A bright shine in small solar fixes
Matthew Wright's criticisms of the Grattan Institute report ‘No easy choices: which way to Australia's energy future’, are either incorrect or miss the point of our analysis (Blind spots on our solar future, February 8). Individuals such as Wright may have good reasons to support or oppose particular technologies. However, based on a detailed assessment, our overall conclusion is that there is no obvious winner or loser among the range of low-emission options that Australia has for its electricity future. We need to keep them all in play to deliver a low-emission future at lowest cost. There is no easy choice or quick fix.
In the report, we identified the major cost reductions in solar PV that have been occurring over the last few years, as developers respond to government programs around the world, including feed-in tariffs. There is some way to go before rooftop solar PV is competitive with a number of other low-emission alternatives. Battery storage would also appear to be some way from being commercially viable, and we did not assess this aspect in any further detail.
The extent to which solar panels on home rooftops substitute for more than electricity at the wholesale level is complex, unless the householder disconnects the home from the electricity grid. Otherwise, even if the home system generates a substantial proportion of the usage, the distribution company still incurs the cost of supplying and maintaining the poles and wires, the meter still has to be read and the retailer will still need to send an invoice and collect the payments.
The fact that current charging regimes do not always reflect these costs does not change the underlying economics, which are what matters if we are to reduce emissions at least cost to the community in the long run. Domestic solar PV's real value comes when it is able to reduce the capital investment in the grid needed to meet peak demand, and solar can sometimes do this. This issue was specifically explored by Helen Morrow of Grattan Institute in her December article in Climate Spectator (The right way to value solar, December 21).
Whether gas prices increase at the same time that solar costs reduce, depends on one's perspective. Domestic gas prices on the east coast of Australia may well move upwards towards export parity as major LNG projects are commissioned. This was highlighted during the recent Climate Spectator Webinar on the future of gas, in which I participated. However, global gas prices have fallen dramatically in the last few months, to the extent that the US may even become an exporter. It is by no means clear how gas prices will evolve in the coming years, and the environmental challenges of both coal seam gas and shale gas will influence the outcome.
The potential for solar thermal power to be combined with heat storage was directly recognised in our report. Solar thermal power, with storage or combined with gas, is a very promising development, although it is still early days. Our report identifies both the potential and the challenges for solar thermal power, including the fact that solar thermal projects have been struggling to achieve commercial close in recent times, partly due to the cost reductions achieved by solar PV.
Any judgement of the success of feed-in tariffs depends on the objective. If the objective is to deliver a lot of solar PV systems, then feed-in tariffs have done so, and may be more effective than other renewable energy policies such as Renewable Energy Targets. However, if the objective is to address climate change at the lowest cost, then the picture looks very different. The cost of emissions reduction delivered by feed-in tariffs is very high as estimated by the Productivity Commission. This comes back to a central point in our report: government support for low-emission technologies should have cost reduction and overcoming market barriers as its central rationale, and not just deployment of a favourite technology.
CCS, geothermal and nuclear energy are dismissed somewhat cursorily in Mr Wright's article. When faced with the challenge of decarbonising our electricity system in less than 40 years, our report concludes that it is highly unlikely that this can be achieved at affordable cost with wind and solar, or even with any narrow subset of the technology options available today. The assessments in the government's economic modelling do include a substantial element of geothermal and CCS. Our report has not endorsed these model projections. We simply make the point that, from today's perspective, generating most of our electricity from these two technologies within a few decades is equally unlikely.
Finally, our report very clearly lays out the economic arguments for and against nuclear. Again, there is no clear answer for reasons that the report fully explores. And so, we conclude that it is unwise to dismiss or pursue nuclear without allowing for both the possibility that it will be very expensive, and the possibility that it will be relatively cheap.
In summary, the Grattan Institute assessed a range of technologies against an over-arching public policy objective and concluded that Australia will struggle to meet its carbon emissions targets with reasonable electricity prices unless governments act now to reduce costs in the future. There is no technology bias or preferred outcome. Indeed, the central argument is that we are faced with great uncertainty, and should neither pick the winner nor eliminate the loser. The best strategy is to keep our options open.
Tony Wood is Energy Program Director at the Grattan Institute.
Comments on this article
Still hopeful ...
