Should NSW coal be replaced by South Australia wind and solar?

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ElectraNet proposes new link from S.A. that it says will unlock more low-cost renewable energy sources, reduce reliance on expensive gas, and help fill the gap caused by the retirement of more coal generators in NSW.

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Purple wins the day.

Expect in the next few days, weeks, months and even years to be bombarded by reports calling for new transmission lines to be built across Australia’s main grid.

Proposals are going to come from everywhere. To connect the giant Snowy 2.0 pumped hydro scheme, to connect Tasmania’s “battery of the nation” project to the mainland, to create renewable energy zones in Queensland, NSW, and Western Victoria, and to offer an extra link to South Australia.

The premise is simple. More and more electricity will be supplied from local sources, but even when half of it comes from a “decentralised grid”, more links will be necessary to deal with the diversity of supply.

In the next week or so, AEMO is due to release a first draft of its Integrated System Plan – its assessment of what is needed to ensure that Australia is able to properly deal with the inevitable transition to clean energy, and how it manages a future grid reliant on wind, solar, hydro and storage.

The ISP will not be constrained by an attachment to coal, nor a blanking out of the future that has hindered federal policy making. It will assess what is needed both under Coalition and Labor policies, and what is required for a 70 per cent and a 90 per cent cut in emissions by 2050.

That report was preceded late last week by the transmission proposal that is most advanced – and apparently considered by AEMO to be one of the most important – providing another link from South Australia to the rest of the main grid.

A whole bunch of different scenarios were considered by South Australia transmission company ElectraNet – no new link at all and a reliance on local storage and generation; a third link to Victoria; a $1.8 billion high-voltage link to Queensland; and multiple options for a new link to NSW.

In the end, ElectraNet has settled on a favourite – a $1.5 billion HVAC transmission line, rated at 330kV with 800MW of capacity, connecting South Australia’s mid-north to Wagga Wagga in NSW. (It’s the purple line in the top graph).

The reasons cited in its Project Assessment Draft Report, were that:

The new link would provide greater opportunity for South Australia to unlock even more of its low-cost renewable energy sources, it would reduce the reliance on expensive gas in that state, and would help fill the gap caused by the retirement of more coal generators in NSW.

Most of the new links studied delivered “negative” or only marginal market benefits, and the economic case for the favoured proposal is not exactly mind-blowing.

ElectraNet puts the economic benefits of the $1.5 billion investment at $2 billion over 21 years, which is just under $50 million a year. Households looking at battery storage would get a better return.

Modelling by ACIL Allen for the proposal suggests that the reduction in wholesale costs would be $100 million a year, which translates to just $30 a year in reduced bills to South Australian households, and $20 a year in reduced bills to households in NSW.

This is going to be one of the tests of these network investment plans. Are they really necessary? Are there local alternatives, and are the current regulatory investment hurdles – known as RIT-T – flexible enough to recognise broader benefits and costs?

ElectraNet did look at the “non-network” alternative of relying on local resources – solar thermal and pumped hydro in Port Augusta, battery storage at Tailem Bend and elsewhere, a 400MW “virtual power plant” and synchronous condensers.

It was not its preferred option – it is a transmission company, after all – but we’d like to see the detailed modelling before deciding whether to agree with them.

The idea of the new transmission line has the support of the new South Australia Liberal government which, ironically, killed the idea of a new link when it was last in government 16 years ago, and was trying to maximise the price of the state-owned energy assets it was selling.

Still, this is what ElectraNet said about its favoured proposal to Wagga Wagga NSW:

The new inter-connector would be ready by 2022 to 2024, which is just after the likely closure of Liddell, but before the anticipated closure of other coal generators that could leave NSW with just one coal generator – Mt Piper – by 2035, if not earlier.

It would deliver “immediate” market benefits, but these are likely to be for South Australia, rather than NSW.

In the first instance, access to lower cost generation in NSW will deliver benefits to South Australia because it is cheaper than its expensive gas generators.

Over the longer term, and as NSW sees coal exits, the proposition is that this unlocks the ability for more wind and solar to be sourced in South Australia to deliver “low cost” renewables to the rest of the grid.

