Australia’s Green Electricity
                             Schemes
                       Costs and Benefits
                               Perth
                                                 13 February 2013

                                                  Dr Robert Barr

                                             Electric Power Consulting Pty Ltd

                2012 National Professional Electrical Engineer of the Year - National Lecture Tour


© Electric Power Consulting Pty Ltd   2012
                                                                                                     1




                                Perfect Storm of Rising
                                   Electricity Costs
              •     Conventional Generation
              •     AEMO Market Charges
              •     Metering
              •     Network Charges
                      – N-1 type regulatory requirements
                      – Somerville Report (2004)
                      – P.M. says “gold plating”
              • Green Electricity Schemes
                      – Carbon Tax
Electric Power Consulting Pty Ltd
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                                                                                                         1
Solar Photovoltaic




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                                          Wind




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                                                                 2
Hydro




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                                Valley Power, Latrobe Valley, Victoria Australia
                                       300MW Open Cycle Natural Gas




        6 x 50MW Peaking Plant – Snowy Hydro

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                                                                                           3
Eraring Power Station




        4x 660 MW Black Coal

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                                    Yallourn Power Station




        1,490 MW Brown Coal – 4 units

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                                                                 4
Tallawarra Power Station




        435 MW Combined Cycle Natural Gas

Electric Power Consulting Pty Ltd
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                                    Muja Power Station




        2 x 200 MW + 2 x 227 MW Coal

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                                                               5
Electric Power Consulting Pty Ltd
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                            Electricity Green Schemes

          • National Schemes
                  – Large Renewable Energy Target (LRET)
                          • includes large wind, solar & hydro


                  – Small Scale Renewable Energy Scheme (SRES)
                          • including solar water heaters, heat pumps, solar panel
                            systems, small-scale wind systems, small hydro


                  – Carbon Tax

Electric Power Consulting Pty Ltd
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                                                                                     6
Electricity Green Schemes
          • NSW Schemes
                  – Energy Saving Scheme (ESS)
                          • incentives to save energy
                  – Greenhouse Gas Reduction Scheme (GHGR)
                          • CO2 abatement scheme – targets with penalties
                  – Solar feed-in tariff (was gross – now net)
          • Other States
                  – Solar feed-in tariffs
                  – Others?

Electric Power Consulting Pty Ltd
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                          Energy Environmental Objectives
              • Resource Sustainability
                      – How many years can we keep up our current use of resources
                        before they run out?


              • Reduced Carbon Emissions
                      – How many tonnes of CO2 emissions/year can be saved?


              • National Energy Independence
                      – Can we sustain our energy needs without undue dependence on
                        overseas supplies?




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                                                                                          7
Australian Fuel Sustainability

                                                   Proven Reserves (approximate)
                             Fuel
                                                     At current      At Australian 
                                                  production rates    usage rates

                       Brown Coal                    1,000 years      1,000 years


                        Black Coal                    100 years        240 years


                       Natural Gas                    72 years         112 years




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                                              Carbon Intensity
                                     Tonnes of 
             Fuel
                                    CO2 /MWh 

       Brown Coal                      1.4 
      Black Coal                       0.9
     Natural Gas
   Open Cycle Gas                      0.65
       Turbine
     Natural Gas
   Combined Cycle                      0.4
     Gas Turbine
        Hydro                           0
        Wind                            0
          Solar PV                      0




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                                                                                           8
Construction Cost
                                                  $ Capital 
                                     Tonnes of 
             Fuel                               Construction 
                                    CO2 /MWh 
                                                 Cost/MW
       Brown Coal                      1.4         High
      Black Coal                       0.9         High
     Natural Gas
   Open Cycle Gas                      0.65         Low
       Turbine
     Natural Gas
   Combined Cycle                      0.4       Medium
     Gas Turbine
                                                 Extremely 
            Hydro                       0
                                                    high
            Wind                        0           High
          Solar PV                      0        Very high


