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The changing shape of wind and solar in Australia’s grid

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Australia is currently experiencing an unprecedented boom in solar and wind energy investments, both in terms of capacity and dollars. It will likely take the country to a 33 per cent share of renewables as early as 2020.

But there is another fascinating development taking place – as more and more wind and solar is added to the grid, the shape of their output is also changing, and in a way that should give confidence about a clean energy future based around a high level of variable renewable energy sources.

Two significant trends that are emerging: the first is the offering of “firming contracts” to those looking to source a significant amount of their supply from wind and solar, but wary of wholesale price risks when the sun don’t shine and the wind don’t blow.

The second is the development of projects that do much the same thing but this time by the physical combination of  wind, solar and some form of storage at the one site, or nearby. Proposals and projects are now emerging across the country.

One of the first “solar firming” products came from TFS Green, who helped put together a package for ERM Power that takes the risk out of contracting with a solar farm.

This is a product that simply seeks to manage the risk from variable solar output by providing price swaps. It allows a solar plant to provide a customer with a firm price for a flat load.

Around the same time, AGL launched a wind firming contract (see graph above), while more recently Macquarie was involved in what is called a “proxy revenue swap” for a wind farm in Victoria that will provide “baseload” green power for packaging giant Orora.

These proxy revenue swaps also emerged in two deals done for another two solar farms in Victoria and Queensland. The term sounds complicated and non doubt is, but is essentially a hedging contract.

All of these developments, note analysts at Morgan Stanley, are potentially disruptive because it enables corporates to structure electricity contracts the provide firm power, and match their usage, without having to resort to the big retailers.

That allows innovative renewable energy developers like Simec Zen Energy to contract solar farms, match them with large energy users like miners and manufacturers, and provide firm supply.

Simec Zen has started to do this with 5 of the biggest energy users in South Australia, will extend it to its Whyalla steelworks and other major customers once it builds more solar, battery storage and a pumped hydro facility, and will then take it national with plans for up to 10GW of solar.

CWP, which is building the Sapphire wind farm in northern NSW, and is looking to add both large-scale solar and battery storage nearby, is also considering a move into retailing for exactly the same reason, head of development Andrew Dickson told the Large Scale Solar and Storage conference last week.

And this is where the crossover between contracting and physical delivery gets really interesting.

“We are moving towards our own retail capability in the future,” Dickson says. “We can aggregate and shape products to meet growing needs of industrial users in the NEM, and we can do so at very competitive prices.”

Dickson also agrees with Morgan Stanley’s assessment – shared by the likes of Ausgrid CEO Richard Gross – that the days of a few dominant – are numbered. “That’s not the future,” Dickson says.

Roger Price, the CEO of Windlab, also talks of fully dispatchable renewables – or, to borrow the parlance of the coal lobby, “baseload renewables”, with the Kennedy Energy Park inland from Townsville.

The first stage of this project is being built now, combining 43MW of wind, 15MW of solar, and 4MWh of Tesla battery storage. “Big Kennedy” will likely be 10 times the size, or 20 times the size, depending on local appetite.

“It’s the perfect match,” Price says. “You get solar in middle of the day, the wind resource picks up as the sun starts to set, blows through night, then drops after the solar” emerges for the morning peak.

Tilt Renewables is another looking to combine wind and solar, as well as battery storage, based around its already completed Snowtown wind complex in South Australia.

This graph above was given in a recent presentation that shows the average output for wind and solar – combining the two, and then backed up with some form of storage, enables them to provide a firm contract to customers, without getting pasted by gas generators pushing the wholesale price up to the market cap.

And, of course, there is the Kidston project in North Queensland, not farm from Kennedy, where Genex Power is looking to combine 270MW solar and 250MW of pumped hydro, with maybe 6-8 hours storage, and then add 150MW wind power for good measure.

The output will look like this graph above.

Like the other wind-solar combinations, wind generation is inversely correlated with the solar resources, the pumped hydro compensated for the variability of wind and solar, and Genex executive director Simon Kidston describes it as the world’s “first baseload renewable energy project.”

Except, these are not really “baseload” plants in the true sense, or in what the coal boosters imagine they are, because they don’t need to be.

But they are fully dispatchable, which is what is important in a modern grid. “It is dispatch able renewable energy on demand 24/7,” says Kidston. That includes overnight, and in periods of peak demand. The clean energy transition marches on.

   

Pocket
  • john

    Another one bites the dust
    Another one bites the dust
    and another one down and another one down
    another one bites the dust
    Apologizes to the song writer.