For sure, I would like PV to time exactly with the evening peaks in the eastern states. I know that isn't possible, however with a little bit of storage who knows ? The other possibility is that we link our grid to WA and use their PV in the evenings. I am sure the upfront cost and line losses will put a damper on that - perhaps a guest author for Spectator could argue one way or another its feasibility. It would certainly boost FiT's in Perth. I see the other issue about a glut of SRECs from PV, but also that energy retailers are snapping them up because they can't divest themselves of coal energy quickly enough to avoid their MRET costs. This too will diminish over time. The other unmentionable in the case of NSW is that PV is now becoming very mainstream, accepted, and cheaper simply because of PV volume. In spite of the chaos, PV in NSW is still very strong. The evidence is in our own street, i hope it is true for yours.
Re optimistic
I didn't mean the FiT had set back PV, it has set back other renewables. It was popular because people could make money from it, pure and simple. If you read some of the posts in this blog some of these same people are anti-carbon tax so they didn't install their PV for a green future but only for their own future. The FiT combined with RECS rebates were the perfect storm and ended up trashing the RET now known as LRET. It's not whether the FiT only lasts until 2016 or not, the damage has been done. Countries such as Germany have a balanced FiT that encompasses renewables other than PV. This supports both small scale and large scale generation. The LRET alone won't do it. FiTs alone won't do it. A carbon price alone won't do it. There needs to be sensible state and federal policies that combines all of these and other incentives to get renewables going again. As for wind, yes it does play a part and it does work at night but the arguing here was over the MOE for PV and my position is it has no MOE efect in the early evening.
Still optimistic ...
David Osmond has shared good news with the likelihood that Wind is generating excess at night when all PV has gone to sleep. Clearly a mix of renewables is needed. I take it as a sign that high-maintenance fossil fuels are gradually being shut out by MOE. This would also be welcome to those that are contemplating additional uses for energy late at night. I can't feel Blue's bitterness that the generous NSW FiT has set back PV several years. That tarrif is merely until 2016 and only accounts for about 300 MW when it was much more expensive to install. It is a fairly paltry generation cost when considering how popular it has now become even with very meagre FiT's. The incoming federal system does foster more PV and other renewables, but even without the CEFC equalling fossil subsidies to go only to renewables, the investment community would still think renewables a good idea.
Re Sure All Of The Modelling and Maths is complex
And your point is? All of us should go solar PV with a feed in tariff of 65c? We should turn the lights out after 5pm because we don't need big business lossy transmission from a central power station? Are you the same person who said "The Green Labour Hollowmen may call it a clean energy legislation but it is a carbon tax with exemptions/exclusions and compensation." This is all quite contradictory stuff. You've obviously done the right thing by yourself, taking advantage of recs and tariffs, as have many other PV owners but have you indeed done the right thing by everyone else? Don't forget the solar PV experiment has smashed the RET. You still need to power your house at night, ergo you need those lossy transmissions lines to get you power from some inefficient power station a long long way away from your home. As long as you're still plugged into the grid I wouldn't be complaing about it. Perhaps you could add some redflow batteries to your system if you believe otherwise. Without the labor feed in tariff and without the labor recs rebate it is unlikely there would have been a PV experiment. For all the installed capacity PV is producing a tiny fraction of the country's electricity energy requirements. The maths is quite simple, nighttime equals no power from solar PV. My point is there's been an enormous over emphasis on solar pv and it has set back renewable energy in general by years.
Sure All Of The Modelling and Maths is complex
But my rooftop PV generated 4600 kwh of power in the last 12 months. Most of this is generated between 10am and 3pm each day. Regardless of MOE. So this is all peak replacement power in terms of my retailer (we use about 70% of this power and feed in about 30%). At 27cents per kwh charge and 65cents feedin tariff, gets close to $1800 "savings". At $16K install, this is an 11% tax free return on the investment. Depending on your marginal tax rate this can be an effective 16% return. Payback in 6 or 7 years. When power charges get to 40cents per kwh, the returns ignoring high feed in tariffs will be 11/12% tax free.
Guess one of the questions in this area is .."Is small business better than big business in PV. Is distributed with virtually no transmission loss better than large scale remote?"
What is even more apparent is that hydro needs to be put back into the mix. The sooner we take massive Labour built desal plants off the grid and replace then with large water capture and hydro the better.
Merit Order Effect
Mathew - But you said so yourself. To quote:
Submitted by Matthew Wright on Wed, 2011-12-21 10:45.
Helen,
What about the value of the correlation between Solar Photovoltaic generation times and those times of high power demand.
This is called the Merit Order Effect.
End quote.
This is exactly what I am saying. There is NO merit order effect for solar PV in the late afternoon and early evening at such time when it would be of most benefit to residential consumers.
Time of day production
Wind often does peak in the late evening, corresponding well with demand peaks. However it usually continues to generate too much during the rest of the night, and not enough during the morning and the middle of the day. Solar PV on the other hand, doesn't generate at night, and peaks around midday, well ahead of the demand peak.