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                                                     Dispatch
                                                  $ Capital     Dispatch 
                                     Tonnes of 
             Fuel                               Construction    Capable
                                    CO2 /MWh 
                                                 Cost/MW
       Brown Coal                      1.4         High           Yes
      Black Coal                       0.9         High           Yes
     Natural Gas
   Open Cycle Gas                      0.65         Low           Yes
       Turbine
     Natural Gas
   Combined Cycle                      0.4       Medium           Yes
     Gas Turbine
                                                 Extremely 
            Hydro                       0                         Yes
                                                    high
            Wind                        0           High          No
          Solar PV                      0        Very high        No


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                                                                                 9
Ability to Rapidly Change Output
                                                  $ Capital     Dispatch    Ability to Rapidly
                                     Tonnes of 
             Fuel                               Construction    Capable      Change Output 
                                    CO2 /MWh 
                                                 Cost/MW
       Brown Coal                      1.4         High           Yes              No
      Black Coal                       0.9         High           Yes              No
     Natural Gas
   Open Cycle Gas                      0.65         Low           Yes              Yes
       Turbine
     Natural Gas
   Combined Cycle                      0.4       Medium           Yes          Moderate
     Gas Turbine
                                                 Extremely 
            Hydro                       0                         Yes              Yes
                                                    high
            Wind                        0           High          No               Nil
          Solar PV                      0        Very high        No               Nil


Electric Power Consulting Pty Ltd
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                                                          Wind
                                      • Every 100MW of wind generation requires
                                        about 90 MW of conventional generation for
                                        backup

                                      • All wind generation needs a “dancing partner”

                                      • Wind is only financially viable with LRET

                                      • Will most likely be the main method of
                                        reaching the 20% renewable target for 2020



Electric Power Consulting Pty Ltd
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                                                                                                      10
Solar Photovoltaic
                                    • Lends itself to distributed use at the
                                      domestic level

                                    • At 60 c/kWh and other green
                                      scheme subsidies it becomes
                                      attractive to customers

                                    • Is causing network stress


Electric Power Consulting Pty Ltd
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                       Embedded Generation Issues

 • Benefits                                           Negatives
                                                       ◦   Voltage rise
         –    Reduce network losses
                                                       ◦   Cold load pick up
         –    Delay augmentations?
                                                       ◦   Dual power flow analysis
         –    Voltage support?
                                                       ◦   Some network
         –    Green kWhs?                                  augmentations required




                                                                                      11
Modeled Conventional Dispatch




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                                     Modeled Small Wind




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                                                                         12
Modeled Large Scale Wind




                                                 13% Wind

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                                    SA Wind




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                                                            13
Modeled Large Scale Wind
                             Constant Load – Dancing Partner




             70% of 0.65 Tonnes CO2/MWH OCG= 0.45 Tonnes CO2/MWH

             Compare with 0.4 Tonnes CO2/MWH for CCG
                                                                    30% Wind

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                                        CO2 Emissions




                                    +                  >
   Wind                                   OCG                      CCG


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                                                                               14
AEMO Data

                                                      Carbon Tax




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                                     Conclusions
               • Renewables are only viable with government
                 legislated green schemes

               • Wind and solar PV generation require large scale
                 conventional “backup” power generation –
                 dancing partners

               • Economics will drive much of the “back up”
                 generation to be open cycle gas:
                       – Capital cost
                       – Higher CO2 producing plant
Electric Power Consulting Pty Ltd
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                                                                        15
Conclusions
             • The current policy settings are increasing the use of natural gas
                – reducing Australia’s sustainability in terms of energy reserves

             • Greenhouse gas savings are coming mainly from:
                – the switch from coal to natural gas
                – Less energy use due to high energy prices and price elasticity

             • Wind and solar PV in their present form are making little or no direct
               contribution to CO2 savings

             • New energy storage breakthroughs are required to make renewables
               viable



Electric Power Consulting Pty Ltd
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                                    Important Issues
              •     Increased focus needed on:
                     – end use energy efficiency
                     – Using less electricity
                     – electricity network losses

              •     Research
                     – energy storage

              •     Change of emphasis from:
                     – “feel good” green schemes to policies that have some solid engineering
                       logic

              •     Electricity Network costs
                     – getting away from feast and famine capital investments
                     – improved performance of regulators
                     – taking a longer term view
Electric Power Consulting Pty Ltd
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                                                                                                16
Questions?




