Dozens of energy "stakeholders" shuffled into Boston Consulting Group's 41st floor Sydney eyrie on Friday to help the Australian Energy Market Operator (AEMO) plot the future of the country's main power grid.
The workshop, closed to the public, had some tricky issues to discuss quite apart from this past week's political eruptions over federal Labor's plan to spur demand for electric vehicles (EVs).
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| Planning a way forward for the power sector is getting increasingly complex. Credit: James Davies |
But despite the tizz over Teslas, the power industry is facing far more immediate tests.
These include the challenges of absorbing the leap in supplies of renewable energy, particularly solar, and the prospect of more coal-fired plants suffering sudden failures. Not on AEMO's list, however, is any plan for a national grid that is compatible with Australia's Paris climate commitments.
Maintaining the National Electricity Market (NEM), the world's largest single grid, will always have its issues. These have been exacerbated by the rise of electrons flowing both ways, as renewables allow consumers to be both consumers and exporters of power.
Solar panels are continuing to go up on people's homes at a record rate - AEMO chief executive Audrey Zibelman says it is the equivalent of a new coal-fired power station a season - adding both opportunities and strains for network managers.
Too much of a good thing?
The grid appears to be having difficulty absorbing the boom in large-scale solar and wind farms, if AEMO's recent release of its draft Marginal Loss Factors (MLF) report is any guide. This assessment identified regions where supplies are overwhelming grid loads and recommended restraining generators at the edge of the grid through price and output curbs.
The 200-megawatt Silverton Wind Farm in far-western NSW has had the price it receives for its power cut to about 80¢ in the dollar for 2018-19, and the amount of power it is allowed to feed into the grid slashed to a quarter of its total capacity when the nearby Broken Hill solar plant is operating.
Across the border in Victoria, the price received by the 88MW Bannerton Solar Farm will drop from about 90¢ in the dollar to around 80¢ for the coming year.
"As more generation is connected to electrically weak areas of the network that are remote from the regional reference node, MLFs in these areas will continue to decline," AEMO said.
University of Melbourne energy researcher Dylan McConnell says the loss-factor changes are huge for some producers and "will affect their financing and risk profile".
"We've never had such a roll-out of distributed power," he says, adding it is "not necessarily a bad thing if it encouraged new generation to go where it's most valuable".
Coping with the closure in 2022 of AGL's Liddell coal-fired power plant in NSW is almost the only guaranteed change AEMO and the power industry can plan around.
Demand response, which has been debated for two decades, is also gathering traction, including several trials over the past summer when big users agreed to cut power usage to ease supply squeezes.
EV opportunities and costs
The collapsing price of energy storage - whether in the form of a home battery, mobile ones on EVs or grid-scale units - is opening up other challenges as well as opportunities.
A report last week by Evenergi attempted to forecast how the eventual acceleration of EV demand will play out, based on data from about 1600 participants in South Australia.
"Significant implications" for the power network were not expected to kick in until after 2025 - a time when electric vehicles and petrol or diesel ones reach price parity," it says.
EVs, "if managed correctly", could improve network asset use and improve cost outcomes for consumers, the authors stressed.
Against this optimism is the prospect that with poor management, grids will come under extra strain as increasing numbers of EV drivers charging their cars at the same time add to peak demand rather than reduce it.
"The greatest risk area for hotspots occurring in single locations are DC-rapid chargers in public carparks, DC-rapid highway chargers, pool vehicles locations and bus fleets," the authors found.
At least one major network operator working with AEMO on EVs is assuming a similar 2025 timeframe. A senior manager in demand management told the Herald and The Age it was "still early days yet”.
“There’s still plenty of capacity certainly in [our] network to manage demand for these EVs,” the manager says, adding that research will be needed beyond the “five-plus years before demand from EVs starts to make a difference".
Consumers in charge?
Grattan Institute energy director Tony Wood says EVs may be able to make a lot of electricity available for the grid.
"You can come home and plug your vehicle in and the network will see that the battery is 70 per cent full," he says. "If the demand for electricity is high it can harvest your power instead of charging your battery, charging it later in the night."
Bruce Mountain, head of the Victoria Energy Policy Centre at Victoria University, says the rapid development of new technology means that "a lower-cost energy awaits, not just in private transport but also energy use in the home".
Key to grasping the "fantastic" upside, though, will be regulators who put consumers at the forefront. "It's precisely to avoid vested interests setting the future pathway," Dr Mountain says.
Friday's workshop discussed adding an extra scenario to the four previously under consideration for AEMO's next Integrated System Plan to account for the industry meeting the Paris climate goals.
Participants - from generators to distributors and regulators - explored "brakes, barriers and borders" of a slow change to the grid. The most upbeat scenario was dubbed "we did it", and included "unquestioning support for net zero [emissions] by 2050". The most negative outlook included planning for "extreme climate change impacts", "populist nationalist governments" and even "war".
Links
- Australia's waking up': take-up of electric car charging points to market shift
- Coal power baron says electric vehicles an inevitability
- Road to nowhere: why Australia lags behind in electric vehicle revolution
- Electric Vehicles An Opportunity For Local Government
- 'Woefully Dirty': Government Accused Over Australia's Failure To Cut Vehicle Emissions
- How green are electric cars?
- 'They've done nothing': fuel emissions taskforce accused of 'apathy'
- Australia's annual carbon emissions reach record high
- Australia's annual emissions continue to rise, driven by LNG production
- Half of Australia's emissions increase linked to WA's Gorgon LNG plant
- Australian government backs coal in defiance of IPCC climate warning
- Australia's emissions rise again in 2017, putting Paris targets in doubt
- Australia's greenhouse gas emissions highest on record
- The eco guide to Electric Vehicle hype
- Queensland to build one of the world's longest electric vehicle highways
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