Shock of the new
It was a terrific idea: the NSW government hosted a summit of industry leaders on Friday to discuss the future of solar and other renewable energy sources. It was held in Newcastle – solar at the coal-face, so to speak. But it didn’t take long to get to the nub of the problem.
The government chose, as the opening keynote speaker, Dr Adi Paterson, the CEO of the Australian Nuclear Science and Technology Organisation, who was asked to give a basic overview of renewable energy technologies. It was a provocative choice to a 200-strong audience of mostly renewable energy experts, and he played to type.
Wind energy, he told them, was basically useless. Denmark had spent 40 years erecting wind turbines all over the place and they still only accounted for 20 per cent of its energy use, and the country had the highest energy emissions in Europe.
Marine energy, he said, was unreliable and “never there when you want it." And to illustrate the point he showed a picture of an early prototype that had sunk to the ocean floor.
Solar PV, Paterson said, was inefficient and it took up too much space. What’s more, “its electricity doesn’t move about nicely”, cost $40,000/kW and all the PV capacity in the world would only provide enough electricity for the island of Malta. New modular nuclear power stations, which can be dropped in at remote areas, however, were particularly exciting. You get the picture.
“That was fascinating,” said NSW Energy Minister Chris Hartcher. And the country’s biggest energy companies were equally effusive. “That presentation was fantastic,” said Tim Nelson, who acts as the principal point man between AGL Energy and the government on carbon issues.
Actually, much of it was bunkum.
Just for the record, data from the International Energy Agency shows that Denmark has cut its emissions per kWh by 40 per cent in the last two decades as wind replaced coal, and it now ranks 10th (not last) in the EU 27 on this criteria, and 14th in emissions per capita. Denmark is so delighted with its achievements it now aims to have wind supply 42 per cent of its energy by 2020.
Global wind capacity is predicted to rise ten-fold from its current level of around 200GW by 2030, and unless all those wind turbines succeed in knocking the earth off its orbit (watch this video to learn how), then tidal movements will remain predictable – right down to the centimeter and the minute – years in advance.
And wave energy machines will not be installed in lakes. Europe’s leading energy companies such as EDF, Siemens, Alstom and SSE are falling over each other trying buy up marine energy technology, which they think could eventually be as cheap as wind.
And, according to data from the IEA and the European Photovoltaic Industry Association, solar PV generated enough electricity in 2009 (about 24 terawatt hours) to power Malta (2.3TWh) more than 10 times over, not just once. The installed capacity of solar PV has more than doubled since then, so it might be generating enough to meet the electricity requirements of Greece. Global installed capacity is expected to increase four-fold in the next four years. Industry estimates put the cost of solar PV at $3,500-$5,000kW, and falling quickly – about 20 per cent for every doubling in capacity.
Paterson’s overview, like those of other presenters, might be laughed off as the predictably prejudicial stance of the pro-nuclear lobby – or, as one onlooker noted, “engineers of a certain age” – but it represents a deeper industry malaise. Several representatives from international organisations were still shaking their heads several hours after the presentation. “We went through this 15 years ago,” said one. “It beggars belief.”
Australia is hopelessly behind the rest of the developed world in key energy criteria – productivity, emissions, renewable power installation, demand management and energy efficiency. And many would argue it is because policy makers have relied on advice from those – like Paterson – who are so deeply attached to the concept of centralised energy and past technologies, instead of those who look to the future, who appreciate the potential of distributed energy, intermittent energy sources, and who – like the IEA – believe that the challenges of grid integration can be overcome.
Professor Ross Garnaut, among others, has noted the degree of “regulatory capture” in the energy industry in Australia. And two issues exacerbate the problem: one is the quality of the data, and the other is quality of industry culture.
Barack Obama has likened the clean energy revolution to the space race, and in one important aspect he is quite right. If you get your calculation out by just a degree or two when you launch a rocket to the moon, you will likely miss it by some distance. If you frame your energy policy around old data, you will likely end up with a similarly unintended result. And it doesn’t have to be very old to be very wrong.
The problems with solar PV – the issue that triggered this summit – illustrate this perfectly. Policy makers can’t keep up with the plunging costs, and neither can those who advise them. One notable example was provided by John Burgess, from the Australian Academy of Technological Sciences and Engineering, who presented a fascinating graph that used an “option value” approach that ranked technologies into categories that one might invest in now, maybe now, maybe later, possibly later, probably never and never.
This graph, a prominent feature of a detailed report evaluating new energy technology choices for Australia presented to Energy Minister Martin Ferguson last December, had solar PV straddling the boundary between “probably never invest” and “never invest”. Nuclear, incidentally, straddled the boundary between “invest now” and "maybe now."