If you have an even mixture of wind and solar PV, the average production profiles correlate quite nicely with demand. That's why it's good to continue to support both technologies, plus of course solar thermal with storage for base load or load following capabilities.
RE:Merit Order Effect (MOE) Academic Papers
Blue Planet,
Again MOE has nothing to do with a single peak event. That can still be provisioned and the cost passed through. The point is that MOE suppresses most events (85%) and passes through massive savings hundreds of millions of dollars if not the low billions to consumers.
MOE has nothing to do with capacity. Today capacity is supplied by spinning everything up, hydro dams (when available) gas peakers etc.
MOE means that they only get spun up 15% of the time. And we pocket the savings the other 85% of the time. Some existing players do their $$$ as they bet on the wrong solution. Other gas peakers will convert to kerosene storage tanks the size a petrol station has and new ones will be built to this spec.
Meanwhile storage costs will drop, and in a few years we'll be able to afford battery storage at that point Solar+batteries can displace capacity as well saving consumers even more money. But at this stage MOE wholesale price suppression correlating 85% of the time will save us a billion or two. NB (Chemical (LiOn) Batteries to halve in price by 2015/16 according to various projections industry and academic.
Merit Order Effect (MOE) Academic Papers
We're mixing apples and oranges here. I've looked at this paper "Working Paper Sustainability and Innovation No. S 7/2007" from http://www.fraunhofer.de/ It shows time of day MOE for EEG (Erneuerbare-Energien-Gesetz) or german renewable energy act generated power. Figure 3 shows a peak occuring between 7 and 10pm. The MOE used in this paper relates to wind not solar PV. This agrees with the comment I made on this paper http://www.ergo.ee.unsw.edu.au/value%20of%20PV%20in%20summer%20peaks.pdf That is to say solar PV has little influence on the MOE after the sun goes down which is the time of day most residential consumption takes place, that is to say in the early evening. Wind and solar PV are like apples and oranges. Let's not confuse the two.
Truenergy are charging 31cents per kilowatt hour single rate NSW
That's right Truenergy are charging the same for electricity on single rate metering, same as what German's pay for their electricity.
If you jump to Time of Use the price for daytime power (when most households are consuming) jumps to 44cents per kilowatt hour well above what Germans are paying.
http://www.truenergy.com.au
put in any address in Greater Sydney and you'll see the quotation.
Oh Dear response = I'm an astroturfer and losing the argument.
Oh Dear
This is your best effort so far.
Stop botherng me, I awaiting a call from Santos and Energex.
(By the way, what does your mummy say when you tell lies all the time?)
Germans pay half as much for electricity as Aussies
And they get significant renewable energy bundled
A country that has 20% renewables 10 years ahead of schedule rising to 30% renewables in 2020 and 45% in 2030.
My best guess is that the German Greens' policy of 100% renewable by 2030 will be what will play out in reality.
As part of the 100% renewable energy Germany by 2050 they will no longer be importing and burning gas. Already since 2005 gas demand has dropped in Germany.
Richard energy.eu is not a good source drink your own koolaid on this one. Try the official European Union statistics for a better source. 0.253 * *1.23 = 0.31cents per kilowatt hour
versus 31cents per kilowatt hour (TruEnergy single-rate servicing greater Sydney)
http://epp.eurostat.ec.europa.eu/statistics_explained/images/0/0f/Half-yearly_electricity_and_gas_prices%2C_2011s1_%28EUR_per_kWh%29.png
NSW consumer 8000kWh * 0.31 = $2489
German consumer 3400kWh * 0.31 = $1051
Germany
Seeing you did not read this I will repeat:And there is even a proper reference, not a brochure from an interest group.
"Obviously Wright has never been to Germany, nor probably England. I have, regularly.These countries do not heat their homes by electricity. This will come as a shock as well, as most houses were not built in the last 20 years.
Facts:
Discrete model: space heating type %
Oil Oil-fired heating system 0.345
Gas Gas-fired heating system 0.481
District District heating system 0.119
Electric Electric heating system 0.041
Solid Solid fuel heating system 0.014
Oil Annual expenditures on fuel oil (in thousand Euros) Per Household
1.024 .
Gas Annual expenditures on gas (in thousand Euros) Per Household
1.030 0."
Please add that to your electricity bill, please.
Mate you facts are way off, and that is putting it politely.
