Shaping tomorrow’s energy supplies

Something’s off balance, the recent Climate Institute survey revealed that fewer than one in ten conservative voters want a fossil fuel-dominated energy system in the future, yet as many as 25 coalition backbenchers – elected representatives of the people – are still banging the drum for fossil fuels and have convinced the Prime Minister to build more coal fired generators. Energy majors meantime have no intention to build new coal plants and instead are investing heavily in renewables. And as Finkel et al advise, coal is no longer the cheapest technology to supply base-load power. What’s going on?

Finkel’s main policy recommendation was a Clean Energy Target to pave the way for an orderly transition to a low emissions future that encourages investors to build new generators and puts downward pressure on prices. It boosts reliability by rewarding consumers participating in demand response and distributed energy and storage. But not all are prepared to accept the transition.

In a recent address to the Institute of Public Affairs former prime minister Tony Abbott outlined his energy plan that entails fixing the renewable energy target at 15 per cent, building a new coal-fired power station, and a moratorium on new wind farms.

The failure to factor in the higher cost of coal-fired generators, the high levels of destructive pollution versus the lower cost of solar and wind generations (and all their environmental attributes), the blind eye toward the findings of the Finkel Review as and just as importantly the will of the electorate is mind-boggling.

The magnitude of support among Liberal party voters was highlighted by the Climate Institute poll conducted by Galaxy which found no fewer than 77 per cent of Liberal supporters think governments should implement a plan for the orderly closure of coal-fired power stations and their replacement with clean energy, and 51 per cent of Liberal voters think Australia should phase out coal generation within 20 years.

The section titled ‘The politics of climate change and energy’ reveals 58 per cent of Liberal supporters are fairly or very concerned about climate change, and a similar number of Liberal supporters think Australia should set targets and implement domestic action to achieve net zero emissions.

The poll also found 72 per cent of Liberal and 65 per cent of National voters place solar in their top three preferred energy sources for the country.

Less than 10 per cent of those supporting any conservative party want to maintain a fossil fuel-dominated energy system into the future, 90 per cent support a full-scale transformation to an electricity system supplied by renewables and storage technologies.

The message is clear: 68 per cent of Liberal voters want state and territory governments to put incentives in place to encourage renewable energy development.

Well that’s enough numbers for now.

But some moves are underway to usher in changes to a 21st century energy market.

Powering up security

The Australian Energy Market Commission recently released its power system security report with a package of

reforms to guard against technical failures that lead to cascading blackouts, in essence a package to strengthen

the national electricity market, so it can deliver stable and secure power supply to homes and businesses.

 

As seen in the preamble: “Consumers are choosing a variety of technologies [including wind and solar]

to provide power, and this means the system is becoming more complex and needs to be managed differently.”

 

AEMC Chairman John Pierce said the rules address risks to energy security created by the power system’s changing

generation technologies as more ‘non-synchronous’, lower emission generators like wind and solar come in;

and ‘synchronous’ generators like coal retire.

 

“We are focused on the power system’s evolution. Our reform package is looking at ways to stabilise the

system as the generation mix changes, and new technology generators connect,” Pierce said.

 

The proposed rules to better manage frequency and strengthen the system will involve AEMO and the networks

implementing solutions together.

 

The AEMC’s report was welcomed by AEMO Chief Executive Audrey Zibelman who commented “We

acknowledge the progress made on these important matters to date and look forward to continuing the

collaborative work to ensure the services required for the secure operation of the power system remain

available in the future.”

 

Among other matters the new plan for power system security makes networks provide minimum levels of inertia

and foreshadows a new market-sourcing mechanism for inertia services and facilitates greater use of new

technology like battery storage to back-up the system when

something goes wrong.

 

The package is consistent with the system security outcomes recommended by the Finkel review.

 

For more information visit http://www.aemc.gov.au/Markets-Reviews-Advice/System-Security-Market-Frameworks-Review/Draft/AEMC-Documents/Final-report.aspx

 

Demand response

Ramping up effort on demand response where consumers are enticed to voluntarily move their energy use from periods of high demand when supplies are stretched to times when supply is plentiful – was one of the key recommendations of the Finkel Review which endorsed ARENA and AEMO’s pilot program to trial demand response.

Total funding for ARENA and AEMO’s demand response program has now expanded from $22.5 million to $37.5 million over three years, with the NSW Government pitching in $7.5 million.

The initial grants focused on technologies in Victoria and South Australia. The recently announced additional $15 million funding pool will be reserved for NSW projects in a bid to generate up to 70 MW of demand response capacity.