It could be a useful graph, but here’s the problem: the solar assessment is based on the assumption that in 2040, solar PV will still cost twice as much as wind. That might have been the prevailing view in 2008, but it is now widely recognised that solar PV will match the cost of wind in this country within five years, not 30 or 40. In some countries, it is already matching the cost of fossil fuels.
The solar industry contends that such out-of-date data has coloured the conclusions of numerous reports, including that of the Productivity Commission and IPART, and their condemnation of green energy schemes. The head of the APVA, Muriel Watt, pointed this out on numerous occasions during the conference.
Culture is a more challenging problem. “We are used to doing things a certain way,” said Brian Spalding, a commissioner with the Australian Energy Markets Commission. “We don’t want to change the culture.”
But it will have to evolve – along with business models – as the industry grapples with how to cope with new technologies and regulatory changes designed to recognise the value of new energy sources, and the value of saving energy rather than simply trying to produce more of it.
Simon Smith, one of the leading thinkers from the Office of Environment and Heritage, put it nicely. He noted how the debate was often falsely framed around a choice of keeping the lights on or not. "We can move to a more grown up choice of how we manage demand and supply."
Spalding, to his credit, has been instrumental in gaining funding for the AEMC’s investigation into how to do this. It will include issues such as demand management, regulation of tariff structures, and split incentives. A discussion paper will be released in the next month or so.
Professor Michael Dureau, from the Warren Centre of Advanced Engineering, was another echoing the conservative view when he suggested grids could not cope with more than 20-25 per cent of intermittent power.
But rather than be influenced by those who think that change is too hard or too costly, perhaps Australia should look overseas for inspiration on what can be done. A recent IEA analysis on harnessing renewables noted that 17 per cent of the world’s energy would need to come from variable sources such as wind and solar by 2035. In some areas, the variable energy sources' contribution of up to 48 per cent (63 per cent in the case of Denmark) could be balanced.
“Variability needs not be an impediment to deployment,” IEA’s Richard Jones said. “As long as power systems and markets are properly configured so they can get the best use of their flexible resources, large shares of variable renewables are entirely feasible.”
The UK Department of Energy and Climate Change recently went further, completing a study which found that 65 per cent renewable penetration was technically feasible by 2030 (it stands at 3 per cent now).
The test case for this is likely to be Germany, which wants to double the contribution from its (relatively lousy) resources of solar and wind to 35 per cent by 2020. Dana, the country’s energy agency, said the challenge of incorporating these variable sources into the grid were enormous. But not only was it was confident it could be done, it believes that power cost hikes for householders arising from the disappearance of nuclear power, grid expansions and renewable subsidies can be limited to 20 per cent up to 2020.
The NSW government, or course, would do anything to keep its electricity price hikes to 20 per cent, perhaps even by introducing progressive renewable energy policies.
It’s first opportunity to do so is in solar PV, where, as discussed here, the rapid slump in costs offers it a unique opportunity to underwrite the growth of a new technology at no cost to the public purse.
Further rapid developments in technology are going to allow governments to look incredibly clever. The NSW government should be applauded for hosting this summit, and minister Hartcher and parliamentary secretary for renewables Rob Stokes for staying the whole day. Hopefully, they got a sense that their interests will be best served listening to those with a vision for the future, rather those attached to the relics of the past.
Comments on this article
Torresol link
I too just checked out the Torresol link, yes it is large at 185ha but if one takes into accout the footprint of coal and uranium mining assosciated with those power plants, then it's not so huge.....
More convincing to address facts
Matthew: Playing the man doesn't do much for the credibility of the renewables case either.
Michael has made some interesting and valid points. Surely it would be more useful to address these.
On a different point - I"ve had a look at the Torresol link. The thing's enormous! Is that what it's going to take to get a measly 20 MW?
Agenda driven lobby organisation for profit attack citizen orgs
Michael,
The fact is that you are a lobbyist for an agenda driven lobby organisation that makes money off attacking the good will of hundred's of Engineers and Scientists who volunteer with organisations like Beyond Zero Emissions. They do this on a voluntary basis and make no money out of doing so.
Your organisation and its supporters BHP and Rio have a commercial interest in misleading.. Unfortunatey you cannot capture the public's hearts and minds because your product is poison.
Fukushima failed before the Tsunami hit meaning dozens of Reactors in Japan will need to be retired as they are in danger of doing another Fukushima or worse.
