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Energy & GHG

Mar 22, 2017

A proposal for a National Electricity Plan

We need to respond to Australia’s electricity crisis with a comprehensive National Electricity Plan argues guest writer Dr Garry Glazebrook

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The cost of large-scale battery storage is declining rapidly (source: IEA, Tracking Clean Energy Progress 2016)

Guest writer Dr Garry Glazebrook continues his series on projects that could be funded by his proposed Building Australia Fund:

Australia faces something of a “perfect electrical storm”, with rising prices, increasing carbon emissions and falling reliability.  This has its genesis in:

  • The “gaming” of the national electricity market, creating extremely high spot prices
  • The debacle over carbon pricing
  • The Federal Government’s attacks on renewable energy
  • Unilateral decisions by private energy companies, for example to close down Leigh Creek and Hazelwood power stations
  • Extreme weather events, linked to climate change. 

In response to the growing crisis, South Australia released a $550m electricity plan earlier this month. This takes back partial control of its electricity grid, invests in batteries, gas fired power plants and diesel generators to reduce the risk of more blackouts, and proposes an interconnector between SA and NSW.

One day later the Prime Minister announced a feasibility study into a $2 billion expansion of the Snowy Hydro Scheme, aimed at increasing its peak generating capacity by 2,000 megawatts using pumped storage.

A national plan

Australia has some of the most emissions-intensive electricity in the world; our emissions are amongst the world’s highest and are actually rising. Many of our coal-fired power stations are now reaching the end of their economic lives.

The initiatives announced by the SA Premier and the Prime Minister are encouraging developments, but they don’t make a comprehensive, national plan. There are now calls from many quarters for such a plan. What should be its key elements?

First, we need a rapid ramp-up of generation from renewables. Fortunately, we have some of the best wind, solar, geothermal, wave power and other renewable potential in the world, and the costs of renewable energy are continuing to fall.

Second, we need to add storage i.e. pumped hydro, batteries, ultra capacitors, liquid salt, and other technologies. This needs to occur at the generation end as well as at the consumer end, to enable both supply and demand to adjust in real time. The cost of battery storage is also falling rapidly (see exhibit).

Third, we need more inter-connectors, including:

  • New links between South Australia, NSW and Queensland, to increase resilience in the grid, and open up solar and geothermal power along the inter-connector routes.
  • Strengthening of the SA – Victorian inter-connector, which will open up more wind power.
  • Strengthening the Bass Strait inter-connector, to take advantage of pumped hydro storage potential in Tasmania.
  • In the longer term, an inter-connector across the Great Australian Bight to link WA into the National Grid. It would open up some of the best wind resources in the country, as well as wave power, solar power and pumped storage potential around the Bight. The latter is already proposed for a trial plant in SA. Linking WA to the national grid will also take advantage of time zone differences – WA would be developing significant solar power just as it is most needed in the East Coast.

Fourth, we need a plan for the phased retirement of coal-fired power stations, including economic stimulus for the Latrobe Valley, Hunter Valley, Lithgow and Central Queensland regions.

Fifth, we will eventually need to phase out gas-fired electricity as well. Gas is a premium fuel for heavy industry and source of hydrocarbons for the petrochemical industry.  However gas fired electricity will be needed in the short term while the other strategies are developed.

Sixth, we need a “smart grid”, which will link multiple sources, stores and consumers of electricity, enabling fluctuating supply and demand to be managed much more effectively.

Global developments

Renewables accounted for 23% of global electricity production in 2015, and their share is rising as investment moves away from fossil fuels.

Many countries are also investing in long-range high voltage DC transmission lines to link cities with renewable energy sources. For example:

  • China began building HVDC lines in 2010. The most recent is the 3,400 km Changji – Guquan interconnector, which will carry 12,000 MW (half of Spain’s average power use).
  • India is also building such links, for example the 1,700 km, 6,000 MW line from hydroelectric power stations in Assam to Uttar Pradesh.
  • In the US, Oklahoma is building a 1,100 km, ultra-high voltage (600,000 V) line to feed wind power into the Tennessee Valley Authority’s grid.
  • The Australian Electricity Market Operator has identified the need for more inter-connectors in Australia, specifically links between SA, NSW, Queensland, Victoria and Tasmania. 

