Old school views and rules, why Cogati stinks, and why syncons are a stop-gap

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Highlights from the second day of the clean energy summit and why some are trying to see the future by looking into the past.

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Highlights from the second day of the Australian Clean Energy Summit in Sydney this week.

The “old school” session

The first session of the day had Clare Savage, (ESB Deputy Chair), Merryn York (CEO, Powerlink) and James Harman (CEO Energy Developments).  It was hard to find much positivity in this session. Savage is in favour of the COGATI  process and seems to believe that not much change will happen to the NEM generation mix much before 2040. Bad luck about global warming then.

I was disappointed that Yorke didn’t have anything to say about the Powering North Queensland strategy, the Copperstring project, or basically anything new at all in Queensland. Perhaps she wasn’t asked the right question.

Transmission session – “we want transmission and we don’t want Cogati”

Next up I attended a transmission issues session with Caroline Taylor (Transgrid), Rainer Korte (Electranet) Sam Button (Aurecon), Marcella Gannon (Tilt) and last but not least Tom Geiser from Neoen. This session was well chaired by Lillian Patterson from the CEC and was my favourite session of the conference because the speakers were informed and engaged and were asked the right questions.

The short-term  highlight, for me, was Tom Geiser’s analysis that if the South Australia-NSW interconnect had been built at the time RIT process started, it would already have paid for itself and both NSW and South Australian consumers would have been better off.

Tom pointed out that even if $10 billion was invested in transmission, costing say $1 billion a year in capital and operating costs, if it saved  just 2 hours of peak demand and maximum price $14,500 MWh per year across the NEM it would wash its face.

Not one of the panelists was in favour of Cogati, the proposal from the AEMC that is looking at coordinating generation and transmission investment. The transmission company representatives were more guarded in their comments (naturally) but it was pretty obvious they didn’t like it much. The wind and solar developers pretty much thought it stinks.

Those are, of course, my words not theirs. Each of the participants was able to point to the lack of information, the many detailed scenarios that would seem to cause problems, the complexity and the lack of perceived benefits. Of course it could be argued they are talking their own book. But I happen to agree with them.

Essentially I’ve also heard some representatives of AEMO express reservations or at least a complete lack of enthusiasm.

This session also noted that the Cogati process was supposed to develop the concept of renewable energy zones, but it seems to me the AEMC has frankly completely ignored that part of the mandate.

Even the idea of what an REZ actually is has yet to be developed fully, let alone what assets it’s supposed to have. Is it just a strong transmission link? Or does it have a dispatchable resource attached? Does it have a fixed MLF? Etc.

It wasn’t just this session but John Titchen, CEO of Goldwind, one of the largest investors in electricity in Australia, basically pointed out what a disaster the planning process has been for  renewable energy.

When you know 20 per cent of the energy is coming from wind and solar because the federal government designed a scheme to create that and there are additional state schemes, surely it should be obvious to even the most obstinate, most head-in-the-sand, most let’s-make-it-as-hard-as possible-rule maker (looking at you, Mr Pierce) that some transmission investment is going to have to come first.

My own contribution – Individual RITs may miss the forest for the trees

When you stand back, virtually every analyst comes to a similar conclusion about the NEM’s future. There is an overwhelming consensus, a shared vision, if you like.

The NEM is going to transition to a system where wind and solar provide the primary energy and a variety of services provide the balancing requirement. I just don’t think there is any debate about this from electricity sector stakeholders. How to do the balancing and the speed of change are still debated, but the basic concept is crystal, crystal clear.

It follows, then, that if wind and solar are going to provide the energy, then they need transmission. This doesn’t ignore behind the meter but only the fringe believes that aluminium smelters or data centres are going off grid.

Transmission takes four years to build, even when the regulatory process is complete. It takes seven years with the RIT process taking three years. The Texas build-out took nine years.

The ISP (Integrated System Plan) provides a pathway to achieving the build out. It may be an imperfect solution but it has one great virtue over individual RIT process and the totally micro AEMC/Cogati process and that is it can take a total view of the system.