    Every week another myth is broken open and shown to be dismally misinformed.
    With sufficient Wind Solar Battery and PHES then RE can supply power.
    Add Solar Energy Storage to the mix and we have another that can be used to ensure in the worst outcome situation that power will be reliably supplied.
    OK you may say this is only tiny compared to the amount of FF generation at present.
    Granted but build more and more of the above especially where resources are favorable near large load, then this will become the energy mix that the country will build.
    It is possible a large HVDC Transmission line may be needed to bring power from the west to the east and if the figures stack up this may be put in place.

    There are a large number of FF Generators that will get to end of life over the next 20 years and they need to be replaced.
    As i see it the above will happen plus there is another energy source not in the mix and that is tidal and wave energy of which there is an abundant supply not even tapped to any extent as of yet.

    • Ralph Buttigieg

      Yeah, looks good but can we wait until its actually built and run for a year or two before claiming victory?

      • RobertO

        Hi Ralph Buttigieg, And can we also bring the time table forward to say 10 years (5 to 7 years would do me but I am an optimist) From a practicable look we could if we wanted to, but the Fed Gov would need to agree to it and move quickly, if only they would get out of the way.

    • Ren Stimpy

      Ooooh you’re making me live

      • Ren Stimpy

        I REALLY LOVE the things that you do. I’m happy. You’re my best friend.

  • William Grace

    Although these developments are logical in the present circumstances it will be more efficient in the end for storage to be ‘pooled’ at network level rather than twinned with individual generation to produce a ‘firmed’ generation profile. I wrote about this at the time of the now forgotten Finkel Generator Reliability Obligation – see here https://sustainableplaces.com.au/finkel-wrong-storage/

    • Ren Stimpy

      Wave generation?

      • William Grace

        Definitely – wave generation strongest in winter when solar is weakest. Reduces necessary storage. LCOE of total system including storage is more important that LCOE of each form of generation.

        • Ren Stimpy

          Wave generation is not even a thing yet. Not even a tiny fraction of a percent. Don’t even try to give us a “definitely” before you have even tried to establish a business case, you dickhead.

          • Bruce MacGillivray

            Carnegie Clean Energy is quickly developing it’s wave technology. The Albany Wave Energy Project aims to produce 20MW with the potential to expand to 100MW They have operated a Wave Energy Project off the coast from the HMAS Stirling Naval Base, suppling the base with power and desalinated water since 2014.

  • Chris Fraser

    It tends to put importance back on transmission and connectivity. Assuming the capacity of the system is OK, it seems a strong argument for higher levels of utility scale wind and solar.

  • Tim Forcey

    “Caseload” or “baseload”?

    Typo above?

  • Ralph Buttigieg

    Thanks Giles for continuing to confirm my belief we don’t need NEG, Federal emission targets , carbon taxes etc.
    As you say we will be 33% RE around 2020. But theres more good news to come:

    Aprox percentage renewables (from memory)

    SA 40%
    Tas 100%
    ACT 100%
    Vic 40% by 2025
    QLD 50% by 2030
    NSW 19% now more in 2020s
    Plus about 1GW on rooftops a year

    So its going to be 40-50% sometime in the mid 2020’s I would think.
    More when Snowy 2, Battery Tasmania , extended networks or whatever come along to stablise the system.

    Hysterical ranting about the “extreme right” might be good click bait but achieve little more. Seems RE is now beyod the tipping point. They don’t need subsidies (the RET certificates will be worth SFA after 2020 anyway) nor emission targets.

    What is needed is to stop the socialists build expensive subsidized coal burners, a do no harm approach.

    • Ren Stimpy

      If by stop the socialists you are referring to Tony Abbott and George Christensen, those two Captains of government, then I agree.

      • MaxG

        they are not socialists, but the pure opposite: neoliberals.

        • Rod

          Advocating the State take over energy assets and build new energy assets is a Socialist trait. Imagine if Labor suggested it!

          When they come to sell them again, they will show their Neoliberal sides.

          • MaxG

            In order to qualify for a certain label it is not sufficient to fit (lets’ say) 1 out of 10 criteria. Or in other words you are not a communist, because you car share with your neighbour.

            If labour would build the coal burners it would be no different to (and as wrong) the LNP building them.

            The context is: the LNP wants to build coal burners to secure the interests of the incumbents to the detriment of their constituency — there is nothing socialist about it.

          • Rod

            Yes, context is everything but they are acting like the socialists they hate.
            The horse has bolted but I’m all for re-Nationalising energy.

            The cost of the promised competition that never materialised and the waste of multiple back offices and call centres is being added to consumers bills. And this bullshit that the end user is at fault for not finding a better deal really gets my goat.
            Of course, we can all see where Snowjob 2.0 is headed should the taxpayers fund it..

          • Nick Kemp

            “The horse has bolted but I’m all for re-Nationalising energy.”

