, there, I think, to make sure we get the answers right.

“The technical questions, it strikes us, they’re complicated, but they’re doable. And you can definitely find those answers. It will be a matter of hard work and some investment.”

The independent expert

Chloe Munro, who was part of the panel of experts who advised Australia’s chief scientist, Alan Finkel, during his comprehensive review of Australia’a energy market, says the core of the Review’s findings was “encouraging governments to embrace this transition.”

But it was also about recognising that the NEM, which Munro herself had helped to “lovingly craft” more than 20 years ago, was no longer fit for purpose. And this needed strong government policy, and new market rules, built around whole-system thinking.

“AEMO has come up with a consultation on Integrated System Planning as a first step towards really taking a more coherent view of the way the electricity system needs to work into the future,” she said.

“It’s important that we acknowledge the new realities of demand. Compared to what we were thinking in the late 90s, there hasn’t been (increase demand).

“What is happening is demand is becoming peakier. And it will probably become more peakier and more volatile into the future.

“Managing that volatility, and the volatility that can also come from whether it’s the wind dropping or a large unit of a thermal generator dropping out unexpectedly, all of that is quite a challenge for the system operator.

“But more importantly, the economics of the system doesn’t actually reward the kind of resources that we need to manage the volatility.”

“So what we need are these flexible dispatchable resources. And I think the important thing is that flexibility and dispatchability won’t just come from generation,” she said.

“For me the big thing that really has been missing is really marshalling demand-side participation. There’s such huge opportunities to shift from always having supply following load, to actually managing load so to an extent, that can follow supply.

“And that’s really going to change the way that our electricity system operates into the future.”

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19 Comments
  1. Peter F 8 months ago

    We are going to find out fairly soon. Victoria/ SA and Tasmania as a sub-NEM will be 50% by 2020-21. At the current build rate in Queensland won’t be that far behind

    • Andy Saunders 8 months ago

      Well, Tasmania as a sub-NEM has been like that forever.

    • Cooma Doug 8 months ago

      I am sure you are right that this is possible and just plain as day certain.
      But the Libs did such a balls up with the nbn, I keep a little bit of doubt in my head.
      What the reality is from a grid manager perspective, the problem isnt supporting the new technology and plant, the problem is sustaining the old stuff.
      Any grid controller going on shift in a heat wave these days worries most about big coal gens.

      • Ray Miller 8 months ago

        Who would have thought coalers couldn’t stand the heat?

        Every component in the NEM is temperature dependent and needs to either be designed to deliver its rating at an ambient of 50C or be derated on the day, when the efficiency of those air-conditioners plummets like a stone. The networks need to “gold plate” for those couple of hours each year, the good news is every year those stress hours are increasing so we are making more use of the investment.

  2. Carl Raymond S 8 months ago

    When I see 50% written, I read it as 100%. We can all see the fall and fall in the price of wind, solar and storage. By the time any 50% target is reached, it’s kind of obvious that the incentive to keep going, cheaper energy, will be stronger than ever. It’s like putting a plate with two tim tams in front of a hungry person and saying ‘try one’.
    The coal industry understands this perfectly, hence their dogged determination to avoid any meaningful target.

    • Andy Saunders 8 months ago

      Sorta. New problems will arise as the penetration increases.

      As an example, let’s say there’s no renewables anywhere in a system – it’s dead easy to add the first installation as it is barely a drop in the ocean. At some point as penetration increases, though, the zero marginal cost lowers then forces out high-cost generation – the first effect. Then dispatchable capacity less tripped plant sometimes threatens to be less than demand peaks. Then ramp rates may be greater than dispatchable load-following capacity. Then… you get my point – various new problems arise at increasingly higher penetrations and have to be dealt with.

      The point at which each of these happens depends on the circumstances of the grid – proportion of interconnect capacity, degree of load variability, degree of correlation of renewables generation etc etc.

      So it’s not altogether a slam dunk to just keep on increasing renewables penetration. Although as costs fall over time, renewables will indeed overwhelm the economics of practically any other form of generation.

      • Mike Westerman 8 months ago

        Except that Norway and Tasmania are already at 100% RE so a first step is careful and accurate definition of the “problem”.

        • Glynn Palmer 8 months ago

          Mike Tasmania is currently generating 13.3% 200Mw of their electricity from gas and exporting 200Mw to Victoria..

          • Mike Westerman 8 months ago

            No doubt. Having it doesn’t mean you have to use it. Which was my point: define the problem without the loose language. Who cares what you have: customers want to know if you can meet their need in a way they find acceptable .

      • Carl Raymond S 8 months ago

        Agreed. The second 50% won’t look like the first 50%. I should probably have put a tim tam and a mint slice on the plate. Still not phased at all because of counter-balancing effects to the challenges you describe:

        It’s much easier to extend a system than to invent a system. Going from 0 to 5% is hard. From 50 to 55% not so hard because you already know all the ‘how to’ and ‘how much cost’ and ‘how much revenue’ answers – information banks are pretty fond of.

