The All-Energy Australia Exhibition and Conference 2017 was held in Melbourne in conjunction with the Waste Expo Australia. All-Energy provided an opportunity to brush up on the latest technologies, meet other professionals within the Energy industry and learn about the current developments within the energy sector.
Future Energy Storage Trends and the Grid
Are batteries commercially viable? This depends on where you are. Batteries are not yet good for bulk commercial energy storage where the grid is near. But as an off-grid diesel substitution they are viable now. Current costs are about $0.28 /kWh. The target for bulk storage is about $0.02/kWh. However, batteries do have useful niches:
"Coal is like an ex-lover, it was fun for a while but it is time to move on." The replacement of baseload coal power with intermittent solar or wind energy will require a Smart Grid, optimised renewables and proper system management and of course energy storage. The future model for Australia's electricity production will be a fleet of dispatchable renewables that will supplement a fleet of variable renewables. The grid will also need to adapt to EV charging, since the average extra usage is about a 25% increase in energy used each day, but the charging might be over a short time which could place capacity restraints on the supply system.
Australia is still heavily reliant on fossil fuels for electrical energy generation, with 63% coming from coal. Furthermore 18% of Gas production in Australia comes from Coal Seam Gas.
Renewable Energy generation accounts for about 14% of electricity production in Australia, of which Biomass accounts for 54.4% (Bagasse 30%, Wood products 23.8%, Other 0.6%).
Traditional Coal Thermal generators utilise the Rankine Cycle which heats water to form steam to drive turbines. The steam is then condensed with significant water losses to the atmosphere. Biomass utilises the Organic Rankine Cycle which utilises a working fluid instead of water (think refrigerator), which is recycled. It is also able to utilise low grade heat which is collected in a heat carrier at a temperature of 90-200 degrees Celsius.
For heating, alternatives to Natural Gas barely get a mention. Biomass provides an effective source of cheap heat and is usually used locally by industries that require a heat source.
For biomass to be viable, a 24x7 operation is preferable, with at least 2 shifts 5 days/week needed. Feedstock is anything organic with a moisture content of less than 50%. However, you need a social license to operate, so this limits what you can use. Common feedstock includes woodchips, sawdust and bark, straw from sources such as wheat, oats and rice, and nut waste in the forms of shell, pit and stone. These fuel sources need a cost of less than $5 / GJ delivered.
Biomass scales well, with the more you use the better the return on investment. Biomass plants are usually between 1 to 30MWh electricity capacity, and are suitable for retrofits (viz Natural gas > 120,000 GJ/yr, with LPG a lot lower), and have a payback period of around 4 years.
The session on Community Energy was inspiring, hearing the great work for local community energy group Warburton Community Hydro, who are implementing a community owned run-of-river micro-hydro at Warburton Golf Club in the Upper Yarra region in Victoria. The 100 kW turbine is expected to generate enough power to supply 150 homes. Funded by their local community bank, the project has been supported by Yarra Valley Water, Yarra Ranges Council, the golf club and energy retailer PowerShop.
At the outset, the Sydney Community Energy Group Pingala posed the question of "Why Community Energy?". The close proximity of the Hunter Valley with its enormous coal mines, and largest coal port in the world, the pending climate disruption due to the effects of climate change, and the concentration of power within the electricity industry with a few big players provides the impetus. Community Renewable Energy (CORE for short) is an approach to renewable energy development that involves the community in initiating, developing, operating, owning and/or benefiting from the project.
Pingala modelled a system for community energy and worked with Newtown craft brewery Young Henrys to install 115 solar panels on the roof of Young Henrys. The finance was raised by the community at an Investor Party at the brewery. Over-subscribed, about 2/3 people got a share. The panels were installed the next day. The researched model that was used was a cooperative, which houses the investment. A cooperative was a good fit as it is community focused, equitable, and scaleable. The share prize was set at a low entry point of $250. Young Henrys pays back the cost of the panels through a lease agreement with the cooperative. Community investors can expect good returns (potentially around 5%/annum). Pingala is ramping up and is looking for other potential host sites.
The Valley Centre is creating a Sustainable Communities Building Model, to make sure energy is equitable and available across the country. Australian indigenous remote communities often have electricity bills of around $3000 per quarter for each house which is effecting the health, comfort and well being of people in those communities. This has primarily been due to the poor maintenance of housing stock.
Working closely with indigenous communities the Valley Centre have helped form the Australian First Nations Energy Alliance. This alliance will ensure "remote and isolated communities are sufficiently catered for in respect to their energy needs" and help them transition to renewable energy. Currently grappling with the issue around credit ratings and loans, looking ahead the aim is to provide solar farms as "Revenue Generators for First Nations".
Hydrogen is the glue between electricity and transport
H2 is a new market for Solar and Wind powered electricity through electrolysis.
Early adopters of H2 fueled vehicles will probably be back-to-base fleet operations which will be refueling at the depot. Other early adopters will be heavy transport and shipping. There is currently a H2 fueled passenger train being trialed in Germany. H2 may be a cheap substitute for the electrification of rail.
Other markets include the chemical industry (e.g. Ammonia production), extending natural gas, and biogas extending.