Baseload Solar Power exists, Gemasolar ran for 24 hours last night and will do this night after night after night. The plant is spec'd for 75% annual capacity factor. Which is much higher than most nuclear plants achieve (when incorporating availabilty factor into capacity factor) as they're taken off line for very long maintenance periods on a regular basis.
The world does not need nuclear power and inflexible plant such as nuclear and other baseload plant will be wedged out of the market within a decade as the cost of a kilowatt hour avoided from Photovoltaic falls below that of retail electricity.
Imagine having a plant that can't sell its power at 3AM for a good price but also can't sell its power at 3PM for a good price. That's definitely not an opportunity to make money or do anything near covering your costs.
What's the point.
Giles, my source is the IEA World Energy Outlook 2010 but I'm happy to agree that you have other data that I missed. But it doesn't change the point the IEA and others make: the world needs a mix of electricty supply in its portfolio if it is to meet its needs, including nuclear power.
My second point, which appears to have stung Matthew Wright into thinking he is being attacked, is that renewables advocates often overstate their case, at the cost of their credibility and of good public policy. BZE is a case in point.
Australian Uranium Assoc attacks pro-bono research group BZE
Michael, It's great for you to attack the work of Beyond Zero Emissions and myself, which is made up of over 500 volunteer contributors including over 200 pro-bono researchers, experts from industry, government, academia and regulatory roles.
Our current work on aviation has an 80% minimum switch from air flight to very fast trains. That leaves upto 20% of domestic aviation to be powered by synthetically derived avgas.
I'm glad the old nuclear guard is reading our reports, but not in enough detail obviously.
The 7% prediction for PV for Germany is on the old target of 50,000MWe. This is now going to be increased to 72,000MWe post the nuclear crisis. Which is 10% of their annual electricity production.
By 2020 the installation of Photovoltaic's in germany on rooftops will no longer be depenent on government subsidies. A kilowatt hour avoided at the meter will be cheaper than buying it from the grid. This is a reality. To take the additional Photovoltaic which will rise to between 120,000 and 200,000MW between 2020 and 2040 smart meters will be installed that allow the grid operater to shape production.
The big news in Spain is Solar Thermal w/storage. It kills the baseload argument touted by people who want to hang on to the old nuclear and coal way of doing things.
Times up unfortunately. Lets shift from the 19th century economy to the 21st century economy and do it without all the impediments of the old guard..
The French are going to meet their 22% Renewable mandate despite knowing what nuclear power costs.
it's woooorkinnnnng......
Here is something the pro-nuclear lobby crowd needs to be afraid of...
"Torresol’s Gemasolar power-tower installation has become the world's first concentrating solar power (CSP) plant to feed an uninterrupted supply of power into the grid over 24 hours." http://www.rechargenews.com/energy/solar/article265281.ece
Solar
Michael, did you have your eyes closed when you read the IEA website? as you suggest, the share of nuclear does not change, but ....
Quote 1: "PV is projected to provide 5% of global electricity consumption in 2030, rising to 11% in 2050."
Quote 2: CSP is expected to provide a kWh competitive with fossil fuel plants for peak and intermediate loads by 2015 in excellent resource sites. Competitiveness with baseload could be achieved by 2020, depending on how CO2 emissions are priced."
Quote 3: By 2050, with appropriate support, CSP could provide 11.3% of global electricity with 9.6% from solar power and 1.7% from backup fuels (fossil fuels or biomass)." And further down "CSP will grow from less than 1 gigawatt (GW) installed capacity today to several hundreds GW by 2050."
The older generation will not change the world
Quite a good point made in this article when referring to “engineers of a certain age”.
As far as contemporary examples of engineers who have changed the way we live, it is interesting to note that the founders of technologies like Google and Facebook, to mention only two, were in their twenties when they made their marks.
Unrestrained by the blinkers of a previous age, they have introduced technologies that have totally changed the way people live, work and play.
It looks like Australia is going to have to wait for many of the policy shapers in this country to hit the retirement villages - or simply stop being able to keep up with the pace (which is becoming apparent now) - before this country can move forward with the way it manages it's energy.
The risk in overstating your case
According to the recently published Annual Report of the International Energy Agency’s PV Power Systems Program:
· PV solar supplied 2.5% of Spain’s electricity in 2010. The ‘planned evolution’ of installed Spanish PV sees it decline from about 500 Mw in 2011 to 300 Mw in 2013 before rising to 600 Mw in 2020
· In Germany, PV produced 2% of Germany’s electricity. The IEA report extrapolates this to 7% in 2020.