            Not sure that will make power any cheaper for the consumer. Tasmanian gov owns the generation and network and just announced a 2% price rise despite all the electricity coming from hydro and wind. When the basslink is fixed they will revert to selling excess to the mainland and still charge us as much as they can get away with. Then they expect us to celebrate when hydro pays massive ‘dividends’ to the state government. It’s just taxation hidden in energy pricing and that is exactly what would happen if the whole grid was nationalized.

          • Rod

            Agreed, but those dividends do come back to the State rather than head overseas. And as we saw in Queensland, the Government can control the level of dividend it takes.
            Also, in Government hands the assets are more likely to get adequate maintenance and be replaced as needed rather than create scarcity.
            Also, also, those multiple back offices and call centres, advertising and churn costs would be greatly reduced.

          • RobertO

            Hi Nick Kemp When did Bass Link break again. It was fixed on or about the beginning of June.

            As for the Battery of the Nation this is how they will fund part of the projects

          • Nick Kemp

            I didn’t realize they had fixed it – I just look at the widget and assume that the constant hydro wind generation we have means it is still broken. usually when it’s working we seem to buy electricity in some of the time. Mind you, it has been wet and windy lately

          • RobertO

            Hi Nick Kemp, since it was fixed there also been a change in the amount of natural gas used to make electricity. Water is free fuel so they would always use that first. Prior the the latest break they were almost constantly using gas, but now that has slowed, it only used occasionally.

          • Ralph Buttigieg

            I called them socialist not for wanting to build coal burners but because they want government built and subsidized coal burners.

          • MaxG

            And therein lies the problem; the term socialist does not fit either of the three;
            a) as you said building coal burners has no relation to socialism;
            b) government building things has no specific relation to socialism; governments of all colour build things;
            c) gov subsidy is just that: a subsidy, which is an instrument to steer towards a desired outcome (hence, has nothing to do with socialism).
            Socialism in connection with democracy: is an international movement for freedom, social justice, and solidarity. Its goal is to achieve a peaceful world where these basic values can be enhanced and where each individual can live a meaningful life with the full development of his or her personality and talents, and with the guarantee of human and civil rights in a democratic framework of society.

            The labour movements of the past included public, direct worker or municipal ownership of the means of production, terms that have since been explicitly excluded under Blair and other Labour parties the world over. Which is in my books a direct betrayal of the very people they ought to support (or gave their support to them); why I despise labour for their privatisation policies, which ever since, screwed the public out of their savings and well being.
            The welfare state, which has been, as demonstrated over the years, quite sustainable, has been accused of being too expensive, in order to dismantle it on the claim it is unaffordable, and dipping into these very funds (literally making them state-owned) and spending these funds, but not for the purpose as intended.
            So in other words, it is like: I spend your money and then claim, well, there is not enough in the bank to pay for your pension, at the time claiming that paying your pension is not affordable — and people all over the world actually believe this crap.
            I could go on almost forever, but say this: the term ‘socialism’ has a long and colourful history, meaning all sorts of things, including what it isn’t; hence, my objection.

          • Ren Stimpy

            We have an opportunity here (Renewables) to distribute or scatter the ownership/competition of power generation therefore reduce margins/profits therefore benefit all consumers while still providing the basic service (guided by the market operators), and all that in light of essential emissions.

            It MUST be a superior model otherwise why would investors boycott coal investment? With all this (true) climate change swirling around them. These flook heads should listen to the market and change with the times.

            BTW Building coal burners does have socialist connotations. Massive non-economic – non-economies-of-scale concrete shit boxes built by government only – because the market won’t touch them!

    • Kevfromspace

      SA is at 50%, while ACT and TAS are not quite yet at 100% – closer to 85 or 90% right now.

      • Ralph Buttigieg

        Thanks for the update. It was from memory but close enough for my argument. Any idea what WA gets?

        • Brad

          8%, mostly wind. WA will get to 12% when currently committed projects are finished. Another 3% is very likely to go ahead and the full pipeline as it currently stands would get WA to about 27%. None of that includes rooftop solar which sits at a total of over 6% and is currently tracking at just below 200 MW per year, or just over 1.25% per year.

          • Ralph Buttigieg

            Thanks. The Eastern States numbers are boosted by hydro you would think theres lots of potential for RE in sunny WA

    • MaxG

      I strongly object: the socialists are not building coal burners; it is the neoliberals!

      • Ralph Buttigieg

        As far as I’m concerned if you want a government subsidised coal plant you are a socialist, don’t care what party you are in.

        • MaxG

          OK, that’s like me claiming purple is yellow… a personal interpretation.