The project development roadmap of solar and onshore wind farm development is a phased approach from proving feasibility to structure project bankability. The roadmap includes: Pre-feasibility, Feasibility, Development, Electricity Contracts and Financial Close.
Site selection and suitability challenges of solar and onshore wind farm development include: constructability (site access, delivery route, site terrain), grid interconnection and transmission (interconnection point, transmission line length, right of way), natural hazards and site conditions and surroundings (local community (noise, visual), habitats, tall objects, optimization of site layout).
Risk Analysis and Management is another key component. Risks include: Capital cost overruns and construction delays, such as geotechnical, foundation design, grid code and local standards compliance, scope gaps and contractor interfaces and revenue and operational risks effecting project bankability such as grid power curtailment.
Project solutions should work to minimise LCOE.
Houghton Solar Farm (Townsville) is a good portfolio fit for Pacific Hydro. The project had effective scale, technology, location and market, project economics and bankability and satisfied their plans for commercial diversification.
Engineering planning includes: resource measurement (wind / solar), energy yield (generation and capacity factor), grid connection and capacity and preliminary design - right size.
Environmental and other planning includes: Environmental assessments (eg flora and fauna, noise, visual), traffic impact assessments and management plans, Hydraulic/Hydrologic Impact assessments, geotechnical investigations, planning applications, and environmental management plans.
Early stakeholder engagement is key to project success. Stakeholders include: Landholders, Neighbours, Community (including indigenous), local councils, local authorities (fire, water), State government, local businesses, grid companies, suppliers, and debt and equity investors.
The Barcladine Solar Farm in central Queensland is a $69 million run by the Spanish company Elecnor. Elecnor set up Elecnor Australia to manage the project locally. A special purpose vehicle "Barcladine Remote Community Solar Farm" (Head company) was setup to own the asset and manage the engineering, procurement, and construction contracts through Elecnor Australia. Elecnor set up the Sale Memorandum before the solar farm was built - very brave!
The solar farm was sold with Elecnor Australia retaining 20% ownership for 2 years to ensure effective bedding-in of the solar farm post project. Lessons learnt include: get aligned on process - a clear process results in no animosity between parties, and do your housekeeping - so you can find those paper share certificates when you need them!
Understanding and managing key clauses in project agreements are essential for success in utility solar projects. Such clauses include: performance securities and warranty bonds where a percentage of the contract price is placed in insurance bonds, liquidated damages for delay and performance, and the defect liability period. Other essential clauses include Lender Bankability requirements such as: serial defects, performance guarantees and ratios. Understanding and managing Grid Connection documents and clauses are essential. These include: time to complete network service providers work, limitation of liability and right to terminate.
96% of electrical storage around the world is pumped storage. Pumped Hydro Energy Storage (PHES) is a cost effective for large scale storage with a break even price of $0.67 / kWh and has the potential to control price volatility within the electricity market. However, only 3 PHES exist in Australia: Tumut 3 (600 MW), Wivenhoe (500 MW), and Shoalhaven (250 MW). These are older technology plants that do not have reversible pumps.
PHES can be used as peaking plants, and enable energy to be shifted from low demand (oversupply and low price) times to high demand (and price) times (arbitrage). PHES are energy consumers (not generators) and generally have over 20% losses from a combination of electrical, mechanical and hydraulic losses.
Kidston Pumped Hydro has an expected loss of over 22% due to transmission losses from the former mine site to where the electricity will be consumed.
New sites are typically identified through topological analysis, with the best sites being those where there is a high head differential between upper and lower storages. Proximity to main transmission networks and roads also affect viability.
So what's currently stopping PHES?
South Australia, suitable fresh water sites – particularly in non-environmentally sensitive areas – are in short supply. The Cultana Seawater Pumped Hydro project uses the seawater and the sea as the lower reservoir which should reduce costs. However, using sea water brings complications and greater costs in keeping sea-water-supplied systems clean and uncorroded is more expensive than fresh water PHES. The only other one in the world was the Yanbaru Seawater Pumped Storage Power Station, in Okinawa, Japan which closed last year.
Cultana Pumped Hydro is near Port Augusta on Defence department land and will consist of a reservoir on top of a Precambrian plateau and a 5km penstock (pipes) to a constructed inlet on the Spencer Gulf. It will produce 225 MW electricity with 1770 MWh storage capacity for 8 hours and will cost of $477 million, which equates to about $2.1 million per MW (which is a bit expensive). However, arbitrage revenue modelling put the ROI for the asset at 8-12%
Distributed Storage Solutions for Closed-Loop Pumped Hydro provide an innovation solution with numerous small scale (< 25MW) PHES built using a common modular design providing economies of scale. At present these are quite expensive to construct ($360/kW). Technologies such as bolted tanks are being investigated to reduce costs. Sites where existing tanks exist that could be used include Coalcliff, southern NSW and Mt Ainslie Canberra (with its 200m head).
In Gaildorf, Germany, an interesting twist of PHES is being piloted. Naturstromspeicher is the combination of a wind farm with a pumped storage hydro-electric power plant. It utilises the towers and bases of wind turbines as top water reservoirs for PHES. Naturstromspeicher uses standardised technology throughout which will keep both commissioning and operating costs down.