Growth in PV solar is heavily dependent on feed in tariffs; that is, taxpayer subsidies, the kind of policies that NSW and WA are trying to unwind. The lesson is: overstate your case for renewables at the risk of your credibility.
PV will grow and its costs will come down. But solar and other renewables don’t even look like becoming the dominant sources of electricity. The IEA’s own forecasts to 2035 see fossil fuels being the dominant source of electricity, nuclear maintaining its share and a growing renewables share, mainly from wind. Oil’s share declines. PV or solar generally do not even have a category of their own.
It is useful to remind oneself that Matthew Wright's Beyond Zero Emissions renewables prescription for Australia by 2020 requires the end of domestic aviation and of about three quarters of private vehicular transport.
Nuclear is now a pathetic joke
In the west 2nd generation nuclear plants are not acceptable for new build due to valid safety concerns.
Not one 3rd generation AP1000 or European reactor is in operation.
Threfore the nuclear industry has no commercially operating offering.
Contrast that with the Gemasolar Baseload Solar Thermal plants. Baseload Solar Thermal plants are getting stamped out plant after plant after plant and they're getting cheaper and cheaper.
And the clalims from the ANSTO chief is about modular nuclear reactors at every substation in every neighbourhood. Combine this with a terrorist cell in every neighbourhood and you've got a serious proliferation and national security issue.
Nuclear notclear.
If you want nuclear please put the facilities at Sorento, or North Shore and when the reactors are done please deposit the waste adjacent to the reactors, not near where I live in the NT. Already Ihave the strongpossibility of a nuclear mine 12 Km from my front door and adjacent tothe aquifer from which i draw my drinking water. HOw many of you would tolerate that?The probability is also that we will have trains and trucks carrying radioactive waste running 3 km from my house and a nuclear waste dump 600 K north. Iwould love to see the whole caboodle parked next door to you southerners, where the demand is. No mentionof geothermal and thats sad. That way the reactor and the waste is stored well underground. We just extract the energy.
Spain is a success $20 Billion dollar Baseload solar rollout
Jim,
I beg to differ. Have you been to Spain, Germany and the US and seen the massive rollouts underway?
8000MW of PV last year in Germany, for 30% cheaper than the rollout in 2009. Not many technologies can boast they come down 30% from one year to the next.
Seen the baseload solar plants. A regulated support mechanism is getting the technology down the cost curve towards parity with conventional sources.
Once that is achieved and they have a timeline for doing this then the effective abatement cost will be zero.
That is the point of their rollouts. Australia is not doing anything because it is dominated with old thinking like yours and the interest of the fossil fuel industry who make a lot of money out of exploiting the environment and human health by continuing us on the path of an old outdated 19th century economy when we should be switching more rapidly to a 21st century renewable powered cleantech economy before we get left behind.
Shock & Horror more Likely
Matthew Wright: Really ! Not according to the Victorian Auditor Generals Dept's who had this to say recently http://www.audit.vic.gov.au/reports_and_publications/latest_reports/2010-11/20110406_fred.aspx about their most recent experience with renewable energy projects which appears consistent with other such projects elsewhere around the globe, including Spain. Hardly awe inspiring.
Business plans are succeeding 10s of billions invested annually
Jim Simpson - Business plans are already happening and 10s of billions are being spent annually. This is a fact. Feed-in-Tariffs are bringing the cost of Solar PV to parity and beyond with delivered coal, gas an nuclear at the meter.
This is likely to happen in Australia betwen 2015 and 2017. At that point there will be so much PV on the grid that those who are lumbered with 19th century flat chat coal plants will be losing money at 3AM when there is no demand as today and losing money at 3PM when there is no demand because PV is crowding the space out for other generation assets to enter the mix.
Welcome to the PV revolution. Complimented by Wind and by Solar Thermal w/Storage for firming power /energy security.
If Renewable's are "the Way forward' don't let us stop you!
Beat Odermatt - If you're so convinced that renewable energy options (wind, solar, thermal, tidal etc) are such good business ventures, why don't you develop a Business Case & take it to the market place by way of an IPO. Let see what potential investors make of it.
You're primary market will doubtless be among environmentalists & the Green movement who presumably will leap enthusiastically on the band wagon. Excellent! I wish you every success. Indeed, if the price is right I’ll be one of your first customers!
In the meantime, please keep my hip pocket. We’ve already been burned (ie solar PV feed in tariffs etc) & have no desire to contribute further without a proven, reliable & commercially viable baseload power generating systems!
True cost of coal fired power remains hidden!