In the medium to longer term, new interconnection provides diverse low-cost renewable generation sources to New South Wales,” it says, noting this would be a lot cheaper than gas. (It doesn’t seem to contemplate whether this is cheaper than NSW-based wind and solar).

“In the longer term, an enhanced ability to export low-cost power from South Australia, including renewables, can also provide market benefits by enabling supply in other jurisdictions to be met at a lower overall cost, as existing coal-fired plant retires.

“This is particularly the case for options involving new interconnection to New South Wales, which is forecast by AEMO to experience the greatest retirement of coal plant in the period from 2030, and which otherwise would rely on higher cost sources of generation to fill the resulting gap in supply.”

Unsurprisingly, the gas industry doesn’t like the idea. Engie, which owns Pelican Point, Delta Energy, SEA Gas and their lobby group, the Energy Supply Council, all said the new interconnector would reduce the viability of gas generators in the state, and shorten their life span.

AGL’s ageing Torrens B gas units are considered likely the first to go.

On this point, ElectraNet also says it disagrees with AEMO’s gas price assumptions, including in the ISP, which it apparently has seen, saying its low gas price assumptions – one of the main scenarios used in the planning – are wrong.

“We do not consider such a low price to be a plausible outcome,” ElectraNet says.

The wind and solar and storage industries may also not like it. The report seems to suggest that new generation investment will be reduced in the short term (see table above) even if over the longer term it encourages more wind energy and would result in less curtailment.

ElectraNet insists, however, that a new link is necessary because the continued growth in rooftop PV installations is leading to the minimum grid demand approaching zero in the mid-2020s, and without the new link “future rooftop PV installations will have to be controllable in order to disconnect them when operating as an island.”

ElectraNet says the new link will facilitate the transition to a lower carbon emissions future and the adoption of new technologies, “through improving access to high quality renewable resources across regions,” and will enhance security of electricity supply, including management of inertia, frequency response and system strength in South Australia.

“New interconnection also provides benefits through enabling greater integration of renewables in the NEM,” it says, and will avoid “intra-regional transmission costs that AEMO estimates in the ISP would otherwise be required to unlock additional renewable generation resources in the Murray River and Riverland REZs.”

That last paragraph sums up some of the difficulties and challenges as decisions are made over future investments. Apart from the ideological blockade at political levels, self interest reigns supreme, network providers are lined up, not just against gas generators, but also against each other’s proposals.

Will there be any adults in the house, to help the poor consumer?

Note: Capacity proposed line corrected to 800MW instead of 8000MW as originally published. 

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47 Comments
  1. Shilo 3 months ago

    Long way to step RE energy up to send it long distances, out of a battery at the wrong time day on a very hot day could be a high loss of energy.

  2. RobertO 3 months ago

    Hi All, I like the idea of a HVDC connection but to Dubbo and no where as big as the 8000 MW. My thinking is that it a backup for local power generation for local use with some local storage, so my thinking is about 1000 MW, but expandeable to larger capacity if needed. From Dubbo to Liddell yes it might be higher at say 2000MW.

    • AndyJ 3 months ago

      @disqus_Em2D0chldo:disqus

      Appears to be a small typo in the above article:

      In the end, ElectraNet has settled on a favourite – a $1.5 billion HVAC transmission line, rated at 330kV with **800MW** of capacity, connecting South Australia’s mid-north to Wagga Wagga in NSW

      Refer to Table 4 – Option C.3 and C.3i in the linked ElectraNet report.

      • RobertO 3 months ago

        Hi AndyJ I hope so as 8000 MW is able to be built but better costing on 800 MW, and also why not higher Voltages say 500 kV
        Thanks AndyJ

        • AndyJ 3 months ago

          Refer page 53 – new interconenction to Victoria:

          “new HVAC lines of capacity greater than 275 kV (ie, 330 kV or 500 kV) would not deliver additional market benefits commensurate with their additional costs – in particular, the increase of voltage levels to 500 kV would come at a much higher cost, and the assessment shows that the higher capacity would not be able to be utilised (the inclusion of a 500 kV option to New South Wales in this RIT-T assessment also demonstrates this)”

          Seems to be an economic driven decision rather than a technical.