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                                                      17

Green schemes 2012_npe_eo_y lecture perth v9

  • 1.
    Australia’s Green Electricity Schemes Costs and Benefits Perth 13 February 2013 Dr Robert Barr Electric Power Consulting Pty Ltd 2012 National Professional Electrical Engineer of the Year - National Lecture Tour © Electric Power Consulting Pty Ltd 2012 1 Perfect Storm of Rising Electricity Costs • Conventional Generation • AEMO Market Charges • Metering • Network Charges – N-1 type regulatory requirements – Somerville Report (2004) – P.M. says “gold plating” • Green Electricity Schemes – Carbon Tax Electric Power Consulting Pty Ltd 2 1
  • 2.
    Solar Photovoltaic Electric PowerConsulting Pty Ltd 3 Wind Electric Power Consulting Pty Ltd 4 2
  • 3.
    Hydro Electric Power ConsultingPty Ltd 5 Valley Power, Latrobe Valley, Victoria Australia 300MW Open Cycle Natural Gas 6 x 50MW Peaking Plant – Snowy Hydro Electric Power Consulting Pty Ltd 6 3
  • 4.
    Eraring Power Station 4x 660 MW Black Coal Electric Power Consulting Pty Ltd 7 Yallourn Power Station 1,490 MW Brown Coal – 4 units Electric Power Consulting Pty Ltd 8 4
  • 5.
    Tallawarra Power Station 435 MW Combined Cycle Natural Gas Electric Power Consulting Pty Ltd 9 Muja Power Station 2 x 200 MW + 2 x 227 MW Coal Electric Power Consulting Pty Ltd 10 5
  • 6.
    Electric Power ConsultingPty Ltd 11 Electricity Green Schemes • National Schemes – Large Renewable Energy Target (LRET) • includes large wind, solar & hydro – Small Scale Renewable Energy Scheme (SRES) • including solar water heaters, heat pumps, solar panel systems, small-scale wind systems, small hydro – Carbon Tax Electric Power Consulting Pty Ltd 12 6
  • 7.
    Electricity Green Schemes • NSW Schemes – Energy Saving Scheme (ESS) • incentives to save energy – Greenhouse Gas Reduction Scheme (GHGR) • CO2 abatement scheme – targets with penalties – Solar feed-in tariff (was gross – now net) • Other States – Solar feed-in tariffs – Others? Electric Power Consulting Pty Ltd 13 Energy Environmental Objectives • Resource Sustainability – How many years can we keep up our current use of resources before they run out? • Reduced Carbon Emissions – How many tonnes of CO2 emissions/year can be saved? • National Energy Independence – Can we sustain our energy needs without undue dependence on overseas supplies? Electric Power Consulting Pty Ltd 14 7
  • 8.
    Australian Fuel Sustainability Proven Reserves (approximate) Fuel At current  At Australian  production rates usage rates Brown Coal 1,000 years 1,000 years Black Coal 100 years 240 years Natural Gas 72 years 112 years Electric Power Consulting Pty Ltd 15 Carbon Intensity Tonnes of  Fuel CO2 /MWh  Brown Coal 1.4  Black Coal 0.9 Natural Gas Open Cycle Gas  0.65 Turbine Natural Gas Combined Cycle  0.4 Gas Turbine Hydro 0 Wind 0 Solar PV 0 Electric Power Consulting Pty Ltd 16 8
  • 9.
    Construction Cost $ Capital  Tonnes of  Fuel Construction  CO2 /MWh  Cost/MW Brown Coal 1.4  High Black Coal 0.9 High Natural Gas Open Cycle Gas  0.65 Low Turbine Natural Gas Combined Cycle  0.4 Medium Gas Turbine Extremely  Hydro 0 high Wind 0 High Solar PV 0 Very high Electric Power Consulting Pty Ltd 17 Dispatch $ Capital  Dispatch  Tonnes of  Fuel Construction  Capable CO2 /MWh  Cost/MW Brown Coal 1.4  High Yes Black Coal 0.9 High Yes Natural Gas Open Cycle Gas  0.65 Low Yes Turbine Natural Gas Combined Cycle  0.4 Medium Yes Gas Turbine Extremely  Hydro 0 Yes high Wind 0 High No Solar PV 0 Very high No Electric Power Consulting Pty Ltd 18 9