The coal and nuclear energy lobbies remain silent about the true cost of coal and nuclear energy. Here in Australia we have large areas of land destroyed forever by open cut coal mining. Massive quantities of water are wasted to provide for steam and cooling in large power stations. Nobody can provide any accurate data about how much coal is actually lost in transit from the mines to the power stations and how much CO2 is emitted from spontaneous combustion in mines, overburden dumps and coal stock piles. Nobody can provide any good estimates about the true cost of coal mining or even less about a nuclear alternative.
I still believe that we should move towards a low carbon use economy. This can be achieved by legislations and incentives. For example, I propose that all large companies and Government Departments increase the use of non renewable energy by 3% every year. All providers of electricity would also be required to increase the percentage of renewable energy by 3% every year.
Instead of paying large carbon taxes, companies would have to invest in renewable energy, which will provide clear and measurable outcomes. It would take a single generation to move towards a low carbon economy. My proposal is affordable, ambitious and achievable. A carbon tax is just a complicated way to do nothing.
The truth about capacity please Giles
Honestly Giles, the facts about solar PV and wind power are there for anyone who can use the net to find out for themselves. Let's take Germany, which has spent about $200 billion in today's dollars on building its present installed PV capacity of 17.3GW and wind capacity of 27.2GW for a total of 44.5GW. That sounds impressive until you look at the actual power all those plants produce in a year - 48,500GWH, an average capacity factor of 12.4% and actual capacity of 5.5GW. Two average coal, gas or nuclear plants with a capacity of 6GW running at a 92% capacity factor can produce the same power as Germany's entire outrageously expensive installed renewable installations.
Now take Denmark. After 40 years of spending big and dotting the fetching landscape with wind turbines, the entire installed capacity in 2010 was 3.752GW with a yearly output of 7810GWH - a capacity factor of 23.8% and actual capacity of 892MW, which comprises about 22% of the small country's power needs. One decent 4.5GW nuclear plant could supply the whole country.
Much has been made of the so-called 150MW PV plant to be built at Moree in NSW. Allowing a generous capacity factor of 20%, the actual usable capacity of this plant will at most be 30MW for a cost of $923 million and 10.2 square kilometres of land. By comparison, the Loy Yang A and B coal fired power plants in Victoria produce 3300MW at more than 90% capacity factor for an actual capacity of about 3000MW - 100 times the output of Moree!
Shock of the new
Not quite sure what you argument is, Giles. Is it that renewables should get more of a go? Or is it that renewables can supply all the electricty we need and that the world doesn't need traditional supplies of electricty? Do you think all electricity can come from distributed sources? Or just some of it? One reason I'm confused is that no international organisation with any credibility in energy policy, including the IEA, is forecasting the demise of coal and nuclear energy in favour of renewables, even in the long term and even with the exceptional growth expected from renewables. Yes, that's partly because renewables will get cheaper; but so will nuclear; and both will be relatively cheaper with a tax on carbon. Isn't the policy problem that the traditional and new sources of electricity have different applications and different sets of trade offs and that choosing the mix is a bit of a challenge? Isn't that the debate we should be having?
solar energy auction
The ACT Govenment has just announced its large generator solar electricty auction, with bids to be made in tarrif rates. Individual plant will be between 2 and 20MW capacity. This will be a great test of where PV (and others ?) prices are now, as scale efficencies will be present and the ACT has a good solar resource close to load (with government offices in particular being well suited to solars availability).
Peak load
If peak load is caused by air conditioning it would seem sensible to use solar to meet this peak, unlike the UK which has low levels of sunlight and peak loads more associated with heating needs and would perhaps be better off using tidal, wave or wind.
Solar Thermal also below wind by 2015
At the CSP Today conference in Las Vegas last week, the CTO of Sener (a large multinational investing heavily in Solar Thermal technology) predicted the cost of power (LCOE to be precise) from their central tower technology would be below 10c/kWh within 5 years. Other companies made similar predictions. They have a 50MW plant that has just been commisioned providing 24 hour (baseload) power. This is exciting stuff.
While Solar Thermal is still an immature technololgy, all of the worlds largest energy players are investing heavily including GE, Siemens, Alstom and Areva. The conference certainly had a bullish feel.
If Solar Thermal was able to hit a cost of 10c/kWh with baseload power it would solve much of the worlds renewable energy needs.
Germany, Italy and Switzerland have, since Fukushima decided to abandon Nuclear energy. These are countries that have made huge investments in nuclear that have now decided it is not worth the risk. Nuclear is not needed in Australia, is hugely expensive, has no chance of happening here within the next 20 years and very little chance within the next 50.