EXCLUSIVE by ERWIN CHLANDA
NT Treasurer Dave Tollner presents the government’s case for the new $75m power station, bolstered by facts and figures to date in short supply on the other side of the debate.
He is the sole shareholder, on behalf of the NT Government, of Territory Generation, which is building Alice Springs’ new power station at Brewer Estate – Owen Springs, consisting of 10 gas-powered engines.
He says the project, looking at the national and international electricity generation scene, is exactly what Alice Springs needs: “It is fantastic.”
Mr Tollner, as the Member for Solomon in Federal Parliament under the Howard Government, says he was one of the key movers to have Alice Springs declared as a solar city: it became one of seven.
While professing to be keen on renewable electricity generation he says it needs to be looked at with blinkers off.
Germany’s electricity is 40% per cent from renewables. But it has one of the most unstable networks in Europe and is the biggest user of French nuclear power.
This type of instability, which had all of Italy without electricity for a week five or six years ago, comes from the peaks and troughs of renewable power: Take a cloudy day or one without wind. The base load system (gas, for example) is chugging away.
Then comes the sun, or the wind starts to blow, and suddenly the cables are overloaded, they heat up, melt, collide and fail. Brownouts or blackouts are the result, says Mr Tollner (pictured).
With present technology a 20% input of renewables is the “rule of sum” that can be handled, with highly skilled technicians keeping an eye on it 24/7.
“Alice Springs is well over that 20% now,” says Mr Tollner.
Nothing will change until excess power can be stored in batteries, such as Teslar, but Mr Tollner would not predict when these will get to a price that makes them viable as an alternative. But he estimates their cost will add another 20c to 30c per kilowatt hour (kWh) cost, almost the same as current generation cost.
We need to look no further than our remote communities for examples: they rely mostly on diesel motors – the most expensive form of generation.
In several communities where renewables have been introduced, far from saving money, the stopping and starting of the diesel motors, or their uneven running, triggered by the sunshine and wind variations, has in fact increased diesel consumption.
There is a $7.5m solar plant at Hermannsburg, 125 km west of Alice Springs. It is a great success, says Mr Tollner – as an attraction for tourists taking pictures of it.
“The core blew up. The plant hasn’t worked practically from the time it was installed,” says Mr Tollner.
That was in 2005. The key piece of equipment to fix it still hasn’t been found anywhere in the world.
Mr Tollner says an example of the massive taxpayer’s subsidies renewables require is the experience of his father in Queensland.
He covered his roof in photovoltaic panels and is selling power to the network for 60c a kWh, subsidised by the Queensland government.
Electricity can be generated with coal for between 5c and 15c per kWh. Including the wires and retail the cost is 30c – still half of what his father sells electricity for to the state.
Mr Tollner says Queensland is honouring these contracts but not renewing them nor entering into new ones with private producers.
A similar system existed in Alice Springs during its solar city heyday. It was shut down after five years.
Mr Tollner says the governments are clamping down on the “gold plated” distribution systems which have gobbled up subsidies around the nation.
The Australian Energy Regulator has replaced most state-based regulators and will replace the Territory’s Utility Commission from July 1.
This has resulted in a 30% reduction of network charges while still providing security for investors in electricity networks.
In the Territory alone the taxpayer subsidises power by $170m a year – and it would need to be “much more” if renewables were phased in beyond the present level, says Mr Tollner.
Commercial consumers pay a “cost reflective” amount but private consumers – households – are heavily subsidised. Remote communities cost $80m a year – nearly half of the total subsidy bill.
Alice Springs domestic users are disproportionally subsidised because there are fewer homes than in Darwin and the network is smaller.
The most economical system is to use coal – which is “unbeatable” – for base load (but we don’t have any), with renewables in the mix to the extent they can be managed, and gas for peak demand.
Coal engines take a week to start up and a week to shut down. Gas takes 15 seconds. It costs significantly more than coal but is much cleaner.
How did the USA achieve its “enormous” reduction in greenhouse emissions? By using shale gas obtained by – you guessed it – fracking, and replacing coal power stations.
Engine technology is equally important, says Mr Tollner: McArthur River Mining has built a new power station upping its output from 20 to 30 megawatts (MW) while using the same amount of gas. (Alice Springs has an average demand for about 25 MW and the peak is around 58 MW.)
“McArthur River now uses new engine technology, such as we’re putting into Alice Springs,” he says.
Here this will result in a 10% to 15% reduction of power costs for commercial users.
“That’s a 30% reduction of the generation costs as half the tariff is for distribution and retail,” he says.
On January 1 the tariff across the Territory was reduced by 5% after making improvements to the Channel Island power station in Darwin.
Domestic consumers will not get a further reduction: “They are being subsidised already.”
And so the experiments continue: 10 remote Territory communities are getting plants with a combined 10 MW capacity, running on renewables, under the Australian Renewable Energy Agency (ARENA) scheme.
Even with a $35m subsidy from the Federal ARENA, and $30m from the NT, the cost per power unit will still be “borderline” with diesel.
This experiment “is purely out there as a feel good measure to demonstrate we’re doing something for the environment,” says Mr Tollner.
He recalls during a trip to China mingling with people wearing masks to cope with smog and pollution. He was talking to a woman promoting solar panels. He asked her if they make power at a competitive price. She said, no but think of the environment.
He says he replied, with his Treasurer’s hat on: “In the Northern Territory we have 240,000 people on 1.3 million square kilometres. Our biggest greenhouse problem is bush fires. If we increase our emissions from power stations fourfold nobody would notice any difference.
“Our great pressure is cost of generation, not greenhouse emissions.”
PHOTOS: Top – Austrian-built Jenbacher piston engines built for gas similar to the ones to be installed in the new power station. Above – The stillborn Hermannsburg solar power station.
New power station: The other side of the $75m coin.
EXCLUSIVE by ERWIN CHLANDA