  3. Peter F 3 months ago

    So lets say for the sake of the argument new wind in NSW is 10% more expensive than new wind in SA. The losses on a long transmission line would more than offset any saving in power costs so no cost advantage but one more long distance transmission risk.
    Local storage in SA in batteries would have fewer losses than a HV line all the way to the Sydney basin and for $1.5 bn SA could probably install 700 MW, 2,200 MWhr of batteries. Combined with existing batteries, the solar thermal plant, CC gas and AGL’s new gas plant that would guarantee SA could meet peak demand with virtually no OC gas and only a few hundred MW of imports across the existing links to Victoria.

    If the announced projects from Onesteel, Lyon and DP energy go ahead as well as the current projects SA will add about 1,800 MW of tracking solar and 600 MW of wind over 4 years from 2018 to 2021 inclusive. i.e. before the project could start delivering. That would make SA almost net zero so it doesn’t need NSW power. The question then is will NSW coal power+ transmission costs be sometimes cheaper than SA wind+ storage costs.

    It probably will be but whether it is anywhere near often enough to justify a $1.5 bn transmission line is extremely doubtful

    • RobertO 3 months ago

      Hi Peter F, And your security of supply comes where in the equation. There will be times when either end will need supply and if this provides it then it may be part of the answer. Also this would help retire coal sooner in NSW, given that there is some capacity in parts of NSW that we can grow RE.
      To me retirement of coal has to be our only target. We will pay for the change in Agriculture as the Temperature rises, in higher food costs, we will pay for any rise in sea levels (parts of Sydney already suffer under extreme high tides). If our sea food chain collapses then we will need to move all the people on to Agriculture (which would already be under stress due to Temperature rises).
      The only wrong answer to RE is we should do nothing.

      If it becomes part of a new backbone system to strengthen the overall system then it may form part of the solution (yes I know that I usually go on about profit driving systems but how do we as a nation value security of supply?). Do we need to discuss a reliability of generation at 99.997% or will we as a nation accept 99%. I do not know what the correct answer is, but if it retires coal then I am happy to pay for it, in higher electrical prices.

      • Mike Westerman 3 months ago

        Robert surely security supply comes from generation being close to load, not on the other side of the state. $1.5B buys you >1GW of PHES with 6-10h storage, enough to more or less guarantee security of supply, no curtailment and a good export earner for SA. Meanwhile NSW gets on with several GW of wind and solar, knowing it has 4GW of hydro already. That will take out the coal stations retiring.

        • RobertO 3 months ago

          Hi Mike Westerman, As a backup supply for local generation, for local demand and for local storage (this is the reliability factor) I am happy to see this (long distance supply increases your security of supply and backup systems always cost more money). As David Leitch has stated the less Wind, the less Solar, the less anything in the network, the cheaper electrical power will be, and then we need to ask the question “What level of Reliability?” and “What level of Security?” do we want in the system.
          As a backup system it will be used to maximise profits so if there is that ability to move energy at a profit it will.
          At this time PHES (and some batteries) needs to be built, in the supply chain somewhere between generation and demand sites.

      • Peter F 3 months ago

        More or less what Mike said but in slightly more detail.
        1. I did not mean to suggest that there would be no pumped hydro in SA, more that even the most expensive option for local storage, batteries, would be cheaper than the link
        2. If SA can be self sufficient with a little help from Victoria across existing links then the issue is NSW. NSW could import renewable power from SA or build its own plus a bit more storage.
        An 800 MW link from SA cannot be guaranteed to supply more than about 150 MW when NSW needs it. The link will supply power at other times which will enable NSW to reduce annual coal/gas production and save hydro but if SA peak demand coincides with NSW peak demand then about 150-200 MW is all NSW will get so to get energy security NSW needs to invest in its own despatchable resources, upgrading existing hydro, new small hydro on existing dams, pumped hydro, waste to energy, demand response and some batteries and perhaps renewably fuelled gas plants
        Germany generates about 160 GWh from wind and solar in 350,000 sq km. The wind and solar potential in NSW is about double that of Germany. The grid accessible area of NSW is about 500,000 square km. New solar panels are approximately double the power of the average German panel. The average German wind turbine produces about 4.5 GWh. New wind turbines such as those at Snowtown will produce about 12-20 GWh. Thus with the same density of wind and solar panels as Germany NSW could produce about 180 TWh from solar and 500 from wind.
        If all of NSWs transport was electrified and all domestic water and space heating cooking etc was electrified NSW would still only use about 110-120 TWh per year, so the problem is not generation it is firming.
        Power to heat/ice, smart vehicle charging, rare V2G support from vehicles, customer owned batteries etc will provide a large share of that by reducing peak demand from perhaps 13 GW down to 9-11 GW. In addition to hydro and imports from NSW/Victoria NSW probably needs another 3 GW of despatchable power to eliminate coal entirely
        The most reliable grid in the world is Denmark and their Conservative Government is aiming for 100% renewable electricity by 2030, so there doesn’t seem to be much need to reduce reliability although reducing 99.997% to 99.99% would probably save a fair bit of money more than offsetting the costs of installing a few extra batteries in safety critical customers