Retail Australia: 22 cents?KWH
Germany: 34 cents?KWH
Delusional ???????
http://www.webmeets.com/files/papers/EAERE/2011/528/Carraro_Braun_EAERE_2011.pdf
Germany gets half its electricity from Renewables
And again the Astroturfers try to deflect from the main contention here. That the German's pay half as much for their electricity than Australian's do.
The Germans have a better system, and one which is supporting a cost effective move to renewable energy decarbonising their economy.
For the record I completed studies at Swinburne in Hawthorn. Search for Swinburne and then bite toungue.
So what are your relevant qualifcations. Funny that I didn't get your email that you claim to have sent.
Oh dear
I have been educated at two leading Universities, you have not, even at one.
I am entitled to question what is published,as is anyone who reads here, and I provide references.Your premise that someone has to be qualified to reply to your twadle is offensive to all.
All you have to do is reply with properly researched and referenced materials,easy?Or in your case not.
You resort to calling people names if they do not agree with your point of view. Good on you, people notice.
You make a fool of your self.
You are not university educated and act like a journo.That is fine.You do not present facts, and you ignore the truth. So be it.
As long as we know
Anyway please do not move to Europe, you provide too much entertainment.
By dear, must phone Santos for instructions.
RE: Expertise to comment - Beyond Zero Emissions has it.
Richard,
I have made it clear that BZE's reports (fully referenced) are released and on the public record and written by a team of people who have worked running the nation's energy infrastrucutre. Whereas you are not from a relevant background to comment on these matters.
All you do is throw insults. Please list the credentials of your team.(if you are not just a lone individual) We have Chem, Mech, Enviro, Computer, Enviro engineers. They have been educated at leading Australian universities including Melbourne, UQ, RMIT, UNSW, RMIT and so on. A few of them have worked for the biggest energy companies in the world (Coal, Oil, Gas).
Until you do lets be clear, Germans pay half as much as Australians on their electricity bills, and they get 20% renewable energy ten years ahead of plan as part of that deal.
Oh dear
The astroturfer gives it a rest.
The personal insults mean nothing, but show you for what you are, very immature, or grossly incompetent.I would think your backers should be made aware of your activities, as you do your cause a lot of harm. Hope they do not pay you too much.
I personnally forwarded you my credentials and background etc, and you make such a comment.
Your dishonesty shows through,brighter than a chinese made LED.
Sort of regards
Germans enjoy half price annual electricity versus Australians
I made it clear that Germans get half price electricity versus Australian's.
Richard, I think you have failed to read what I wrote. And that was intentional as you are a seasoned astroturfer as opposed to someone legitimately involved in rational debate.
It's less relevant to compare heating and energy because it takes significantly more energy to heat a German household where temperatures are often well below zero for weeks than a Victorian household.
German Winter
Mathew you advise that you have been to Germany.(really, it gets really cold, and most houses are really old) You also state that someone in Victoria would have twice the energy bill of the average German Household.
DId you actually read what I posted. Add that to the average German Power Bill.Oil/gas plus electricity.Add in petrol/diesel prices.
In addition, a winter in Germany does not mirror one in Victoria.Go there one day.
Oh Dear
As before, rest my case.
Gas bills/oil/electricity bills do not get added together. Wow.Tell the resident of the house that. Must use that.
Mate you should work for a politician.
"While German retail prices are not expected to rise very much at all over the next few years."
Are you in lala land, please reference properly.
RE: Germany pay half as much as Aussies for their electricity
Been to Germany a few times, great place. If I could get an EU citizenship and if Australia wasn't such a basket case with its head in a coal pit I'd more than happily relocate.
As for the difference in electricity bills the gap is about to widen. AEMC says that from 2012-2015 Australian electricity prices (retail) will rise 30%) While German retail prices are not expected to rise very much at all over the next few years.
As for heating, I'm in Victoria and my neighbours still heat with legacy gas, just as the Germans do. If they had to heat their home through a German winter then they'd be up for more than twice the energy bill of the average german household.
Gas bills and electricity bills do not get added together. Even when you engage the same retailer for gas and electricity they bill seperately.
In anycase the trend in Germany is to get off Russian gas and go renewable. So they're probably at their highest gas use today and both gas and coal (along with Nuclear will reduce over the coming 10-20years to zero. (Ahead of the 2050 100% renewable target)
Most of Germany uses What?
A bit of reality.
Obviously Wright has never been to Germany, nor probably England. I have, regularly.These countries do not heat their homes by electricity. This will come as a shock as well, as most houses were not built in the last 20 years.
Facts:
Discrete model: space heating type %
Oil Oil-fired heating system 0.345
Gas Gas-fired heating system 0.481
District District heating system 0.119
Electric Electric heating system 0.041
Solid Solid fuel heating system 0.014
Oil Annual expenditures on fuel oil (in thousand Euros) Per Household
1.024 .
