Power Stability in Australia

Background

The Liberal / National party coalition had been in power, in Australia, since 2013. Tony Abbott’s Views on energy policy cost him his job as Prime Minister in 2015 to Malcolm Turnbull and then caused Turnbull to lose the top job to Scott Morrison in August 2018. Abbott had a very clear vision of Australia remaining a low-cost energy country using the vast reserves of high-quality coal which the country has. Turnbull had almost the opposite view of the world wanting to transform Australia into a new low carbon high-tech economy. Scott Morrison emerged, almost like a character out of the BBC’s Yes Prime Minister, as the compromise candidate who sat in the middle and could heal a party after the philosophical wars between Abbott and Turnbull.

The problem is, no decisions have been made since August 2018 despite Morrison receiving an unexpected healthy victory at a national election in May 2019. Yes, he and Minister Angus Taylor have held lots of consultations – but no decisions.

The energy strategy has to work for everybody

What Australia needs from its leaders for long-term is a politically acceptable, economically viable and environmentally sustainable energy strategy. The energy strategy has to work. In the case of Australia this small population and huge distances the technology that makes a national grid is paramount. The National Grid needs to support about 90% of the population that live in about 10% of the country basically running down the east coast.

Projects RH is actively involved in renewable energy and supports a diversified generation system. This system needs to be able to withstand extremes of weather, technical breakdowns and unplanned events. The system needs to be cost-effective robust and available. Australians assume their power system will be there 99.99% of the time.

Australia needs a sustainable baseload capacity supplemented by wind and solar but with peaking from gas until the technology evolves. The renewable sector needs storage whether that be by the use of batteries and/or pump storage. There is no doubt it will grow as storage prices fall. Equally important, and not seen by the population, the system needs stability. Stability in the power industry means that the system needs to be able to cope with renewables entering and leaving the system. By world standards Australia has a large rooftop solar network which supports homes and commercial buildings. Whilst many may have battery storage, they call on the system when they need power and many seek to sell excess power. Equally, standalone solar and wind power generation systems generate when there is light or wind, they may have some storage. Generally, they rely on the rest of the system to supply their clients when they cannot supply.

Our legacy

What we have seen develop in Australia is a series of areas with high concentrations of smaller solar and wind systems which, when they generate clog, the power transmission lines and cause excess power in the system. They are often at the end of the transmission system. In the case of Australia, most of the power is generated by coal fired baseload power stations, the nature of which is they cannot be turned up and down easily. One of the great attractions of gas peaking and pump storage is that it is available when required with excess power generated on night, being able to be directed to batteries and pump storage.

At Projects RH we do not see the issue as Australia has too much renewable power, basically solar and wind, but rather that it is not distributed wisely and that appropriate local storage has not been developed. It is well-known that the issue in Australia is the early morning power drain. We believe in a sensible mix baseload power, peaking and batteries, and renewable power that this can be managed to provide system stability.

Having looked at renewable projects around the world, the system cannot allow wind or solar plants to be put wherever the entrepreneur decides without having consideration for the existing transmission grid, and the need to sell that power into the network.

We are going again return to what is needed in Australia. What Australia needs is a long-term stable energy policy which is broadly supported by the Liberal/National parties and the Labor Party, so that the inevitable change of government which occurs in the Australian democracy does not see energy policy dramatically changed and become a political football.

Energy policy needs to reflect the life of power generation assets which generally are 25 to 35 years. Energy policy does need to be reviewed and will change but the changes need to be incremental.

The lack of a national energy policy has resulted in no investment, other than by government, in baseload power since Shell and InterGen (840 MW) completed the Millmerran project in 2002. The government of Queensland built the Kogan Creek power project (750 MW) which was completed in 2007. The irony is, the third youngest power station in Australia is also in Queensland, it is Callide C (840 MW) and was built as a joint venture between Shell and the government of Queensland. This so, the youngest 2,340 MW of baseload power resides in Queensland. Then there is the proposal by the Commonwealth government to build a 1 GW coal-fired power station in Central Queensland. The strategic importance of this is that the ability of these units to provide stability to the east coast system is constrained by the interconnect between Queensland and New South Wales which runs effectively through the Millmerran power station.

This means that effectively Tasmania, Victoria, South Australia and New South Wales rely on the Snowy Hydro Scheme to provide stability to this system - the “National Battery” as it is called.

Our Future

Australia needs to get smart. It needs to distribute power generation and needs suitable transmission lines, with redundancy, that allow for the national network to function efficiently, benefit of solar and wind, and when required use gas-fired peaking.

Australia has a short-term and long-term need to get power stability. In the short term we can and should build more distributed renewable energy with battery storage close to users. In the long-term however we need to have a national energy strategy which produces baseload power. Australia has spent a lot of money to find that the country is not suitable for geothermal. The topography and weather patterns of Australia mean that power is not an option. this leaves us with a nuclear or new generation coal with emission sequestration as our baseload power source. A new coal-fired plant or a first commercial nuclear plant is 8 to 10 years away.

Conclusion

In the short term we need to get on with building new solar and wind projects such as Lockrose solar project proposed for South East Queensland. Such projects with battery storage can delay the pressure allowing time for new baseload to come on-line.

For massive investment in baseload power there needs to be a clear bipartisan national energy plan. For each of the Liberal/National parties and the Labor Party there needs to be an agreed recognition that there is a “middle way”.

The middle way has to give Australia reasonably priced electricity, which is sustainable and stable.

By Paul Raftery (Projects RH)