        At 50%, we’ll have a plethora of data regarding weather effects, the right amount of fast storage, the right amount of big storage and how much can be achieved with demand management. Also the optimal mix of wind/PV/CSP/hydro/batteries for each region will be well understood.

        Finally, people will have had a taste of 7c/kWh free-fuel energy. The pressure on govt to phase out anything that requires digging up the ground and involves expenses such as pipelines or train-cars will be overwhelming. If they don’t grant the people’s wishes, they’ll simply go off grid, with the latest $5K 100kWh powerwall. That seems like a big battery now – but once upon a time a 32″ TV was ‘large’.

      • Cooma Doug 8 months ago

        When at 50%, tell me a solution to the problems that is not renewable. It is all renewable solutions from now. I remember my CEO in 1995 talking on a big old black phone planning to purchase a hugely expensive main frame computer. This would include a multi million dollar communication system across the organisation.Most of his rant was about the futility of PCs and the internet. Luckily we soldiered on and pushed through.
        Any significant installation of renewables now includes stability synergy far better than the fossil plant it replaces.
        We will be able to load shift to a degree that provides more than enough reserve and stability than the grid has ever had. That will be the case sooner than we can imagine if we rely on the information floating around parliament.

      • Ian 8 months ago

        Andy you forgot to add the preamble to your assessment: at the last 0% renewables point in time, air-conditioning became cheaper and more popular, the midday summer demand increased dramatically requiring increased generation capacity to cover this demand. 100% FF could not cope. Solar power was the best-fit generator type for this new load. Solar energy was very expensive and required generous subsidy to activate. Despite solar being relatively easy to integrate into the grid, vested interests fought tooth and nail to limit this. Even though overall renewables percentage is way lower than coal power generation, these same gentailers act as though renewables were already at 50% and threatening the grid . Their narrative is :……. add the rest of your post! 😉

  3. John Saint-Smith 8 months ago

    “The policy that we do need, he adds, can do two things: “it can bugger everything up, which is very much the role that it is serving at the moment”

    Are you listening Mr Turnbull? He’s describing your obituary.

    “or it can govern the speed with which old assets close, and that will govern how much opportunity there is for new-build stuff.”

    Still paying attention Malcolm? He’s offering you a triple by-pass. It’s not too late…

  4. Cooma Doug 8 months ago

    The independant expert is a 10

    • Ren Stimpy 8 months ago

      Yeh I reckon ‘back in the day’ she would’ve been a Bo Derek sort.

      Btw Dougie I’ll be picturing you as a Dudley Moore from here on.

  5. Ian 8 months ago

    Why does everyone harp on about percentage renewables without really defining what this means. One can understand 0% renewables as meaning no renewables or 100% renewables being all solar, wind, water etc, but anything in between needs careful definition. Can anyone provide the “official” definition for percentage renewables.

    • RobertO 8 months ago

      Hi Ian, It’s nice and simple, it’s a mathematical term only and you then need to relate it back to the statement in terms that it was made. The headline statement is “Even Business …… can run at 50% renewables” is very simple, over a average full year renewables (RE) can supply 50% of the energy need to run Australia. Note that sometimes during that period RE will supply more that 50% and sometimes less. It does not define what type, where, how or when and it does not matter for that statement.
      Lots of people define the % as yes we should do this or not do that. Take hydrogen cycle as an example, just because it’s on 10 or 15 % efficient they beleive we should not do it (they are putting the horse behind the cart, not at the front of the cart where it belongs). In the board room the first question is always “Can we make money out of this new process, or can it save us lots on money”
      Only if the answer is a resounding yes will the process be considered. Then and only then will they ask about the efficiency of the process and so what if it’s only 0.5% efficienent (they making money (or saving lots) and they do not care about effeicieny except if they can increase the effeicency how much more money can they make or how big the saving will get)

      • Ian 8 months ago

        So % renewables is the quantity of electricity produced in GWH for a specific grid system over a year / total electricity produced in GWH as a percentage?

        Could it not also mean percentage nameplate capacity of renewables generators vs nameplate capacity of all generators?

        Or perhaps quotas of allowable generation mix at any instant such as renewables have an allowable access to 50% of grid exports at any particular moment (in GW) the rest is preserved for fossil generators? A type of merit order system or firming capacity requirement?

        • RobertO 8 months ago

          Hi Ian, English is such a lovely language. So your sitting in a room on a country train and you say “Look Out” to another person in the same room. What does it mean?
          If there sitting in the room and they are leaning out of the window it is different meaning to another person whom the waiter is about to spill hot coffee on that person, and another person it may mean just look outside at what is going past. Two words with three different meaning (about to hit their head, about to wash in hot coffee or about to see something interesting).
          The operative words (run Australlia) tell you that it’s not name plate (can be turned off and not running), it’s not about quota because RE is so vairable (not able to run), it’s not about merit order (because it says run Australia). The whole article tell you what the heading means.
          As an after thought if Labour / Greens form Gov in the next election and Labour has a target of 50% RE they will fail miserably. About 2022 they will be at about 75% (they will overshoot the target)

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