Gas Annual expenditures on gas (in thousand Euros) Per Household
1.030 0.
Please add that to your electricity bill, please.
Mate you facts are way off, and that is putiing it politely.
http://www.webmeets.com/files/papers/EAERE/2011/528/Carraro_Braun_EAERE_2011.pdf
RE: Germans are paying half for electricity
J Cooper: Sorry - electricity and energy are different things, please read up before you comment again. I was talking electricity.
Germans are paying half for electricity. It's a different story for space heating, where the people on gas are paying the same as Victorians for their total energy.
Mind you with International price parity coming on the eastern seaboard, Victorian's will be paying more than Germans for electricity and total energy.
Most of the rest of Germany uses CHP plant
If you cared to research facts rather than "most of the rest of Germany uses CHP" you'd find that its not MOST, its actually only 14% http://www.iea.org/g8/chp/profiles/germany.pdf
In Germany 6% of heating comes from electricity (maybe 1% from solar and wind) vs 29% use oil for heating and 46% Gas -
http://www.messefrankfurt.com/frankfurt/en/media/technologyproduction/ish/frankfurt/aussteller-news/erdgas.html
Suddenly Germany is paying the same for their energy as Victoria rather than half .... your story is changing yet again.
RE: German households pay half for electricity versus Australia
Actually only 46% of German houses heat with gas heaters. And they pay about the same as Victorian's for total energy gas + electricity.
Most of the rest of Germany uses CHP plant and pays much less than Victorians for their heat.
It's cheaper to build a German high performance home. They knock off 30% (vs Australia) of the floor area add all the upgraded insulation, argon filled TRIPLE glazing and air seal. And there houses cost less than ours.
An Australian house would cost 2-3times as much to heat in Germany. So even though they're paying the same as a Victorian they're getting a very good deal.
RE: German households pay half for electricity versus Australia
Matthew, how can anyone be naive enough to compare the total average electricity bill in Au and Germany and conclude that Germans are better off? While ignoring the per kW price which is the only fair comparison (although still pretty pointless as its such a different natural resource mix).
Stop and consider how German houses get heated in winter? Predominately GAS boilers. ie Electicity is just one of their energy bills. To quote from your own referenced article "This is largely because the French heat with electricity, rather than with natural gas like the Germans"
http://www.thelocal.de/national/20120209-40643.html
And what about the more subtle one of the extra upfront costs of building energy efficient homes (double glazing etc). That is conveniently left out of these pointless comparisons.
insisting on the horse & cart
Why is it that a group of posters on this site are desperate not to do anything because things will need to change if we adopt a renewable economy? Is it vested interests, fear of change?
Truth is we will have to adopt a renewable economy as fossil fuels are too dangerous and soon will be more expensive than renewables (think no further than the cost of oil).
Europe has made the decision and is doing it. Sure there will be blind alleys and some investments will be overtaken, but better to invest in the future than in assets that will be stranded with certainty in the near future. This is why coal fired plants are not being built in Europe.
China is on the way, India starting out. Even the US is heading down the path (45GW wind is significant).
... and we have a bunch of people insisting on academic studies and looking for any means possible not to take action... in the country with the best solar and wind assets.
...it is barking mad.
Ted Trainer's views
Mark - Ted Trainer's views have been expressed on bnc previously in relation to the 2011 Report on Renewable Energy.
http://bravenewclimate.com/2011/08/09/ipcc-renewables-critique/
Here is his main point.
"I should make it clear that my comments do not cast doubt on the IPCC’s statements re: climate science. It is also my view that we should transition to full dependence on renewables as soon as possible…although this will not be possible in a consumer-capitalist society."
Is that the point that you are making ?
Another critique of the Grattan Institute report
Sorry this is turning into the longest goodbye since John Farnham, but an alternative critique of the Grattan Institute energy report, by Ted Trainer, has only just reached my attention. In a nutshell, "the Grattan Report fails to recognise the reasons why it is very unlikely that the world can run on renewable energy."
http://bravenewclimate.com/2012/02/14/grattan-report-2012-critique/
A question answered, a question posed
One more thing before I go. Matthew Wright asked "How do you think Japan is getting by with 51 out of 54 reactors turned off"
'Not very well' and 'by pushing CO2 emissions through the roof', that's how: http://thebreakthrough.org/blog/2012/02/new_data_japanese_fuel_imports.s...
Your point? Seriously, what are you on about? Because it sure as hell isn't zero carbon or zero emissions.