Implementation

How could we implement such a plan?

Logically, electricity generation can be left to the private sector, given that in the future there will be hundreds of large-scale renewable projects and millions of individual residents and commercial premises with their own solar PV installations.

However governments should ideally ultimately own and control the National Electricity Grid, which will link all of this together. In the short term governments should:

  • Build the critical missing inter-connectors, and major storage solutions like the Snowy scheme and SA’s battery farm. The proposed Building Australia Fund could help finance this, with an estimated investment of $10 billion over fifteen years.
  • Continue incentives for research into renewables, so that the cheapest mix of sources can be utilized.
  • Support individual customers to invest in local storage solutions. This will allow the community to re-gain control over pricing, which is currently manipulated by a small number of players in the market.
  • Legislate a simple but effective carbon price. This could start low, e.g. $5/tonne of CO2, but steadily ramp up to perhaps $20/tonne by 2030, sending a clear signal to invest in renewables and to start closing down coal-fired and later, gas-fired power, an approach actually supported by industry. The proceeds from such a tax could either be redistributed to individuals on a simple per-capita basis (e.g. as proposed by James Hansen in the US) and/or could be allocated to the Building Australia Fund to help pay for the investments in inter-connectors, renewables and storage solutions.

One thing is abundantly clear – our current electricity policy is a disaster in terms of price, emissions and reliability. A new approach is definitely needed, but one which can take advantage of the many technological developments currently available and in the pipeline.

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10 thoughts on “A proposal for a National Electricity Plan

  1. david edmonds

    At the moment I also call for the government ownership of the “poles and wires” with full structural separation with regards to generation. However, there may be a half way house if this is too difficult. I call this Appropriate Incorporation and generalise it to all fixed capital monopolies. For the grid we want a single national structure responsive to the people – so we design an incorporation regime that will tend to generate this structure. First structural separation will be mandatory. Second firms owning parts of the grid will be immune form competition legislation, let them monopolise. Third ownership in private companies will be restricted to residents. Finally the big one, boards in firms owning the grid and other firms owning parts of grid owning firms will be incorporated on the basis of one vote per shareholder not one vote per share. The hope being, that given that the constituency of the board of the monopolised firm would be little different to that of parliament, similar policy would prevail, and other firms divest. This, hanging as it does between Labor and the Liberals may attract the support of the Xenophons of this world and actually be doable. I would be pleased to discuss this with anyone and can be reached at david.edmonds@bigpond.com

  2. Mick

    A great item and plan. DC would certainly cut back on the energy losses we have through AC transmission, but I’m not aware of the technology employed in converting back to AC at the user end. How efficient is that system (and what is it)?
    Any national system should be 100% government owned and run. That may come with inherent problems, but nowhere near the problems (and costs) we would have if it got into the hands of corporations (market operators).
    If, over the last 12 years, our pollies had put as much (personal) energy into developing renewable energy as they did in impeding such development, we would not be where we are now.
    The ambush of Josh Frydenberg in the SA garage, plus subsequent thought bubbles from various pollies, has lead to the creation of this 45 second You Tube toonimotion (which is further evidence that cartoonists can’t sing , , , and nor should they).
    https://youtu.be/BXrtvM8zI9o
    Cheers
    Mick

    1. garry glazebrook

      Thanks Mick,
      Agree with your comments, thanks for the link,

      Cheers

      Garry Glazebrook

    2. Roger Clifton

      Mick says, “If our pollies had put as much personal energy into developing renewable energy as they did in impeding such development, we would not be where we are now”.