    • hydrophilia

      But the coalition seems bent on preventing the retirement of FF & nuke plants and I would be happy to bet they will make every effort to hobble renewables and subsidize the old guard. And they CAN: witness the ridiculous regulations they tried to put on battery bunkers, witness proposals to subsidize coal plants or build them on the government’s tab, witness the efforts Trump is putting into subsidizing coal and nukes, witness the various proposals for high grid fees to make self generation less profitable…

      • Ralph Buttigieg

        We don’t have any nuke plants. The QLD LNP opposition have recently come out pro nonrenewables at state level. SA Libs don’t want coal burners they are investing in batteries. Will Hodgeman and his “Battery of the Nation” in Tasmania is a Liberal. NSW government is Liberal. To say coalition governments are necessary anti renewables is ridicules.

        At the fed level you have revengeful former PM who is pissed off he was dumped. Thats what this is really about.

  • Jon

    It’s looking good on an “average day” basis especially with a bit of time shifting inside the day or across a couple days.
    The harder but is when there’s a few cloudy days in a row or a large high pressure system than hangs around for a few days becalming the turbines.
    It’s great to see this happening and the more generation systems are spread around the less localised conditions will disrupt the network.
    Some fairly major transmission upgrades and big pumped hydro is needed to tie it all together I recon.

  • Brian Tehan

    I’ve been for lots of winter holidays up around near there off the coast. My recollection is that the maximum wind is in the afternoon, regular like clockwork (it’s annoying). I’ve looked up recentBOM stats and yes, the maximum wind appears to be between about 12pm and 5 or 6 pm – on the coast and Inland at Hughenden where the farm is. I’m not sure when the information for the graphs was recorded.

  • RobertO

    Hi All, And we still have a bunch of turkeys in the Fed Gov whom think we have to have new coal. If our elections go wrong these turkeys may be in charge and how would we stop this happening. I hope Australian see the sunlight and think about their choices. The mad monk has flip flopped many time and yet people think he wonderful. Hopefully we see an improvement next time

  • Radbug

    Another interesting idea. Swansea Uni team has found that up to 30% of the domestic natural gas flow can be replaced by hydrogen without necessitating infrastructure modification. Thus, any electrical supply in excess of storage could be channeled into the gas grid.

    • RobertO

      Hi Radbug, You can not do that, the H2 will leak out.

      They started preparing the Natural Gas network in the early 1990 and it still ongoing. Every time there is a leak in an area they upgrade or replace with H2 tolerant piping where possible. Each leak is profit going out the door, so it in the owners interest to cure leaks.

  • RobertO

    Hi All, so should we build just enough to cover our needs, on a daily basis (with the inherent risk that we will have the occasional day when we do not have enough energy. The occasional day is about 1 day per fortnight to one day per month and we may get 3 or 4 in a run and then get none for the next 6 months. This would be our cheapest option.

    Should we build more to be able to cover our poor RE days? This would be more expensive (more Solar, more Wind, more storage any sort). This would reduce the risk that we would still have the occasional day when we do not have enough energy. It may be 1 or 2 days a year.

    Should we build more to be able to cover our poor RE months. This is the most expensive (lots more Solar, lots more Wind, and lots more storage of any sort and also includes the risk of curtailment due to over supply of energy. One advantage if we do this is that we will have lots of spare energy to fight climate change. Mankind now know how to clean up our environment.

    Does it make sense if Japan wants H2 that we should build lots more and make a market to sell H2 to Japan. The natural gas pipes in Australia have for the last 20 years being upgraded into H2 tolerant pipes and it would not take much to block some parts of the network to reduce or remove the risk of leaks from well heads (I would hope that the Australian Gov would order the FF companies to remediate their sites but I live in the land of dreams, they would not do it for coal so why would you do it for natural gas). This could reduce our overall costs of the largest system needed.

    For this discussion the following have to be noted
    Demand Management would be applied to all, but more important to the first option
    Energy shortages is for parts of the NEM to have a shortage (maybe rolling blackouts for 1 to 100 000 houses or business and maybe for 1 hr to 4 hr in the day). FF mining or drilling are all prohibited, or stopped completely. FC would replace our Natural Gas Generators as standby emergency backup.
    Costs or Costing is assumed to be proportional

    • Ren Stimpy

      Almost TLTDDR (too long, too drunk, didn’t read)

      Demand management / aggregated load response – Yes
      Solar replacement of diesel on remote mine sites – Yes
      Batteries killing it in the FCAS market – Yes
      Batteries and aggregated demand response in the wholesale energy market – Henry Yeah!

  • Leif Erik Knutsen

    I offer one suggestion that I feel would make the transition explosive. Add a worker package of lifetime basic income and health care, proportional to hours worked, for lower up-front wages, which would drastically lower the initial build-out labor and finance costs.