Plunging battery costs raise doubts over Tasmania's $3 billion hydro plans | RenewEconomy

Plunging battery costs raise doubts over Tasmania’s $3 billion hydro plans

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Tasmania’s grand plans to spend $3 billion on pumped hydro and new links to become the “renewable battery” of Australia may be undone by the plunging cost of battery storage.

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Tasmania’s plans for a $3 billion investment in new pumped hydro schemes and a new link to the mainland may turn out to be little more than damp squib, given concerns raised by two new studies in the proposal.

The idea of adding 2,500MW of pumped hydro into Tasmania’s existing hydro system – and using this and its considerable wind resources as a “renewable energy battery” for the mainland – was unveiled with much fanfare by prime minister Malcolm Turnbull, premier Will Hodgman and Hydro Tasmania on Thursday.


But the crucial ingredient in the plan is the construction of a new $1 billion inter-connector to carry all that renewable power to the mainland. And a study by John Tamblyn released on the same day raises considerable doubts about the economic viability of such an investment.

In one “neutral” scenario, drawn up by the Australian Energy Market Operator, the benefits might outweigh costs over a 20 year period by just $20 million. And these benefits might be eroded if battery storage costs continue to fall and utility-scale batteries become widespread, as many predict.

Further complicating the matter is Victoria’s own renewable energy target, which will likely deliver 5,000MW of new capacity by 2025.

“That means that building new renewable generation in Tasmania (1,200MW of wind), timed to coincide with commissioning of the second Bass Strait inter-connector, would not increase projected market benefits,” the report says. Instead, it is likely to “lead to oversupply in the southern regions (Victoria, Tasmania, and South Australia).”

And, in any case, AEMO, says, “additional power system security support is not needed in Victoria because support services (such as Frequency Control) are adequately provided by existing generators in Tasmania and Victoria.”

tasmania wind

Tamblyn’s own conclusions are for the Tasmanian government to be cautious. He notes that Tasmania could likely support 730MW of additional wind capacity even without the second inter-connector, and a further 365MW with the new link.

He says that if the new inter-connector is to go ahead, it will likely have to be conditional on a new link from Victoria to South Australia, to ensure that diversity of renewable generation across the regions is used more effectively.

“It reduces the need for higher-cost gas generation by allowing renewable generation in one region to complement the intermittency of renewable generation in another region.”

But even this may not be enough to justify the investment in the other scenarios, which canvass stronger climate targets and greater uptake of distributed generation. Of course, stronger climate targets are desirable, while greater distributed generation seems inevitable given the plunging costs of solar and storage, and the soaring costs of grid power.

AEMO’s 45 per cent emissions reduction scenario, suggesting a more robust climate target for 2030, concluded that despite delivering greater fuel cost savings in this scenario, due to an accelerated retirement of brown coal generation, the interconnection provides minimal capital deferral benefits.

“Increased uptake of large-scale battery storage in all cases dampens the benefit of the additional capacity access provided via the inter-connector,” it said.

The low grid demand scenario, contemplating greater uptake of energy efficiency, rooftop solar, and distributed generation, also didn’t look good for the inter-connector.

Screen Shot 2017-04-21 at 124001 PMHowever, Tamblyn said he could not quantify the other benefits of the new link – such as added security, which is critical given that the inquiry was commissioned after the existing Basslink cable was inexplicably cut in 2015, took six months to repair, and coincided with a drought that reduced dam levels and forced the state to turn to diesel generation and load reductions.

But there are other questions. Adding 2,500MW of pumped hydro looks like a bad case of oversizing, given that would be more than twice the maximum flows of the interconnector. And there may be environmental concerns – the Mersey Forth system component involved run of river hydro.

The study does include some interesting scenario planning from the AEMO, and its predictions of the energy mix by 2036. In all scenarios, the amount of coal fired capacity is reduced dramatically.

The study draws attention to just how difficult it is to predict the evolution of energy markets over the next 20 years, let alone the 40 year life of new assets such as inter-connectors.

Many prominent people say new inter-connectors are an essential ingredient to a decarbonised grid, because renewable energy from one part of the country can deliver excess capacity to another. But the whole assumption may be undone by the proliferation of distributed energy, and the plunging costs of battery storage.

One thing that is clear – and this comes through in the reports – is that the energy market will change, and change dramatically, as the various AEMO scenarios highlight.