        • RobertO 3 months ago

          Hi Peter F, I agree we need more storage (built in Australia is my preference so at this time PHES is better that batteries but they do different things to the system and they currently have different life expectancy).
          I regard the Interconnects as a better way to provide backup to the local supply, local demand and local storage and yes it may be only able to supply 150 MW when we need it but it will be use to supply a profit (it will run whenever it’s needed).

          Anything that employs Australians is better that buying it from overseas. Australia has the ability to build interconnects but there is currently little or no manufacturing (Adelaide is about to start?) of batteries in this country.
          Building a new backbone system and new RE system could employe about 12,000 people (2,000 for Backbone and 10,000 for RE) or more for 5 to 10 years (your are much better at these numbers than I am, and it much better not to export jobs which is what our current Fed Gov wants to do).

  4. Ian 3 months ago

    These are difficult decisions. On the one hand wide geographical connections can spread the intermittency risk regarding wind generation but on the other these sorts of transmission lines are very expensive and do not really carry enough power from one region to another.

    The purple line does have the advantage of passing through a number of potential renewables generating zones. Which would be very useful. Any high voltage transmission line that does not support a number of generating facilities or load centres along the way is probably not worth while.

    • hydrophilia 3 months ago

      I disagree on the power not being high enough: I felt relief at seeing the max 800MW rating. My concern was that this might carry so much power that a sudden loss would be catastrophic to the grid. Instead, this will be like a really reliable single power plant, but one that can carry away 800MW or bring 800MW as needs be. Seems pretty reasonable…. but it is the most cost effective and reliable way to provide services: as the article pointed out, it was not compared to some of our favorite options.
      I’d also like to see what option maximizes value for all stakeholders, preferring that everyone gets as much value from their investments and pays as little for their power as possible (perhaps including a social cost of carbon at $100?).

      • Ian 3 months ago

        Well here’s the thing, the premise behind having robust interconnectors between states in a 100% renewables system is that electricity can be shared between the two or more areas when the wind and solar resource is lacking in one area it may be in excess in the other. South Australia’s maximum demand is 3GW its minimum 800MW, it’s solar about 800MW and it’s wind 1.7GW. It has another 3GW of wind in the pipeline and another 1.7GW of solar. These are all big figures. Say all these generators are developed and say they all happen to operate at the same time that’s 7.2GW of power trying to service maybe 3GW of demand . At another time we might have the dreaded cloudy windless days and you have 3GW of demand and close to zero generating power. What is the use of an 800MW interconnector in these circumstances? Either you want an interconnector to provide standby assurance capability or you don’t, you can’t go for something half hearted .

        http://www.aemo.com.au/-/media/Files/Electricity/NEM/Planning_and_Forecasting/SA_Advisory/2017/South-Australian-Electricity-Report-2017.pdf

        The justification to build such an interconnector would need to be something else besides providing a reliable supply of electricity. It would be about connecting different renewable resource areas along the way to the major load markets and about trading electricity between geographical areas.

        Check out these examples of long distance high voltage HVDC lines:
        https://www.power-technology.com/features/featurethe-worlds-longest-power-transmission-lines-4167964/

        These are not liddle-biddy play-things as proposed, these are decent sized wires.

  5. Tom 3 months ago

    Why is everyone crapping on this idea? It’s great, this is good news for renewables!
    Lasts 5+ times longer than batteries, half the losses, twice the peaks available to arbitrage.