  • 10.
    Ability to RapidlyChange Output $ Capital  Dispatch  Ability to Rapidly Tonnes of  Fuel Construction  Capable Change Output  CO2 /MWh  Cost/MW Brown Coal 1.4  High Yes No Black Coal 0.9 High Yes No Natural Gas Open Cycle Gas  0.65 Low Yes Yes Turbine Natural Gas Combined Cycle  0.4 Medium Yes Moderate Gas Turbine Extremely  Hydro 0 Yes Yes high Wind 0 High No Nil Solar PV 0 Very high No Nil Electric Power Consulting Pty Ltd 19 Wind • Every 100MW of wind generation requires about 90 MW of conventional generation for backup • All wind generation needs a “dancing partner” • Wind is only financially viable with LRET • Will most likely be the main method of reaching the 20% renewable target for 2020 Electric Power Consulting Pty Ltd 20 10
  • 11.
    Solar Photovoltaic • Lends itself to distributed use at the domestic level • At 60 c/kWh and other green scheme subsidies it becomes attractive to customers • Is causing network stress Electric Power Consulting Pty Ltd 21 Embedded Generation Issues • Benefits  Negatives ◦ Voltage rise – Reduce network losses ◦ Cold load pick up – Delay augmentations? ◦ Dual power flow analysis – Voltage support? ◦ Some network – Green kWhs? augmentations required 11
  • 12.
    Modeled Conventional Dispatch ElectricPower Consulting Pty Ltd 23 Modeled Small Wind Electric Power Consulting Pty Ltd 24 12
  • 13.
    Modeled Large ScaleWind 13% Wind Electric Power Consulting Pty Ltd 25 SA Wind Electric Power Consulting Pty Ltd 26 13
  • 14.
    Modeled Large ScaleWind Constant Load – Dancing Partner 70% of 0.65 Tonnes CO2/MWH OCG= 0.45 Tonnes CO2/MWH Compare with 0.4 Tonnes CO2/MWH for CCG 30% Wind Electric Power Consulting Pty Ltd 27 CO2 Emissions + > Wind OCG CCG Electric Power Consulting Pty Ltd 28 14
  • 15.
    AEMO Data Carbon Tax Electric Power Consulting Pty Ltd 29 Conclusions • Renewables are only viable with government legislated green schemes • Wind and solar PV generation require large scale conventional “backup” power generation – dancing partners • Economics will drive much of the “back up” generation to be open cycle gas: – Capital cost – Higher CO2 producing plant Electric Power Consulting Pty Ltd 30 15
  • 16.
    Conclusions • The current policy settings are increasing the use of natural gas – reducing Australia’s sustainability in terms of energy reserves • Greenhouse gas savings are coming mainly from: – the switch from coal to natural gas – Less energy use due to high energy prices and price elasticity • Wind and solar PV in their present form are making little or no direct contribution to CO2 savings • New energy storage breakthroughs are required to make renewables viable Electric Power Consulting Pty Ltd 31 Important Issues • Increased focus needed on: – end use energy efficiency – Using less electricity – electricity network losses • Research – energy storage • Change of emphasis from: – “feel good” green schemes to policies that have some solid engineering logic • Electricity Network costs – getting away from feast and famine capital investments – improved performance of regulators – taking a longer term view Electric Power Consulting Pty Ltd 32 16
  • 17.