Under the “neutral” scenario, AEMO predicts:

  •  63% (15.5GW) of the existing coal generation fleet may retire by 2036.
  • Up to 45.3GW of new generation may be required by 2036, comprising wind (20%), large-scale photovoltaic (PV) (29%), gas-powered generation (GPG) (27%), and rooftop PV (25%).

Under the 45% emissions reduction scenario, AEMO projects, by 2035–36, the retirement of 18.2GW of coal plant and the installation of:

  • 27.5GW of large-scale renewable generation, comprising 14.8GW of large-scale PV and 12.7GW of wind.
  • 11.7GW of GPG.
  • 12.0GW of rooftop solar PV.
  • 3.5GW of battery storage.

Under the Low Grid Demand scenario, AEMO projects, by 2035–36, the retirement of 18.8GW of coal plant and the installation of:

  • 13.4GW of rooftop solar PV.
  • 2.5GW of large-scale solar PV.
  • 4.7GW of GPG.
  • 5.8GW of wind generation.
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  1. George Darroch 3 years ago

    “Instead, it is likely to “lead to oversupply in the southern regions (Victoria, Tasmania, and South Australia).”

    What’s wrong with that?

    Edit: and what if coal draws down more quickly? I see this as a missed opportunity to move towards a truly intelligent zero emissions system.

    • Chris Fraser 3 years ago

      I’m hoping they can still make the case for the interconnectors. It will make for better trade with Tas, and give NSW and QLD people more choice of clean energy sources.

    • Matt 3 years ago

      Oversupply that can be stored if there is a place to store it.

      • Mike A 3 years ago

        What storage media are you talking about that does not lose power, involve use of a dirty manufacturing process or is not expensive? Electrical storage has a big cost and even worse, if it is batteries that are emergency supply, you may never use them. The other thing is that there are energy losses with electrical batteries. It is not 100 units in and 100 units out. Heat energy storage seems to be taking over the world and does not have the same issues. Even the Chinese just finalized a tender where there is solar plus heat energy storage. Much cheaper and it has only just begun to develop.

  2. phred01 3 years ago

    If this is true then Turncoat’s big battery in the snowy is in doubt too

    • wideEyedPupil 3 years ago

      That would also require more transmission potentially. Although VISA already self-power
      Behind the meter and export excess to the grid from there by burning waste paper. They choose the location for the transimission capacity I’ve read.

  3. MikeH 3 years ago

    I would extremely dubious about any cost-benefit study that does not take into account the longer term requirements for decarbonising both the Tasmanian and mainland economies as dictated by climate science.

    While efficiciency can reduce demand, we also need an “electrify everything” approach to remove the carbon emissions from transport, housing and industrial processes that is likely to lift demand.

    Climate scientists also believe that we will almost certainly need to find ways to remove carbon from the atmosphere

    If you factor in the current estimated cost of extraction at US$150 per tonne, the cost-benefit analysis of adding more long life renewable infrastructure would make a lot more sense.

    We had a trial run of incorporating a small fraction of those future costs into the grid during the brief period of the carbon price. During that period Tas hydro was exporting as much energy as it could.

    • wideEyedPupil 3 years ago

      Actually it was the scheduled ending of the carbon price that had them totally drain the bath because it was a windfall profit they’d either take or forfeit. And then the rain to refill didn’t come.

      • Tom 3 years ago

        It was a little bit more than that. After the carbon price got repealed Tas still continued to generate a hell of a lot more electricity than they needed to from our two long term storages (Great Lake and Lake Gordon) – there was no effort to restore reservoir levels.

        The winter of 2015 was looking pretty good for a while – we got good inflows in May and June and then had a couple of very wet systems in July, but at the start of August it was like someone turned the taps off.

    • Chris Fraser 3 years ago

      Extraction costs (calculated by those who know science) at US$150/t, would appear to make a complete mockery of the optimistic AU$13/t proposed by Australia’s own Emission Reduction Fund. I say rest in peace, ERF.The Australian effort is not even extraction, in most cases it’s a kind of sequestration or abatement, which is much slower than the rate the emissions go up. Is there any government being serious about extraction ?

  4. humanitarian solar 3 years ago

    No other way to express a “truth” than say the untold evil in diverting public money into big business assets leading to questionable benefits. Always a new angle on making a buck while rolling out greenwash. Reality is there’s past over investment in grid infrastructure and lobbying for more is deluded or misinformation, when distributed generation and distributed storage makes new interconnectors a low priority.

