ERWIN CHLANDA investigates.
The expenditure of $75m by the NT Government on a gas fired power station is a move entirely in the wrong direction, given the emergence of citizen-based electricity systems: For example, rooftop installed solar PV is now “the largest power station in Perth”.
This is the view of Prof. Peter Newman AO, Distinguished Professor of Sustainability at the Curtin University and director of its Sustainability Policy Institute.
In a paper co-written with Jemma Green, Prof Newman says the high cost of electricity, high radiant energy levels – sunshine – and easy access to cheap Chinese technology have led to dramatic buying of PV systems during the recent “boomtown years” in Perth: Nearly a quarter of all homes there have rooftop systems, “resulting in no new large-scale energy installations being required for the next several decades”.
And an Adjunct Associate Professor at the university, Rod Hayes, says a significant amount of the NTG’s $75m could be spent on advancing solar power in Alice Springs, with the same electricity output. He also explains how system instabilities can be overcome which Territory Generation claims are an obstacle to going beyond 20% solar. (See break-out report at the bottom of this page.)
More than 200,000 systems have been installed in Perth since 2010 and the purchase of solar PV is continuing to grow at over 20% per year.
Combined with battery storage these systems are set to rapidly change the “traditional uni-directional” generating structure into a “new distributed, bi-directional energy system,” says Prof Newman.
“This dramatic growth in solar PV has happened in Perth with limited government involvement [and] is expected to continue along with the emerging deployment of battery storage.”
A house, called “Josh’s House,” with solar passive design was built with solar PV and set up later with a battery storage system.
Josh Byrne (pictured), environmental scientist and ABC TV’s Gardening Australia presenter, lives there with his wife and two children. This house was fully monitored over a two year period. Its reliance on the grid reduced from 55% to less than 10% whilst uploading 75% surplus electricity to the grid.
The household drew energy from the grid during the few periods of consecutive cloudy days in winter.
It appears to the Alice Springs News Online that for those “few periods” there may need to be restrictions of use to limit the demand on the grid – something the public may well agree with in the interest of lower electricity prices and environmental considerations.
The alternative is what the NT Government is proposing at present: Have enough gas powered engines, which will be used less and less as people go PV, to meet at any time the peak demand – rarely ever reached – which is currently not subject to any restrictions.
The $75m Owen Springs power station will see taxpayers saddled with a facility that is hardly ever used to capacity – and will be less so as time goes by.
Says Prof Newman: “The grid is unlikely to be abandoned by most consumers.
“The evidence shows the solar power storage system cannot carry the household throughout the year even in highly sunny Perth.
“Instead, the option of load defection would allow consumers to be significantly less reliant on energy from the grid while still being connected.”
To achieve “a 100% load defection from the traditional energy system … the household solar PV system would have to go from 3 kW to 5 kW, a 66% increase, and the battery would have to be substantially increased from 8 kWh to 14 kWh of usable storage, a 75% increase.
“This additional infrastructure would require a commensurate increase in capital investment and would have a much longer payback period. The infrastructure would be used for a minimal amount of time during the winter when there is limited sun, with the rest of the power being sold back to the energy retailer at a low feed in tariff.
“The economics of total grid defection outlined in this scenario are not as compelling as the more than 90% load defection scenario with the smaller system.
“The economics of purchasing extra solar and batteries to support a household for just a few days a year do not add up,” says Prof Newman.
There are many other reasons why the grid is likely to continue after solar PV and batteries are mainstreamed.
“The grid is needed for equity purposes, as lower-income earners will not always be able to afford solar PV and battery storage options in the transition period and after.
“Operations and essential services that require access to constant and large amounts of power at all times of the day, such as hospitals, prisons and aged care centres, will also rely more heavily on the electricity network. The grid is needed by customers if their systems break down.
“Grids do go out when their main lines get cut due to extreme weather, fires and earthquakes,” says Prof Newman.
“In the new world of solar and battery storage these breaks will be lessened in their impacts. A grid can enable those parts impacted to be quickly restored as adjacent parts, that have not been impacted, can feed into the area from their storage.”
AT RIGHT: Aspiring energy traders?
The wide ranging study by Curtin, in summary, led to these significant conclusions:-
• The transfer to solar is likely to proceed apace with or without the collaboration of the government-owned and other centralised utilities: People can gradually switch their electricity requirements to their own installations, especially with the falling prices of battery storage.
• In time this will lead to more and more people dropping off the grid or resorting to it for only 10% of their needs.
• The centralised utilities will then have assets well in excess of requirement and the earnings from them will drop to levels that are not economical.
• In turn the people owning PV generators can become electricity entrepreneurs in their own right, selling power into the grid, or to their neighbours.
• They can do that at terms they mostly control, especially with the progress of storage technology: They can play the market by using their own power, buying it in and storing it, and selling it when the market goes up, even at different times during a single day.
