May 20th 2017

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Articles from this issue:

COVER STORY Morrison's budget jive lacks inherent harmony

CANBERRA OBSERVED Does budget do heavy lifting or is it "Labor lite"?

NEW ZEALAND Porn poll shows strong majority supports default opt-out policy to protect kids online

FRANCE Emmanuel Macron: a president without a political base

YOUNG POLITICAL ACTIVIST TRAINING (YPAT) Seven-day intensive course without equal in Australia

FOREIGN AFFAIRS Taiwan to go full steam ahead with submarines

RURAL AFFAIRS Murray Goulburn closures an omen of an industry in crisis

CLIMATE SCIENCE Temperature hasn't risen in 20 years: latest data

QUEENSLAND ENERGY 50 per cent renewables target: Is it credible?

LITERATURE Inexplicable: the ongoing appeal of H.P. Lovecraft

LITERATURE The gentle giant: Samuel Johnson

MUSIC Promissory notes: the public funding siphon

CINEMA Going in Style: Old dogs turned rookie robbers


BOOK REVIEW An abstemious revolutionary

BOOK REVIEW Soviet-era thriller revels in details

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50 per cent renewables target: Is it credible?

by Michael Ord

News Weekly, May 20, 2017

Queensland’s Palaszczuk Labor Government is investigating a renewable energy output target for Queensland of 50 per cent by 2030. The Government established a Renewable Energy Expert Panel in 2016 to provide advice on credible ways to achieve the 50 per cent target. The expert panel issued a draft report, “Credible pathways to a 50 per cent renewable energy target for Queensland”, in October 2016, and the Government is currently considering a final report.

A brief background to electricity generation in general and to the energy context in Queensland will help readers judge the believability (potential for reality) of a 50 per cent renewables output target.

Generation background

Electricity generating plants powered by fossil fuels and hydro, nuclear, and geothermal technologies match controllable output with uncontrollable demand. Short-term demand for electricity can be estimated with a fair degree of confidence. Generating plants are brought on line or taken off line in anticipation of peak and off-peak demands. Some plants (coal) operate at full capacity to satisfy base-load demand, while others (gas and hydro) are brought on line and taken off line in response to variable demand.

While hydro and geothermal are controllable renewable energy sources, far more challenging are solar and wind. Yes, the sun shines every day, but what about cloud cover? Yes, a wind blows most days, but what about the wind speed? Thus solar and wind outputs are uncertain; therefore uncontrollable.

A one-megawatt solar-power plant does not represent the power output from a one-megawatt fossil-fuel plant except for a few hours each day, around midday. Its megawatt/hour output is much lower than that of a fossil-fuel plant, though solar power is generally available during peak demand. A one-megawatt wind-power plant does not represent the power output from a one-megawatt fossil-fuel plant except for when the wind is blowing.

Issues with renewable generation include that the effective output from wind can be as low as 25 per cent of installed capacity, night time wind-power output is often not useable, and solar power can destroy the economic basis for day-time natural gas plants.

With the continuing growth of solar and wind power, matching uncontrollable supply to uncontrollable demand is a growing challenge for energy networks. It only becomes a more daunting task as solar and wind gain relative importance in controllable supply if no large-scale means of storing electricity is available. Hence the problems of energy supply in South Australia and looming problems in other states.

Market context

Queensland is part of a national energy market. The mainstay of base-load power is black coal in New South Wales, Western Australia and Queensland, and brown coal in Victoria.

Hydropower is significant in relative terms in Tasmania but only a minor generation component in the east-coast mainland states. Gas generation provides a peaking load and small solar provides a small generation component during the day.

Since the closure of Hazelwood Power Station on March 27 last, Victoria’s brown-coal generation has gone down by a third.

Expert panel’s draft report

The draft report of the Queensland expert panel states that: “modelling indicates the 50 per cent renewable target for Queensland can be met while maintaining the required reliability standard in Queensland. In contrast to the South Australian experience, coal-fired generation is expected to continue to play a significant role in Queensland to 2030 under a 50 per cent target.”

The panel does not envision that a 50 per cent renewable energy target would require the early retirement of coal-fired generation in Queensland. The draft report modelling allows the additional renewable capacity to create a large oversupply of capacity, which will put downward pressure on prices. While the existing generators are projected to suffer large reductions in future profits, the modelling assumes that they will continue in operation.

The draft report recognises that if the broader national energy market experienced a sudden exit of existing generation capacity, this could result in insufficient capacity being available during some periods, or greatly higher prices. This could be considered a credible risk if the market did not anticipate plant closures and there was insufficient certainty to justify investment in new generation. However, the panel expects that given the spread and ownership (including government ownership) of Queensland generation, the sudden exit of large amounts of generation is unlikely.

Credible expert panel?