    • wideEyedPupil 3 years ago

      New utility scale generation will always require more transmission. That’s not where the gold plating was going on
      Though, it was fortifying the networks for peak loads that never came. I know you don’t like utility scale anything but wind compliments solar and it’s cheap, much cheaper to use larger fans the domestic sized fans.

      • humanitarian solar 3 years ago

        The utility scale is getting smaller as it’s more distributed and closer to where it’s needed. Can’t see why we don’t begin dealing with local areas then see what regional infrastructure needs augmenting after decentralising the grid.

        • Colin 3 years ago

          “…after decentralising the grid.”

          Not going to happen. Do you have a link to a credible source to back up such claims?

          • humanitarian solar 3 years ago

            The grid is relatively de-centralised compared to ten years ago. It’s no longer based around coal deposits and generation is relatively more “distributed”. The question is how “distributed” will it move to over the coming decades. I agree with your perspective by the way, that both pumped hydro and batteries are important. It will likely be an evolving knowledge base around toxicity of batteries versus environmental disadvantages of pumped hydro versus costs in different levels of scale. Purely a scientific decision making process if we can get “vested interests”out of the way and form truly science and environmentally based approaches.

      • Colin 3 years ago

        I agree.

        I hope both Tas and NSW pumped hydro schemes go ahead. If we are to decarbonize transportation we will need massive increases in electricity to power hundreds of millions of EVs.

        Pumped hydro shouldn’t be written off yet.

        • baseload renewables 3 years ago

          Hopefully we’ll go one better and build good train networks to decarbonize transportation.

  5. humanitarian solar 3 years ago

    Speaking of evil, a few days a ago a builder I hired began evangelical aspirations with the discussion, while informing me God has everything in hand with global warming that isn’t really happening anyway. And the end is near and God will be stepping into the worldly scene to save the believers while the rest perish. This all seemed to justify an $80k spend on 2x new power poles for his hobby farm with massive shed with nine toilets for a kind of new religious movement needed for the times ahead, with my builder leading. I said less than half the money would have purchased a luxurious offgrid setup. My evangelist builder seemed undeterred and after I pointed out the wall I put up was heaps better than the one he did, and that given my ability is 5% of his, I sacked him saying he had no respect at all for “God’s” kindly provided raw materials.

    • solarguy 3 years ago

      You may be pleased to know HS, that my big hybrid system is finally up and running and has been for 9 days now! In this time the import meter has been frozen. Yep not a skerrick, zero, zilch, not even a pooftenth of a picco watt. And that’s running A/Con, TV’s, dish washer, washer, kettle, micro wave and…………………………………………………………………………………………………………..
      you get the idea.
      Do I feel good, even a little smug….. you bet I do!

      • humanitarian solar 3 years ago

        Awesome are we going to hear about your choice of gear and rationale on one of these sites? I’m very keen.

        • solarguy 3 years ago

          Yes I would like to, but as I said before it’s not up to me, it’s up to Giles.

          • humanitarian solar 3 years ago

            I think it would be very encouraging to get some good installs on one of these sites because helps all of us learn as we know allot of people are currently making their way through a maze of offers of various equipment and configurations. Also for the other installers, gives them something to critique. Sets a standard. Separates the wheat from the chaff and gives examples of installs suiting particular applications.

          • solarguy 3 years ago

            This system that I designed and installed is much bigger than the average punter would entertain for a grid connected hybrid, mainly on cost, but I wasn’t too concerned as it’s for my own usage. It is a case of what can be achieved ( grid independence)if someone wanted to put the bucks in for a system like mine and had the same loads to satisfy.

    • Colin 3 years ago

      “Speaking of evil, a few days a ago a builder I hired began evangelical aspirations with the discussion, while informing me God has everything in hand with global warming that isn’t really happening anyway…”

      I have the same problem with a close relative who is an atheist.

      He denies global warming and thinks that the science is flawed. He is evangelical in evangelising this myth.

      I consider him evil but don’t consider it anything to do with his aetheism, do you?