    • Peter F 3 months ago

      Because it is more expensive and in fact less reliable than distributed storage near the load. It doesn’t create any more energy it uses some

      • CU 3 months ago

        Do distributed storage create eengy?

        • Peter F 3 months ago

          No, sorry I was a bit glib but storage near the load even if there is no net energy benefit contributes to reliability through diversity and reduces losses

          • Greg Hudson 3 months ago

            Generation near the load is needed before the storage. Imagine small to medium solar arrays at every country town, each with a small(ish) battery. Everyone produces and stores their own, and no transmission line is necessary.

          • RobertO 3 months ago

            Hi Greg Hudson This is the way of the future except that both reliability and security of supply become the issue. So a cloud covers your panels and you use all in your battery, then you have no power left, so local domestic lines mean you can share supplies (call this reliability of service), but if the cloud cover is larger (part of the state or all of the state), and or slower moving then the interconnects allow power to connect to house (call this security of service).
            To build a system to go off grid you will often need much larger battery to store energy for about 3 to 5 days and possibly a small generator to cover the extended loss of solar generation.
            Batteries for every house and batteries for every vehicle is also sending jobs offshore (about 30 to 40 million batteries).

          • Jonathan Prendergast 3 months ago

            I don’t think Greg is suggesting they go off grid. They become more self reliant, and only need thinner distribution connections with other towns and broader grid for support when needed

          • Shilo 3 months ago

            May as well all be DC. Edison will be then many years before his time.
            AC won round one, but DC wins the war.

      • Shilo 3 months ago

        What is the % uses converting wind power to a long distance line and sending it say 2000km?
        What is it for solar?
        And then what is it to get it into a battery, then out of a battery and then send it 2000km from the battery?.
        Lets also not forget that some of the energy being sent that long distance may end up again in a battery again to then be traded with, which will be more losses.
        Which is all not a problem if there is heaps of cheap energy as there can be with RE.

        • Ren Stimpy 3 months ago

          If it’s going to be curtailed anyway on windy days the excess might as well be transmitted to NSW (yes with the small % of transmission losses). The SA Lib govt promised this interconnector with NSW.

          • Shilo 3 months ago

            Hello Ren, ok so what is the small loss to step wind up to send 2000km? Do you know?
            Also Solar?.
            Base load coal plants have more losses in the step down process, as far as I can work out, because they are sending out stepped up to start with.
            So they have losses for distance then stepping down.
            Wind and solar will have a extra step, that being to be stepped up and then the same losses being sent a distance and same losses stepping down. So to send Wind and Solar the losses have to be a bit more?

          • Ren Stimpy 3 months ago

            That’s a good question for Steven Marshall whose election promise was to build a NSW interconnector. “Obviously you’ve miscalculated”…

          • Shilo 3 months ago

            nice brings back old memorys, thank u

          • Alastair Leith 3 months ago

            Checkout the reboot on Netflix, quite the reboot!

          • Ren Stimpy 3 months ago

            Stevo M. is to me the dead spit of (the original) Dr Smith, and before Jay W. was moved on by the electoral redistribution, Steven Marshall was in electoral pain.

          • Calamity_Jean 2 months ago

            I could never watch the original Lost In Space because I hated the character of Dr. Smith. He should have been ejected from the airlock minus spacesuit at the earliest opportunity.

          • Rod 3 months ago

            Seconded. I was dreading a remake but this is one of those rare occasions where the modern version is actually OK.
            Not as schmaltzy as the original which has dated really badly.

      • Tom 3 months ago

        This isn’t mutually exclusive to the other options, if anything it’s complementary.
        Local reliability vs. inter-regional reliability
        Short duration vs. long duration
        Asynchronous support vs. synchronous support

    • Christian Morales 3 months ago

      How many Ampere per Hour of each battery?

  6. Chris Fraser 3 months ago

    I don’t get the investment test, but it appears to me that more load is electrifiable than gas-powerable. For example, homes, businesses, cars, electric highways – we could go on.We need a way to spread the energy to all these loads The investment will be helpful if say it is windy in SA and not on the east coast.