      That is unjust. If SA is indeed a community trying to protext the Greenhouse, Jay Weatherill put plenty of effort into providing them with non-carbon power. But a bunch of latter-day Luddites shouted down his nuclear proposal. With no emissions at all, a nuke would have backed up the wind generators and provided them with frequency stability.

      Once he was shouted down, Jay Weatherill turned to providing wind with a fossil gas backup. In the recent confrontation, the only insult that the Federal Minister for Energy could level was that it had taken him so long to provide backup to a system that had reached the unstable level of 40% wind. (In a maximum wind-generated system, 60% of the power bill is generated by fossil backup).

      Yes, we are in a mess, a mess of ignorant opinion. It would help if greenhouse-mindful cartoonists instead ridiculed the latter-day Luddites that obstructed a venture into new-fangled nuclear, preferring that we be stuck with fossil-backed power. (“It is after all, natural gas”, in the balloon.)

      1. Mick

        Hi Roger, maybe I should have been more specific in my post.
        I was referring to federal pollies, in the main, as impeding rapid development and sensible deployment of renewable energy. I applaud the actions and words of Jay in that SA garage. He did a great job on Josh. I also applaud his stated actions in attempting to secure SAs power supply in the future. In particular, I applaud his leaning towards keeping as much as possible under government control. Privatisation is disastrous (IMHO).
        I’m not convinced of the wisdom at venturing into nuclear power at this stage (2017) as, from what I’ve heard, it takes about 15 years from start to finish to get one of those online. Renewable energy technology could be highly advanced and deployed in 15 years, unless pollies with different agendas impeded such progress.
        I’m not knocking nuclear power. I’m cautious of it because of past major accidents, but I would guess any new plant would have a majority of those old probs sorted these days. If I come across any greenhouse-mindful cartoonists, I’ll pass on your fine suggestion.
        Regardless of which combination is the right one, the main problem remains with indecisive pollies (federal) who wander from one meeting to another, from one election to the next, all with no effective or substantial action, just thought bubbles.
        Ref my cartoon . . . https://cartoonmick.wordpress.com/editorial-political/#jp-carousel-205
        Cheers
        Mick

  3. Jacob HSR

    Thanks for mentioning the UHVDC transmission lines in China and India!

    I have been saying for many months that AUS needs a UHVDC transmission line from WA to NSW (via SA). The transmission losses are only 9% per 3000 km. The sun sets in Perth probably 2 hours after Sydney. It makes perfect sense – way more sense than building 12 submarines in SA.

    1. garry glazebrook

      Indeed!
      Cheers

      Garry Glazebrook

  4. Peter Logan

    Geothermal and wave energy: not intermittent but much cheaper than nuclear. I just said this in case our politicans are listening. Oh no, they’re attacking each other again and sticking to talking notes for the day while we are desperate for investment certainty.
    Also, geothermal and wave generators are cheap to decommission unlike nuclear reactors, coal mines and politicians.

    1. garry glazebrook

      Yes, potentially very cheap if they can be proved up and also if HVDC links pass nearby.

      I think Nuclear is not only highly capital intensive but risky, and un-necessary given our renewable resources.

  5. Roger Clifton

    The list of urgencies should include the removal of prohibition against nuclear to begin weaning our addiction to gas. Yes, private industry can do it, including “finding the cheapest mix” by joining the breakthrough into mass-produced nuclear.

    The short-term thrust into wind-backed-by gas etc will significantly increase the amount of gas that we burn and leak. Without the backup, there is no baseload power to be touted as “renewable”. Apart from the PM’s pipedream of 2 GW pumped hydro, there is no CO2-free baseload on the scale required.

    Currently Australians use about 1 kW of electricity, totalling about 25 GW. Phasing out heating oil, transport fuel, coke furnacing, cement clinkering, will raise that need to 100 GW or so. The only possibility of stored energy on this scale is a fueled-up nuke with three years of unbroken heavy duty power supply ahead.

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