      • humanitarian solar 3 years ago

        No I don’t actually consider people to be evil, I was just using religious terminology although as a human service worker, I’m trained to understand how the problem is developmental. With your relative, there are research studies of “fundamentalist religious people” who have children who switch to being fundamentalist scientists. It is a level of cognition called “concrete operational thinking” or another way of looking at it is a mere switch from “belief” to “un-belief”. With your relative specifically, what your highlighting is an “attachment” on the part of your relative, an investment, emotionally, or money, or security, or comfort of lifestyle or something, to want to see global warming as false. When making these assessments, the thing to do is assess the persons decision making process, their methodology. In this instance you note it is not science – reason applied to data, it is a belief system, a personal motivation and the science is like an inconvenient truth.

        • Colin 3 years ago

          Well your credibility just went further down the drain.

          As someone who has trained and worked in Counselling and is now pursuing a Law degree I find your post as jibberish

          • Chris Fraser 3 years ago

            HS I thought it made sense though.

          • humanitarian solar 3 years ago

            I disagree with your view that the personal orientation is irrelevant. You claim your trained in counselling, say my post is gibberish and yet you don’t share from what counselling training or model your judgement is made. Sio my judgment is get an experiential orientation to personal development instead of your present religious belief system, which is if you study cognitive psychology and developmental psychology, a lower level of development. Spirituality is an experiential journey not a religious belief system. As a social worker and as a result of my studies in psychotherapy and arts, I’m expected to be versed in the basic developmental theories and I suggest you do in an effort to understand your community and all the different social movements and self development programs in it, rather than simply carrying around an ongoing iteration of a religious belief system, because that is not science. That’s the source of your need to bring us all together, the need to find a scientific methodology on which we all agree to base awareness upon.

          • humanitarian solar 3 years ago

            If your trained in the basics, you would have trained in rogerian counselling method. e.g. they use it on the phones for lifeline and I worked there and found it effective. Through expressing emotions, people feel heard and gain awareness on their inner experience and learn to take responsibility for their emotions and make empowered decisions and actions. In my view and with that example, it’s a process of two people using a process of observation, expression, listening, feeling and gaining insight and new responses from there. For Christians, prayer could be viewed in a similar way, praying for understanding (the best kind of responsible prayers), remorse about any misadventures and gaining intuitions, inner guidance on how to respond and move forward. So no matter whether a human service worker is religious or not, it’s first and foremost a “process oriented approach”. Different psychologies or counselling models have different orientations though they all have a process oriented approach, not a religious “belief system”.

          • humanitarian solar 3 years ago

            Okay Colin, as you appear “genuine” I feel impelled to take your concerns more seriously. Firstly mate I’m not Christophobic as I’m not against any people. Your comment does highlight you identify exclusively as a Christian and appear to perceive I’m against you. No I’m not. I support religious diversity and have friends you are Christian, are many religions and spiritualities and have friends trained as priests, a couple currently acting in such a role. What I recognise is Christians vary a great deal in the development of their “faith” and I regard faith in a higher power and an experiential journey towards ideals as a very positive thing to dedicate one’s life to. I would hence call myself “spiritual” if anything however I would suspect this isn’t good enough for many Christians who seem to want me to regard God with a particular name, support their brand of interpretation, go hear their religious “cannon” and attest to it exclusively being the one and only correct interpretation. With my orientation I’m highlighting a commitment to social science, knowledge bases of various psychologies etc does require us to have a primarily “experiential” process to awareness. “Belief” as a methodology is vulnerable to more errors of interpretation and used to justify various evils. The difference between wisdom and knowledge is one is a primarily experiential journey of awareness and I encourage that orientation over a “belief system” where people “rationalise” often in a disconnected way from their experience leading to massive incongruence in their lives. The shift to “science” is an attempt to put an end to such a process and instead use a process of “reason” which is the mind applied to data, including the social sciences and psychology with their experiential orientation. So I don’t hang around all Christians because it’s too painful and tedious, only those persons with an experiential orientation to their personal awareness, including sometimes Christians.

  6. WR 3 years ago

    The utility of interconnectors between Tasmania and Victoria will depend on how much offshore wind generation is built in Bass Strait, and off the southeast coast of Victoria and the southern coast of NSW. This is because these are the areas that retain significant wind speeds when large high pressure systems depress wind generation simultaneously across SA, Victoria and southern NSW, and so it will be those turbines that will be competing with generation from Tasmania.

    It’s hard to see why you would want a lot of pumped-hydro storage in Tasmania. They would be better off just adding extra wind generation, thereby reducing the demand for power from their conventional hydro dams. This will allow the conventional dams to retain more water for periods of peak demand when they can obtain higher prices.