The three year pilot program will trial demand response during extreme weather and grid emergencies from this summer in a bid to reduce demand on extreme hot days or during emergencies, and avoid unplanned outages.

The program involves paying energy users to reduce their energy consumption, free up stored supply or switch to distributed generation on request when reserve capacity falls to critically low levels.

The funding round will be open to a wide range of demand response technologies and methods from demand response aggregators to smart thermostats to battery storage to behavioural demand response projects.

ARENA funding will provide grants to fund technology for energy users to become demand response-enabled, including metering, monitoring, storage and distributed generation equipment and other set up costs.

ARENA Chief Executive Officer Ivor Frischknecht said the matched funding from NSW allowed the pilot program to be expanded.

“With the support of the NSW Government, we are able to scale up the pilot program by more than 50 per cent which we expect will offer more than 160 megawatts of innovative demand response across the National Electricity Market – of which more than a third will be available for NSW.,” he said.

“And this is just the beginning. This pilot program will provide proof of concept for how innovative and flexible demand side resources can help provide security and reliability as we transition to an electricity system powered by more variable renewables.

“A well-designed demand response program will provide a contingency in case of emergencies without relying on fossil fuels. Long term we expect electricity use to increase when renewable energy is plentiful and decrease when it is in short supply. This will make better use of our existing electricity infrastructure and help reduce energy costs for businesses and households.”

Visit www.arena.gov.au for more details.

Funding applications close on Monday 17 July 2017 5pm AEST.

The Energy Efficiency Council commented “This is fantastic news, and demonstrates that momentum is building in Australia’s transition to a 21st century energy system … We are emerging from a long period of inertia in Australia, which saw tools like demand response being left in the toolbox, despite the fact that they can bring down costs and improve reliability. That has contributed to skyrocketing costs for energy users, and reduced system security. Where demand response gets exciting is when you can do it quickly, and at a scale.”

Powering up security

The Finkel Review also highlighted the importance of a well-resourced regulator in the proper functioning of the National Electricity Market, and for the four years from July 1 the Australian Energy Regulator’s funding will increased by $67.4 million.

The funding announcement is welcomed by the AER whose Chair Paula Conboy commented on the need to ensure the regulator can meet the demands of its new roles and functions, and the challenges of an increasingly complex energy market.

“The AER has an important role in helping to deliver security, reliability and affordability in energy markets through our work in network regulation, consumer protection and monitoring the effectiveness of wholesale markets,” she explained.

Matters of energy security are front of mind for ANU Professor Andrew Blakers who told the Australian Solar Council that new findings on pumped hydro storage provided a valuable contribution to the national discussion on energy security.

 ANU identifies possible pumped hydro sites in SA  

 As previously reported, ARENA is providing $449,000 support for an ANU-led feasibility study to develop a nation-wide atlas of potential off-river pumped hydro storage sites.

Researchers at ANU have now identified 185 sites in South Australia that are potentially suitable for pumped hydro storage and may help secure Australia’s electricity grid. The ANU team has considered the possible benefits of using hydropower energy storage, where water is pumped uphill and stored to generate electricity on demand.

“Our work shows that there are many sites in South Australia that may be suitable for establishing pumped hydro storage, to help build a sustainable, secure and affordable electricity grid,” said Blakers who is the study’s lead researcher.

He believes pumped hydro energy storage – which accounts for 97 per cent of energy storage worldwide – could be increased across the country to support high levels of renewable energy, primarily solar PV and wind.

“All the potential sites in South Australia are outside national parks and urban areas, and like all hydro power can go from zero to full power very quickly,” said Blakers whose earlier work demonstrated the feasibility of 100 per cent renewable electricity for Australia supported by pumped hydro storage.

The water would be stored in an upper reservoir and run through a turbine to a lower reservoir when electricity is needed – such as when the sun is not shining or the wind is not blowing. The water can then be pumped back uphill when electricity from renewables and other sources is abundant and cheaper.

A map of the potential sites is available at <http://re100.eng.anu.edu.au/news/2017-06-16.php>.

The project is part of ARENA’s focus on supporting flexible capacity solutions to ensure a smooth transition to a renewable energy future.

“Storage is becoming more important and valuable as we move towards higher levels of renewable energy in our grids,” ARENA chief executive Ivor Frischknecht said. “Pumped hydro is the most mature form of energy storage, and studies like these are helping to determine whether it could play an even greater role in increasing grid stability.”