  7. Just_Chris 3 months ago

    My personal opinion is that they should just go ahead and do this. $1.5-2 billion is a lot of money but it will make a massive difference. When you compare it to $50 billion for submarines or even $2-4 billion for a new power station it is a bit of a no brainer. There is almost an hours difference between the sunrise/sundown in Western SA and eastern NSW. Choosing between QLD and NSW is interesting though, QLD is clearly going to have a massive over supply of electrcity as it pushes to its 50% RE target and NSW is going to be short.

  8. Aluap 3 months ago

    This continues 20th century thinking. It should be extremely clear that Australia is very vulnerable to damaged power transmission lines. A couple of bombs and a few malcontents, or a vehicle crash can bring SA industry to its knees. Instead the government should be developing a network of transmission lines that can duplicate tasks should one or two fail. Remember what happened when an underwater cable was munched upon by a shark, or when a cyclone brought down some lines in SA. It’s all well and good to spend 90 billion dollars on maritime defence in SA, but why not on energy transmission security in SA. Not sexy enough?

  9. Robert Westinghouse 3 months ago

    If Australia is so big and the links are so expensive….what about regional power generation – i.e. more PV….a simple solution that the government will stop in it tracks as it will reduce the profits of its bed partners BIG Power.

  10. phred01 3 months ago

    The Captain ain’t happy all that dinosaur poop going to waste

  11. rob 3 months ago

    Stuff NSW the water thieves that have to continually rely on other States for their power! In a couple of years S.A. will be totally self reliant….We should simply leave the NEM and leave NSW to stew in it own bullshit! Kind regards S.A. In the mean time we will steal all you Tech and Heavy Industry.

    • Ren Stimpy 3 months ago

      SA will soon have excesses of renewable power on occasions that you will want to SELL to other states, while still having some shortfalls of power on occasions in which you will have to buy power from interstate. More transmission interconnectors will enable SA to reach a steady cost equilibrium.

  12. AndyJ 3 months ago

    Whilst not ignoring the likely numerous technical and economic challenges, I was surprised that the ElectraNet report did not give even high level consideration to an interconnector with Tasmania. On the surface, there appears to be strong alignment between the objectives of ElectraNet and Hydro Tasmania’s ‘Battery of the Nation’ project. Such an interconnector would improve the energy security of both connected states, rather than just SA in ElectraNet’s preferred system.

    • Ian 3 months ago

      Usually high tension transmission lines carry electricity from a large set of generators to an equally large load. In a distributed renewables world we may be trying something different: gathering the excess from thousands of different sized generators and loads and sending this to another centre to distribute the energy to thousands of disparate loads, similar to a highway between two cities. This is a very interesting development. Shilo’s comment elsewhere in this section capture this idea.

  13. juxx0r 3 months ago

    Whats with the stupid questions in the title?

    Why prove your stupidity upfront?

    Anyone with half an idea about distributed generation knows that it should be distributed. i.e. not all located in SA.

  14. Alastair Leith 3 months ago

    Another screen grab we can’t read Giles!

  15. BushAxe 3 months ago

    RiT’s are too constricted to consumer benefits only. This line has a capacity of @1800MW which means the remaining 1000MW is for RE to be built around Buronga and Darlington Point. The line will also improve system strength in the region as well including NW Victoria through the Buronga-Red Cliffs 220kV line as synchronous condensers are included in the costing. Obviously everyone has vested interests to push their business cases so the ISP has to balance whether transmission losses of 5-10% outweigh storage losses of 15-20%. Adequately sized interconnection is a must in the age of distributed RE. Interesting times.

  16. Alastair Leith 3 months ago

    “Proposals are going to come from everywhere. To connect the giant Snowy 2.0 pumped hydro scheme, to connect Tasmania’s “battery of the nation” project to the mainland, to create renewable energy zones in Queensland, NSW, and Western Victoria, and to offer an extra link to South Australia.”

    Where’s the HVDC link bw SWIS and NEM 😭

  17. Aluap 2 months ago

    Why has no one mentioned nature security? A disgruntled biker or even a foreign agent could take out Australia single handedly by cutting the power transmission lines as presently arranged. I don’t understand all this talk on national security with the transmission lines left as they are. There needs to be multiple failsafe networks.

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