  7. Ian 3 years ago

    Tsk tsk Giles, you left out one important point. What is the capacity in MW of this proposed second interconnector? I tried to do a quick search and found a feasibility study by Hon Warwick Smith 48 pages of it – no mention of capacity there either.

    I practiced biting the tip of my pinky finger saying one billion dollars , like Dr Evil, but still no inspiration on the link’s capacity. How can we judge for ourselves if this sounds like a good idea without this tiny, teenie, bit of information?

    Anyway, assuming it’s the same as the old Basslink of 600MW and assuming it supplies power constantly to the mainland 24/365 and that it is deemed to last 20 years then the cost per KWH (without maintenance costs etc) would be 1c/KWH. That’s right folks 1c/KWH.

    Remember that Tasmania’s hydro is not much like a battery in that it needs electricity to recharge. The dams receive from heaven’s bounty- free of charge.
    Incorporating wind, probably at a better capacity factor than the mainland and a sprinkling of solar you may not need to bother with pumped hydro in Tasmania – leave that up to the Snowy scheme- to achieve sufficient excess ‘baseload’ capacity to export to Victoria. We know that Tasmania’s hydro costs in the order of 5c/KWH and wind and solar can achieve 5 to 10c/KWH LCOE, adding just one more cent to this is ,like, nothing.

    The business case for pumped hydro in Tasmania may be dodgy, but that for once-though hydro and wind exported via new and existing Basslinks is beyond reproach. How long will it take for the cost of battery storage added to wind or solar on the mainland to reach 1c/KWH or even 10c/KWH? Hydro in its standby and large storage functions beats battery storage hands down in terms of GWH of storage . We are told the existing dams produce 9000GWH of energy a year this very much illustrates their overall storage capacity, many orders of magnitude over batteries.

    I think the chance of a new Basslink becoming a stranded asset are very small

    • MP 3 years ago

      ” Adding 2,500MW of pumped hydro looks like a bad case of oversizing, given that would be more than twice the maximum flows of the interconnector. ” I would assume that means the second interconnector capacity is less than 1250MW.

      • Ian 3 years ago

        The problem with pumped hydro is the cost of pumping water from tail dam to head dam. This type of energy storage device must compete with other forms of storage, namely batteries.

        Optimistically the round trip efficiency is 80%, the cost of construction for pumped hydro according to Tim Forcey’s report in 2014, Melbourne Energy Institute, is about $300/KWH. This puts pumped hydro about on par with batteries.

        Tasmania’s hydro holds enough water on an average year to produce 9000GWH of electricity, it uses 10000GWH of electricity. It’s hydro turbines can produce about 2500MW of power. It’s demand varies from 1000MW to 1800MW. Without any upgrades to the generating capacity, at any one time there could be between 1500MW to 700MW of power available for export.

        If the total Basslink transmission capacity is 1200MW, Tasmanian Minimum demand 1000MW, then the Maximum wind power that could be installed to cover the worst Demand scenario would be 2200MW . If this had a capacity factor of 40% the energy generated in a year by wind could be 7700GWH. Increase the Basslink to 2000MW, then Maximum wind capacity would be 3000MW and energy yield 10500GWH. With a bass link of 3000MW and a peak Tasmanian demand of 1800MW and a becalmed wind scenario, the hydro dams would need to generate 4800MW of power to fully utilise the bass link interconnector. The dams could not sustain a power out put of 4800MW for very long before compromising water storage capacity. There would obviously need to be a trade off between wind capacity, hydro capacity and bass link transmission a certain amount of demand management in Tasmania to optimise the sizing of these resources. Strategies like domestic solar, heat pump space heating and housing insulation could reduce the Tasmanian winter peak in the morning , day and evening so that peak demand would drop to 1500MW, perhaps battery storage or a small amount of pumped storage, say 500MW could reduce the need for excessive hydro generating capacity and still allow for a decent sized, and fully utilised Basslink and wind generation capacity.

    • Tom 3 years ago

      The feasibility study was for a 600MW capacity second interconnector.

  8. Ray Miller 3 years ago

    I’m a little disturbed that all the variables are not considered. What I mean, as has been demonstrated with SA and TAS, any critical link/component which fails has expensive consequences, by doubling the links a very significant improvement in availability/reliability is achieved. The benefits are many but how we pay for them is where the wheels fall off. Which at present gets back again to lack of leadership and the policy vacuum.