The panel has a chair and four members. The chairman, Colin Mugglestone, has completed a large number of renewable transactions. One member, Allison Warburton, is prominent in the climate change and clean-energy legal space; another, Paul Meredith, is a research academic managing a portfolio of solar research; and another, Amanda McKenzie, is an environmental leader and chief executive of the Climate Council: the “go-to” organisation for information on climate change and renewable energy.

The fourth panel member, Paul Hyslop, consults on matters including assessments and analysis of renewable energy investment, and the impact of government climate change policies on existing assets and potential investments. It seems that the expert panel has a bias towards climate change belief and renewable energy that could result in support for a target based on ideology rather than a principled position.

The expert panel inquiry was tasked with assessing and establishing a credible pathway for up to 50 per cent renewable energy generation by 2030. Credible, of course, means reliable, probable, realistic. But how credible are the expert panel’s findings and assertions in the draft report?

The draft report states: “it is recognised that adopting a target base of 50 per cent renewable output may deliver approximately 54 per cent renewable energy generating capacity by 2030.” It is not clear what point the panel is trying to make by linking the 50 per cent output and 54 per cent capacity values. Indeed, an analysis of these values shines a light on the problems with high renewable-energy targets.

Just to clarify, the generation output is measured in gigawatt/hours (GWh), while generation capacity is measured in megawatts (MW). The following table summarises the expert panel’s assertions about Queensland’s capacity (MW) and output (GWh) for the current situation and forecast outcome for 2030.

The panel expects that the existing fossil-fuel generating capacity will be remaining in 2030 but will generate output at approximately half their current rate. Does the panel really believe that it will be commercially viable for fossil-fuel generators to continue operating at half their output and half their revenue!

It seems that the panel may have adopted the position that coal-fired generation will remain because it recognises that alternative generation arrangements are required to make up for the unreliability inherent in renewable energy generation.

In its draft report, the expert panel has not considered any viable options for ensuring security and reliability other than assuming that coal-fired generation will remain and will be available to be turned on when renewable energy is not available. The critical question is, what are the viable options for ensuring the security and reliability of energy systems incorporating high targets of renewable energy?

Energy security, reliability

A paper by risk-assessment expert Roy L. Nersesian, of Monmouth University in New Jersey, “Integrating Renewables with Electricity Storage”, helps answer this question. Professor Nersesian’s premise is that solar and wind can be a controllable source of power if there is ample storage of electricity from which a dispatcher can compensate for falling solar and wind output.

A pumped-storage plant arrangement can be used to store and supply electricity to cover the mismatch between electricity supply and demand. Queensland has one example of such an arrangement in the Wivenhoe Pumped Storage. A utility-sized electricity battery could perform the same function as a pumped-storage plant by storing surplus electricity for dispatching to cover shortfalls.

However, currently only gravity batteries have the necessary storage capacity to serve utilities. Utility-sized electricity batteries are under development, but a technological breakthrough is necessary in battery design to identify a low-cost material that can store enormous quantities of electricity while accommodating rapid rates of charge and discharge.

Professor Nersesian concludes that dependence on solar and wind would place consumers at risk of interrupted service given the state of today’s battery technology. Until large-scale electricity storage is available, and in the absence of large-scale gravity batteries, there may be an upper limit, say 30 per cent, for renewables generation within a system in which stability can be ensured by varying the output of natural gas or hydropower plants.

Professor Nersesian’s indication of an upper limit of 30 per cent for renewables generating capacity would relate to an optimised system of coal, gas, perhaps a small component of hydro storage, and an optimised ratio of variable to fixed load generators.

The 30 per cent generating capacity value would likely attain in the order of 15 per cent renewable energy output, which is less than a third of the Queensland target of 50 per cent.

Ideological bias

The expert panel’s assessment that existing coal-fired generation capacity will remain in 2030 seems to be a convenient position for achieving climate-change ideology’s aim of high renewable-energy outputs while at the same time ensuring a secure and reliable energy system. But the draft report’s discourse and technical outputs do not demonstrate how such a high renewable-energy output target and system security and reliability would be realistically achieved.

The Queensland Government’s response to the expert panel’s final report will involve some intriguing considerations.

The Government has responded to current budget problems by shifting debt and taking profits from government corporations, including Queensland Government-owned generation companies. It is these same companies whose business models and profits will be trashed by a renewable-energy sector whose existence and growth substantially relies upon government subsidisies.

A 50 per cent renewable-energy target for Queensland is unrealistic and embarking on such a path would disrupt existing power providers and result in security and reliability issues that will ultimately harm consumers and destroy Queensland businesses.

Michael Ord is a civil engineer with a special interest in risk analysis modelling. Michael was involved in the development of the Queensland Wivenhoe Pumped Storage early in his engineering career. Incidentally this storage is rarely used because its owner’s portfolio is such that it is financially more economical to operate a coal-fired asset – nature’s energy storage.

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