Highlights from the first day of the Australian Clean Energy Summit. If Clean Energy Council boss Kane Thornton is still looking for a headline, how about how the system stuffed up transmission investment?
Tesla – Megapack
Tesla’s keynote session contained some of the main actual news of the day and that was Tesla’s “Megapack”, covered elsewhere. My understanding is this is available with either a DC or AC interface. By and large Tesla does a great job of packing up batteries and so I expect this product to be popular. No pricing was available.
ESB Chair Kerry Schott raised in passing the notion of community batteries. The best example of this is the “Powerbank” concept from Synergy/Western Power that they presented at the Australian Energy Storage Conference.
This project allows 52 houses to store 8KWh a day for a cost of $365 a year. That’s probably an introductory price but the huge majority of households that signed up were better off. The network owns and operates the asset.
The network subtracts the network benefits of the battery (avoided substation augmentation, management of excess voltage etc) and then sells or rather leases the battery capacity to the retailer. The network does not charge houses for the distribution from the house to the battery and back again.
In theory there is one highly professional installation at street level compared to 52 sets of installation costs.
This should produce a large saving, installation costs for 50 houses probably come to $75-$100 k in total, although given the goldplating nature of distribution costs you do wonder how much of that saving would be seen in practice. It also allows consumers to access the 30% better prices that a Tesla Powerpack has over a Powerwall.
Of course you need to have somewhere on the street to install the battery, you need a network company that can cooperate with a retailer, you need rule makers that have a can-do attitude, and you need a State Govt that’s on board and is prepared to make it happen.
NSW has none of these things. Arguably, Queensland would be the best placed, via its ownership of the network companies to make it happen, and Queensland has a tonne of solar, but don’t hold your breath. No doubt there are more difficulties than there seem but it surely seems worth a better look.
I would argue that the most useful thing COAG could do is hop on a plane and have a meeting in Perth and go and look at the Mandurah scheme. It’s pretty clear that COAG can’t produce any policy so they might as well do some sight seeing.
Matt Kean – Would be better off underpromising and over delivering
Matt Kean, the NSW Minister for Energy and the Environment made a great speech. It was the second time I’d heard the speech or something similar. Matt comes across as sincere and determined. Unfortunately by making promises that he cannot keep right now he also comes across as naive.
Leaving aside the rhetoric of NSW going it alone on the NEG (something certain to face massive internal coalition resistance) , the key “commitment” in the speech was that “NSW would be the best place in the OECD to build a renewable plant and get it connected to the grid”.
Unfortunately although I believe Matt to be since and determined the reality is:
- NSW has the most onerous and difficult grid connection process in the NEM, or so I have been told by a developer; and
- NSW has an absurdly low level of spare transmission capacity. So even if you could wave away the red tape its meaningless.
NSW a banana republic when it comes to electricity planning, and execution.
How low is NSW transmission capacity? Well let’s look at Transgrid’s recently released TAPR [Transmission Annual Planning Report]
The situation is depicted in the map, but a summary is:
This is bad. Not only that, it’s been bad for at least three years and nothing has been done other than talking.
Transgrid has submitted three “contingent” projects which the AER might grant actual “project” status to one of these years. That’s once the AER has finished its “expert” review of the ISP Stage 1 proposals for the NSW-QLD upgrade and the Victoria-NSW upgrade. These proposals have been in at the AER for months, and so far as I know nothing has emerged.
Insufficient leadership is the key problem, too much governance, no accountability
The main problem with the electricity system in the NEM is too much Governance and not enough executive management and accountability. I pointed this out when the Finkel Report was released.
Here, I just point out that no one is likely to accept any responsibility for the massive failure of planning that would and should have ensured there was enough transmission to keep up with the rapid growth of renewable energy. Despite plenty of examples from overseas about how to do it, the results in the NEM speak for themselves.
Falling MLFs another outcome of poor transmission planning
In an afternoon session discussing renewables financing, Andrew Smith, Global Head of Renewable financing at NAB pointed out that jurisdictions like ERCOT in Texas and the UK largely don’t have individual generator MLFs.
In Texas the line losses are just averaged out and everyone gets an MLF of 1. Economic purists in Australia, no doubt including the AEMC, would no doubt need a sedative if such as system were introduced in the NEM but it’s worked great in Texas.
We’ve written here about Texas developed is transmission on at least 2-3 occasions – and a podcast here – so it’s not worth going over again. It’s quite clear regulators in Australia want a perfect system even if means consumers pay more.
Why will they pay more? Because uncertainty over MLF’s means a higher cost of capital. And a higher cost of capital means a higher electricity price. This was pointed out by Karen Gould from Palisade.
Let’s remember the simple points about MLFs. (1) there are line losses that have to be recovered from consumers; (2) if too much generation is connected to transmission with not enough capacity then the MLF to the individual generators will fall and so will the revenue they receive.
Nothing can be done about (1) but problem (2) can be fixed by building more transmission. You can argue about gold plating transmission but it must be obvious that identifying new renewable energy zones and building good transmission to them is just sensible.
Two pieces are back in fashion….. Cypress 5.3 MW onshore turbines
The first session after lunch was international developments. The main point I took from the BNEF session was that renewable investment in $ terms is at a plateau and is way short of the level needed to get to a 1.5°C global warming target. I doubt if anyone other than the most blind optimist would bet much on keeping warming to 1.5°C/
IEEFA’s Tim Buckley noted the cost advantage of renewables over coal in India and that India must build more generation to go with its 7% GDP growth. India has a chance to avoid the incredibly huge error China has made in building 1 TW of just about loss making coal generation capacity, but despite the economics I wouldn’t bet on India doing better than China given its past history.
However, arguably the most interesting point made in the International Developments session was GE’s two piece “Cypress” wind turbine blades.
These should simply development of difficult wind sites and make more sites viable. The Cypress turbines are up to 5.3 MW, big for onshore. The method of joining the turbine blades appears to be a big secret as although there are photos of the Cypress system I couldn’t find a photo of the blade join.
As far as I can see the impact on performance wasn’t discussed. This brings up the broader point of conference format…..
Format – more panels than on the average solar farm
This conference was largely composed of panels where a moderator asked questions of about five panelists.
Unfortunately after a few hours this gets a bit dull. The best presentation in terms of style and marketing was easily that of Alan Finkel which resembled a well structured TED talk. Lots of easy to follow animated slides with simple messages. I may not be as big a fan of Hydrogen as Mr Finkel but I greatly enjoyed his presentation.
Panels have a place but in my opinion need to be mixed with presentations. Better to let presenters use a few slides and talk about what they know in a more structured fashion.
As good as many of the moderators were , and they were uniformly excellent in the end, it’s just another disconnect between the audience and the speaker. Equally the increasingly ubiquitous Slido app raised its, to me, ugly head. Slido is great for audience polls, but otherwise treats the audience as if they are not even in the room.
The conference was well attended but perhaps had more of a buzz last year and the year before. No federal politicians and competition with another conference probably got in the way.
David Leitch is a regular contributor to Renew Economy. He is principal at ITK, specialising in analysis of electricity, gas and decarbonisation drawn from 33 years experience in stockbroking research & analysis for UBS, JPMorgan and predecessor firms.