    • Tom 3 years ago

      Even better reliability would be attained by keeping the reservoir levels higher. 60% full on May 1 and 80% full on Dec 1 would be my aim. A lot cheaper too – 4000GWh of foregone generation at $50/MWh (which is what we should be able to buy it for, although the price troughs have been a bit higher in the last 3 months) = $200 million.

  9. Mike A 3 years ago

    As it should. We should not be spending money on dams if there are cheaper or better alternatives. Solar plus battery for a start is changing the landscape and prices are diving. It takes so long to build or change a dam that by the time that has happened renewable energy plus power storage will make a different environment.

  10. Alistair Spong 3 years ago

    The proposed route through Western Port Bay, looks interesting. Some very valuable ecological areas tucked in there . I wonder why they wouldn’t go to Wonthaggi given it’s closer and has the desal plant , or even Geelong and gain some grid stability from the West ?

  11. Joe 3 years ago

    Poor old Mal. Every time he jumps onto the latest whiz banger idea for electricity it all turns to shite. ‘Clean Coal’ and ‘Higher Efiiciency Coal Power Plant’ all dropped in record time. ‘Snowy 2.0’, all we really got was a new feasibility study, .it has been done before ages ago and deemed a no go. Now it is ‘Tassie 2.0’. I can’t wait to hear what next weeks big idea will be…anything for a headline that distracts from his leadership war with the Abbott. Why hasn’t Big Mal championed Bio Gas. There are sewage treatment works all over the country and situated where the populations exist. It seems too easy and obvious to me.

  12. Chris Harries 3 years ago

    Just looking at the energy loss situation alone…. pumped storage represents approximately 20 percent energy losses in pumping, from fluid flow friction. A single passage of power across the Basslink interconnector one-way represents a further 10 percent power loss. If Tasmania is used as a buffer exchange – i.e. importing surplus energy off peak and exporting it to maintain national grid stability – then there is a further 10 percent loss.

    At some point, location has to come into the equation, as the above article spells out.

    It’s also useful to look at the original purpose of the Basslink interconnector and how that came unstuck over time. Back in the 1990s that project was inspired by the very high peak energy prices in the NEM owing to a shortage of peaking capacity nationally, and this was seen as a huge sales opportunity for Hydro Tasmania. By the time Basslink was built in 2006 that high-price advantage had virtually evaporated as national energy demand dropped and a number of peaking gas generators had been brought on line on the Mainland.

    Once suspects that changing circumstances may again result in cost-benefit mathematics becoming outdated in the space of a few years. Tamlyn’s note of caution should indeed be heeded.

    • Just_Chris 3 years ago

      A 30% bigger wind farm in tassie doesn’t sound like a big price to pay to replace yallon

      • Chris Harries 3 years ago

        Increased wind generation may make the difference between Tasmania being a net importer to becoming self sufficient electrical energy. There’s quite along way to go from there to becoming a net exporter.

        There is certainly scope for Tasmanian hydro and Snowy hydro to contribute to stability for the national electricity market. This is already the case and within reasonable scale this role can be enhanced.

        In Tasmania a business case can stack up for enhancing wind generation in Tasmania with the hope that there would be a net export in average to above average rainfall years. The existing Basslink interconnector has the capacity can handle that level of load.

        It’s another thing altogether to essentially convert the Tasmanian system from base load to peaking, whereby mainland generated energy is shunted both ways, resulting in energy losses of up to 40 per cent in transmission and possibly pumping. We can be pretty sure the business case for that idea won’t stack up.

        As the above article mentions, battery technology may soon become so advanced as to render that idea outmoded before it could be built.