A transmission line may not be justifiable on its own RIT but may be entirely justifiable as a component of a larger system. Who is to be the judge of that? Only the AEMO is in a position to make those calls. It has to be trusted in this regard.

This session also drew attention to the potential role of government, whether state or federal should accelerate transmission investment.

Government can make this investment because as Tom Geiser pointed out the investment reduces the price of electricity benefitting taxpayers.

Later the  investment can be rolled into the grateful arms of the transmission companies. This is no different to say how stage 1 of Westconnex was funded. It’s no different to the way land development is funded where the Government builds roads and schools.

No one thinks synchronous condensers are anything other than stopgap

There was some  talk that the AEMC’s “do no harm” rule was another pretty poor  effort by the AEMC.  There was fairly widespread agreement it would better (cheaper for consumers) if the transmission company built the syncon where it was most needed. An example is Electranet installing 4 syncons

An earlier pre conference AIE seminar had a very brief highly technical presentation from an AEMO network specialist. Although I could hardly understand a symbol on the page I did  get the message that managing networks with lots of medium size generators connected is quite the job.

That said, virtually all speakers who mentioned syncons noted that they were a very old technology solution and that better answers are surely out there. The focus seems to be on a combination of “grid forming inverters” and batteries.

However, it’s equally clear that the industry state of knowledge, or perhaps it’s just me, about what grid forming inverters can and can’t do and what their role is remains up for grabs.

Perhaps this is something ARENA could look at? It should be obvious we are going to end up with a grid that has next to no inertia. Sooner rather than later. During the day time solar and wind will be doing most of the work. Stepping back from the immediate problems of today and actually doing the work to facilitate that transition instead of putting sand in the gears is where policy makers and management need to go.

The battery and pumped hydro session

This session was chaired by Nick Cutler from EY and had presentations from Dan Sturrock (Arena), Marija Petkovic (Energy Synapse),  Andrew Stiel (Edify) and Andrew Catchpole from Hydro Tasmania.

Catchpole pointed out that Hydro Tasmania has at least 1GW of pumped hydro with 10-12 hours storage that can be developed at a cost of $1.5 m/MW. Obviously that cost is lower than Snowy. Hydro Tasmania also has 350MW of undeveloped conventional hydro.

In his view their market analysis showed that there was more value in the 10-24 hour market than other segments. I must say my own numbers don’t at first blush come to the same conclusion.

At the other end of the time scale Petkovic looked at the apparent excellent trading opportunities for short duration (say 15 minute) batteries in the five minute settlement market. These batteries could also play in the fast frequency response market, except that as usual the AEMC/AEMO  is well behind the game and we don’t have a fast frequency market.

Stiel, who as part of Edify has developed the Gannawarra battery in Victoria, pointed to the many issues with the rules that made introducing his battery problematic.

Essentially the battery and the solar farm became 3 DUIDs (separate connections) on the generation system and Edify’s own solar farm couldn’t even guarantee  preferential access to charge its own battery. This is another example of how completely hopeless the rules are when it comes to new technology and retro fitting it.

Andrew also pointed to the role of batteries in reducing the need for inertia by providing fast frequency response. We’ve covered this topic before in discussion of the pioneering work in Ireland on the topic and Bruce Miller’s observations that a market with low inertia is in many respects easier to control than one with high inertia. The low inertia model needs smaller changes to get back on frequency.

Dan Sturrock presented a chart which I think showed that ARENA has facilitated over 110 MW of battery development and was keen to fund something that could demonstrate other battery capabilities. I think we are up to something like 200 MW of large scale batteries in total across the NEM although I might have that wrong.  Pretty good achievement.

Gossip

Despite tougher times my sense is there are still more projects to be announced over the balance of the year. I expect the AER to finish its RIT navel gazing on the NSW QLD, NSW VIC small upgrades within the next month or two and the SA – NSW interconnect by Xmas.

Despite all the jumping up and down about pumped hydro the only project which might possibly get the notice to proceed this year is Genex’s QLD project.  I take Snowy as a done deal.

I suspect that despite the marginal economics some more batteries might still get into action.

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