• Prof Newman says consumers will “potentially become energy traders, only selling electricity back to the grid when the buyback price is what they desire … these sales are likely to be through local groups of buyers moderated through the internet … we have called this citizen utilities. This will put downward pressure on electricity prices and bring with it new economic opportunities”.
• The growth of storage capacity in private hands will make the public less dependent on power supplied by large private and government installations, the latter run at the discretion of politicians and subject to their whim.
* Curtin has not found insurmountable problems integrating any amount of solar into the grid, while the NT Government claims that about 20% is the limit.
• All along there will be significant development towards renewable power and departure from oil, gas and coal, an objective of the vast majority of Australians.
Prof Newman says: “In the last 25 years, the amount of renewable energy installed around the world has increased by 81% and in the past decade by almost 40%.
“Deustche Bank modeled solar PV pricing in 60 countries and found that 30 had regions in which rooftop installed solar PV electricity was at grid parity. Germany reached grid parity at the end of 2012 and had the strongest solar PV take-up in the world with 24.8GW of installations by 2011.
“It is now virtually impossible to obtain commercial financing for coal energy projects across the EU, the United States or when using World Bank finances.
AT LEFT: Interior of “Josh’s House”.
“Since 2008, renewable energy uptake in Europe has wiped off more than half a trillion US dollars from the value of traditional energy companies. The largest utility in Germany, E.ON, had a three-quarter share price drop since 2010. The second largest utility, RWE, saw its recurrent net income fall by a third since 2010,” says Prof Newman.
“Since 2008, China has become the world’s largest producer of solar PV, providing about one third of total cell shipments globally. With the increasing output there has been a corresponding improvement in production technology, in the quality of the solar PV components and a subsequent decrease in the overall cost.
“In April 2015, the founder of technology-company Tesla, Elon Musk, announced the launch of Tesla’s home battery storage system, which will sell for US$350/kWh. This has set the retail price for solar power storage batteries substantially lower than forecasts had predicted.”
Says Prof Newsman: “The boom-time in Perth was predicted to rapidly increase the need for peak power from the centralised system and hence an old coal-fired power station was recommissioned at a cost of $500m and returned to service the grid.
“However, it was never needed as the household solar PV reduced the demand on the grid so effectively that it led the Minister for Energy to conclude that the grid would never again need to build a power station.
“The growth of solar PV adoption to 70% by 2025 was inevitable. Over time, the transmission network is likely to be utilised less and is therefore at risk of having some of its value written down.”
Nevertheless, Prof Newman says it is likely that incumbent businesses will fight against the market uptake of renewables: “They can lobby for protectionist policies that maintain their market share.
AT RIGHT: Protesters in Alice Springs today, with Chief Minister Adam Giles (blue shirt).
“Utilities could insist that consumers continue to pay for infrastructure when they no longer utilise it, through the implementation of higher fixed charges.
“The increase in charges to customers will have a high elasticity effect on demand, and may result in further reasons for customers to defect from the grid entirely.”
On the other hand, “incumbent utilities can embrace this new reality and continue to play to their strengths as established brands with a wide customer base and technical experience.
“They can adapt their product offerings and services to this new market [with the] deployment of new technologies, with new business models, that enable the transition to a distributed, market-based and fossil-fuel-free power system.”
… and why more solar would not crash a well-managed grid
By ROD HAYES
Group Chairman and CEO, Balance Services Group
Adjunct Associate Professor, Curtin University Sustainability Policy Institute
Solar energy output fluctuates with the level of sunshine hitting the panels. When there is a high proportion of solar energy in a small power system this intermittency causes system stability issues.
The generators are forced to try and fill in the spikes and troughs and if the change is large enough the generators can effectively “stall”. Generally these stability issues start to arise when solar energy makes up between 20 and 30% of the energy mix in the system.
In regional Western Australia the integrated power utility, Horizon Power, is successfully managing this issue by requiring any commercial customer installing solar PV to manage the intermittent output before it comes into the grid.
The market has responded to the challenge largely through the use of battery based energy storage to smooth the solar output. Because the cost of electricity supply is high this solution of batteries and solar PV still provides an excellent financial benefit to the customer and takes considerable strain off the capital investment required by the utility.
This approach could be used in the context of Alice Springs, either for rooftop solar or for larger solar farms or most likely a combination of the two.
A typical energy conscious modern residence can achieve a level of 80-90% energy self sufficiency at a cost of under $15,000. Such a system would include 3-5 kW of solar panels and around 9 kWh of battery storage.
Instead of investing the full $75m in a 100% fossil fuel fired power station, a smaller gas power station could be built, with some of the capital used to build a “solar smoothed” solar farm with batteries, and some also used to support the uptake of “solar smoothed” household or commercial rooftop solar.
Such an approach would reduce the electricity demand on the system particularly during peak periods, reduce greenhouse gas emissions and ultimately cost less in both capital and operating terms than the proposed approach.
BELOW: Protesters in Alice Springs today.