        • Just_Chris 3 years ago

          I think the idea of using Tassie as the “nations battery” is misleading. The idea that you’d charge Tasmania from a wind farm in south Australia and then discharge it to power Sydney is a bit bizarre, which is why I pretty much discounted it from the word go. Whenever I see energy discussions I always look at the parts and think how they’ll be used in reality with the rest just being background noise. Adding another 0.5-2GW of interconnector between Tasmania and the mainland would be great as it would reduce the whole sale price of power by increasing the number of players in that part of the grid. It also provides a bigger link between 2 parts of Australia that are windy at different times which will help reduce the need for storage. Adding that link with no further additional capacity would be pointless as the Tasmanian grid is not capable of providing 1-1.5GW for itself and then 0.5-2GW more for the rest of the nation. There are plenty of times where the difference in the price of electricity is 50% or greater so you could conceivably charge and discharge over the baselink(s) and make money but, as you rightly point out, this is a bit dumb. A far better scenario would be for 4GW of wind to be added in Tasmania with 2GW of pumped storage connected to the mainland via a 2GW connection. You could imagine on a windy day Tasmania self consuming 1.5 GW from wind, exporting 2GW and storing 0.5GW. On a windless day it might get 0.3GW from the wind, at that point it could turn on it’s conventional hydro probably up to around 1.5 GW for Tasmania and could sell is stored water across the day to the highest bidder to cover any peaks. On those windless days in Tasmania you could imagine Victoria exporting power to Tasmania from excess capacity in its wind or solar farms but this would be the exception rather than the rule. None of this would compete with batteries because the time scales are different as are the payback times. pumped hydro would not need to be used every day and would last 50 years that is a different beast to a battery. This is a good thing – diversity is king in the grid, different technology mixed together for the cheapest outcome.

          The numbers above are completely made up and clearly more work would need to be done to get all of the parts of the puzzle scaled to a sensible size but I think that a combination of increased wind, pumped hydro and greater export to the mainland could be a fantastic asset in the future grid. 2-4GW is the most it would probably ever cover so there is still a huge space left for other technologies. Right now Tasmania has the cheapest power in the NEM and the greatest opportunity to go 100% RE cheaply. linking the Tasmanian grid more strongly to the mainland grid seems fairly sensible but not at any cost.

        • Just_Chris 3 years ago

          My personal opinion is the idea of increasing Tasmanian wind generation capacity beyond the point of self sufficiency is a no brainier. I agree that there is a long way to go before this is the case with self sufficiency being the first target.

          Tasmania is mostly windy at different times to Victoria and South Australia which is a valuable in its own right. It also has fantastic hydro resource that means it has a cheap reliable backup for when the wind isn’t there. This negates the main problem of wind, which is that individual wind farms can drop their output to less than 10% for a few days. If there was no bass link and Tasmania was on its own there would be a careful balancing act to play to make sure that the wind and the hydro were sufficient to meet demand but not too big to be under utilized. The existing bass link means that this is not an issue as any surplus can be exported. Due to the large amount of hydro in the system the export can be timed (as it is now) to meet peak demand which is a very profitable and useful service but 500 MW intermittently is not going to get us to where I think we need to be in Australia which is 100% zero carbon electrical power generation. For that to happen in a cost effective way I believe that Tasmania has to be a big net electricity exporter. A constant 500 MW export would be a great start and would use largely existing infrastructure but it would likely require more power and energy. My assumption wrt to power is that the Tasmanian power generation (minus the gas turbine) is roughly scaled to meet Tasmanian demand only. More wind would give plenty of additional energy and more power at times but there would need to be a further additional power for when their isn’t much wind and demand in Tasmania is high. That could be met by pumped hydro or greater levels of water in storage, which would increase the height difference in the dams and hence provide more power – although I don’t know how much this would add.

          What is unclear (well at least to me) is how much pumped hydro would be needed to maximize current infrastructure plus additional wind? At that point I’d then ask how much pumped hydro and extra wind could you add if there was another bass link(s). My gut feel is that we could get around 2 to 4 GW of renewable energy out of Tasmania fairly cost effectively. I assume that the pumped hydro would be an addition to the existing facilities not a complete new build which makes a big difference in terms of cost.

          I guess what I am suggesting is that Tasmania becomes Australia’s power station rather than its battery which is somewhat different to what has been suggested but I think pumped hydro would be a key enabler for that to happen even if the objective was to simply try and push towards getting to higher export levels via the existing bass link.

          WRT batteries, these are coming down in price and lifetime is going up but that shouldn’t mean we stop and wait. I also believe that pumped hydro is sufficiently different to a battery to make it a valuable addition to the grid regardless of if batteries become cheaper. Batteries are not going to solve all our problems alone we need a diverse energy mix where we maximize the resources we have otherwise we will just keep building or nationalising more gas turbines. Yallon is due to close around 2020 – that is not very far away what
          could be done between now and 2020 that would mean we don’t simply lurch
          from Hazelwood closing to Yallon closing to Liddell closing.

