The Tesla big battery
As we look back over the most-read stories on 2018, one subject stands out – the Tesla big battery in South Australia. It was mocked by politicians and conservatives, compared to the Big Banana and the Kardashians – and ridiculed for being able to keep the state’s lights on for a matter of minutes if running by itself.
Apart from being plain dumb, such comments ignored the benefits the battery could and did bring to the grid. On numerous occasions it intervened in the market and on several occasions can be credited with ensuring that everyone kept their lights on.
More than that, its speed, accuracy and versatility has allowed the market operator and other participants to see a future grid that is smarter, faster, cheaper, cleaner and more reliable than what we have now. And it has focused interest on the possibility of other batteries, and other forms of storage, including pumped hydro and hydrogen.
Cheap wind and solar, even with firming
This was the year that even Australia’s big utilities were keen to promote the fact that new wind and solar farms are not just cheaper than new coal or gas generators, they are also cheaper than most existing plant, even with “firming”.
That’s the assessment of the government’s own energy utility, Snowy Hydro, and a bunch of other big utilities, and leading analysts such as BloombergNEF.
And then it was confirmed (today) by a benchmark report from CSIRO and AEMO, which found that even after slapping on the costs of 2 hours of battery storage, and then six hours of pumped hydro storage, it was clear that wind and solar still came out cheaper than new coal generation.
Slowly, the idea of a new electricity system is starting to take shape. This will not be the old base-load and peaking paradigm, but “base-cost” renewables topped and filled in with dispatchable and flexible capacity, which could also include batteries, other forms of storage (pumped hydro, solar thermal and hydrogen) and “smart” technologies like demand response.
Gupta and the “solarised” manufacturing industry
The arrival of cheap wind and solar has already dawned on the corporate sector, which embraced renewables in a way never seen before in Australia, including the likes of Bluescope and brewer CUB, which will soon be sourcing the equivalent of 100 per cent of its electricity needs from solar.
The biggest embrace came from UK billionaire Sanjeev Gupta, who promised to revive the fortunes of the old steel city of Whyalla by focusing on large scale solar and battery and pumped hydro storage.
Gupta’s plans do not stop there. He plans to build 1GW of solar and storage in South Australia, and has talked of a total of 10GW to help “solarise” the Australian economy by using large scale solar to deliver cheap energy and bring manufacturing back to Australia.
CWP, Vestas and Macquarie are looking at similar plans in the Pilbara, only this time it is for 11GW of wind and solar for local manufacturing and industry, and to export to Asia, either via a sub-sea cable or through a transportable fuel such as ammonia or hydrogen.
Idiots and ideology, fair dinkum power and the emergence of the “sensible” centre
it’s been a big year for politics. The Coalition – driven by what former PM Malcolm Turnbull calls “idiots and ideologues” entered a scary third phase of energy politics.
Tony Abbott’s destructive regime was at least partly restricted by its concern of what the moderates thought, Turnbull’s moderates were hamstrung by their efforts to appease the Abbott malcontents, but Morrison’s men don’t give a toss, not for facts, engineering, economics, and least of all the environment.
Its right wing populism was best characterised by Morrison’s embrace of the phrase “fair dinkum power”, a term he used to promote the burning of coal like the lump of coal he had waved in parliament.
In an extraordinary intervention, software billionaire Mike Cannon-Brookes launched his own campaign, appropriated the term to promote renewables and dispatchable power, and highlighted the hunger the community has for an independent champion for what they know to be right.
Even more powerfully, voters swung behind the “sensible centre”, electing strong climate-focused independents in place of long standing consertavties, and rolled the anti-renewable Victorian Liberals in the recent state election.
Accelerating shift behind the meter
Nearly everyone has expressed surprised at the scale of investment in rooftop solar and “behind the meter” generation in the past year, which has jumped around 50 per cent to a record level well above 1.5GW.
That surprise is surprising in itself, given the high costs of electricity, only marginal falls promised by various government interventions and a cap on network costs, and the falling cost of solar and the hyper competitive rooftop market.
But this points to the future. Most studies now recognise that rooftop solar will account for nearly 50 per cent of capacity – as early as 2040, and a significant share of generation. Even better, the industry is now figuring the right models to deliver this technology to those who can’t get it – low income housing, rentals and apartment dwellers.
Think of this as the shift to a decentralised grid, and even energy democratisation, that is starting to take shape, enabled by battery storage, smart controls and analytics. Expect to hear a lot more about the terms demand response, virtual power plants, peer-to-peer trading, solar gardens, blockchain, and micro-grids and mini grids.
Arrival of EVs, and talk of vehicle to grid
Australia’s uptake of electric vehicles still trails the world, accounting for just 0.2 per cent of sales, compared to 50 per cent in countries like Norway. But this is starting to change, with the release late in the year of the Hyundai Ioniq (first long range EV below $A50,000), and the Jaguar i-Pace (best response to date to Tesla’s Model 3 and X).
This is just the start, and EVs will likely be a big thing in 2019, with the arrival of a host of new models – from Hyunda’s Kona, to Tesla’s Model 3, and offerings from Nissan, Mini, Porsche, Audi, VW and Kia. Consumers are clearly hungry for it, with more than 50 per cent thinking their next car purchase will be electric, despite the still elevated prices.
More importantly for the grid, will be the arrival of vehicle-to-grid technologies, first with Nissan’s second generation Leaf, adding yet another dimension to the distributed energy model. It seems that auto manufacturers are now less worried about the impacts of such use on battery lifespan. We have only begun to think about the possibilities and implications of this technology. Watch this space.