  13. Ron Horgan 3 years ago

    The Tamblyn report, on my inexpert glance, seems to be detailed and thorough.
    He is however, properly unwilling to quantify the value to the community of power supply security, as there is no conventional way to quantify the large cost of a major widespread power failure.
    Inclusion of the benefit of avoiding such costs would change the project return from marginal to highly attractive. The irony is of course that the case could never be proven, as the project would prevent the power failure.
    Investment to ensure power security is essentially an insurance policy of national importance. To judge such investments on the narrow criteria of return on capital is myopic.
    For example the treasured Snowy Mountains Scheme is a poor return on a narrow economic evaluation.
    Tamblyn has passed the question to us, “the community and Government who may place greater weight on these benefits”.
    It’s a political issue. If we are dumb and elect a short sighted government ruled by short term profits we will suffer accordingly.

  14. cscoxk 3 years ago

    Tasmania has an energy storage capacity of 14,000 gigawatt hours of storage or 14,000,000,000 kilowatt hours.
    This can be made available to the rest of Australia for the cost of a second Bass Strait Link that costs close to 1,000,000,000 dollars. That is a cost of about 7 cents per kilowatt hour.
    The current cost of battery storage is at least $200 per kilowatt hour.

    It is a non brainer to put in another Bass Strait Link.

    Economists like Tamblyn do not do these calculations. Their calculations are around the cost of Capital because they believe the money market will deliver the best distribution of value because of their belief in markets.

    Of course this is nonsense and does not pass the pub test. Unfortunately it is so embedded in our thinking that we accept it as being a sensible approach. This is the true Tragedy of the Commons. We have let the price of money (discount rates) to determine how we invest.

  15. humanitarian solar 3 years ago

    Elsewhere in this discussion, it is claimed I’ve analysed things that can’t be discerned online and I’d like to add some further commentary of this nature. This picture of these three “fat cats” is really striking. Looking at these roundish faces, we get the impression that we Australians often go home and kick up our feet with a glass of wine or a beer, then maintain this doesn’t effect our awareness and bearing with our professional work. Just being honest. This is what I think when I see this picture. Good for giggles. This is our leadership. Of the three men though, I think Mal and Steve look rather relaxed whereas Josh looks more concentrated and focused, which is more a style I personally favour. It is a $3billion announcement which I think warrants being focused and concentrated.

  16. John Saint-Smith 3 years ago

    One thing remains clear. Despite Turnbull’s late conversion to the church of pumped hydro, he remains totally in total denial of the Commonwealth Government’s responsibility to plan for a national electricity supply system in a climate change challenged future.

  17. Chris Harries 3 years ago

    Pumped hydro is a great idea in certain situations, especially where there are no natural water inflows. It has far less relevance in places such as Tasmania, having significant water storages that are rarely filled to capacity.

    Under a scenario where Tasmania’s peak load capacity was used to its fullest extent, the hydro-electric system would be essentially shut down in off peak times to replenish those storages. Natural inflows do this replenishment. Water is flowing into the Tasmanian dam system at all times.

    Thus, when in shut down mode, if we can imagine Tasmania’s own power demand being totally fed from Mainland power sources at off peak times (e.g. at night time) imported energy would, in an indirect manner, be fed into the existing dam system, no pumping needed. (It’s worth noting that average power demand within Tasmania remains fairly constant day and night owing to the smelter operations that absorb the bulk of Tasmanian demand.)

    I think its necessary to plainly illustrate this dynamic for the non-tech person so they can understand this interplay. There’s a presumption that power fed into Tasmania has nowhere to go if not pumped into dams.

    Basically, this means that Tasmania can play quite a significant role in providing valuable peaking energy into the NEM without having to invest in costly and inefficient pumped hydro operations, which I think would be the killer economically.

    To put it simply, electrical energy flowing southward across Bass Strait does not need to pump water. It can be more sensibly utilised to directly satisfy Tasmanian demand whilst its dams are being replenished. This is all viable within the scale of current infrastructure.

    If massive amounts of new infrastructure, including dam works, are needed to buffer the national grid in order to deal with renewables’ intermittency then questions have to be asked about the add-on environmental impact that non-hydro renewables are imposing on natural systems. I think a totally gangbusters approach to maximising hydro storage may cause an unnecessary environmental backlash. We need to take this into account and weigh up the cost-benefit of all grid buffering options.

  18. Radbug 3 years ago

    So true, given the pace of technological change, only a Board that has lost its mind would countenance large upfront investments anymore.

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