The ‘good oil’ on renewables
Renewable energy sources, paticularly solar technologies, are rapidly gaining momentum in australia, writes john power. But the transition to a renewables-powered grid is far from straightforward.
When discussing renewable sources of energy, it is important to make one point clear from the outset: renewable energy systems – primarily (but not limited to) solar- and wind-powered technologies – will inevitably replace coal-powered energy production just as assuredly as the car replaced the horse and cart.
How can we say this with certainty? Photovoltaic- (PV) and wind-based energy sources are already cleaner, cheaper and more environmentally responsible than fossil fuel-burning systems, including gas. And consumers have made up their mind: a quarter of Australia’s households (2m) have already installed solar power systems… and the uptake is quickening. This trend demonstrates a surging consumer preference for renewables over antiquated, costly and polluting dinosaur technologies like coal combustion. Given the scientific and market forces working in favour of renewables, a gambler would be a fool to back T-Rex over Tesla.
However, like any technological transition, the switch to a predominantly renewables-based future will require both political and technical prowess, no doubt beset by teething problems along the way. The hurdles are significant: for instance, the replacement of a ‘centralised’ fossil fuel production methodology with a cornucopia of ‘decentralised’, mixed-media renewable energy sources will require great ingenuity; and managing the mix will need both civic and domestic behavioural change and cooperation in order to maximise efficiency and reliability.
Nevertheless, the transition is in motion… and hypothetically fully achievable within our lifetime, says Glen Morris from SolarQuip, which specialises in renewable energy training, design and installations. Glen has more than a decade’s experience as a TAFE instructor in Victoria and has expertise in the practicalities of solar energy implementation for domestic and commercial applications.
When examining renewable energy topics, Glen says, it is important to realise that the creation of a renewables-based grid involves more than simply ‘unplugging’ coal and ‘plugging in’ solar and wind or similar renewable energy sources. On the contrary, any meaningful discussion must involve an acknowledgement that the structure and useage of a future renewables-based grid will be very different from today’s models.
The grid of the future will be characterised by:
(a) GREATER DIVERSITY – there will be more diversified types of energy production from different renewable energy sources, all fed into more heavily interconnected grids at myriad locations.
(b) LOWER DEMAND – there will be reduced overall demand for electricity through more energy-efficient home appliances and industrial practices.
(c) DIFFERENT USEAGE – a greater emphasis on daytime energy consumption habits and storage methods, including ‘smart’ home automation-assisted operations, to maximise the effectiveness of solar energy production.
(d) MORE AUTONOMY – while most homes and businesses of the future will remain connected to the grid, there will be greater domestic self-sufficiency, as well as more autonomy at local levels through micro-grids and embedded networks, which will help streamline and minimise pressure on the grid.
Glen says all these elements, considered in tandem and applied within sensible regulatory frameworks, should provide more than ample renewable energy to fulfil Australia’s total electricity needs.
BACK TO BASICS
Let’s examine current renewable energy capture and storage systems, particularly in relation to solar energy, at a local level, and then expand our horizons to see how civic and national models might function.
Traditional electricity supply models in Australia have been based around centralised production facilities sending energy into massive grids, but energy can flow in both directions.
“The ability for energy to flow in reverse direction, and to flow from the customer’s premises back to the grid, has allowed the customer to get some impact from the low voltage (LV) network,” Glen says, noting that consumer interest in grid-connected solar power generation in Australia really took off in 2007.
It works like this: homes generate direct current (DC) solar energy via rooftop panels, which is converted into alternating current (AC) by an inverter. If the solar energy being produced by the household is greater than the energy being consumed, then the surplus AC energy is fed back into the local grid, resulting (hopefully!) in a healthy rebate back to the customer.
Initially, thanks to generous government incentives to install solar energy systems, rebates (or Feed In Tariffs: FITs) of up to 60 cents per kilowatt hour (kWh) were being paid to customers in states like New South Wales and Victoria. Today, most FITs sit around 8 cents per kWh or less; meantime, the cost of purchasing power direct from the network can cost from 15–30 cents per kWh.
What is stopping large property owners from going into business as mini power stations? The answer is that household energy flows being exported back into the grid are capped, regardless of the size or output of the particular user’s solar capacity. Again, levels vary across different networks, but feed-in thresholds of 3–5 kWh are common.
“Since 2015 the standard for inverter systems connected to the grid has had to comply with updated standards AS/NZS 4777 Part 2 Grid Connection of Energy Systems via Inverters, which mandates that inverters cannot disturb the network beyond its safe parameters,” Glen explains. “So, if inverters detect that the grid voltage is approaching its limits, they must ramp down their power output. We’ve actually got built-in safety or power reduction systems built into the inverters themselves, which you can’t override.” More on feed-in thresholds later…but first let’s quickly consider how tactics to reduce demand might improve the effectiveness of renewable energy systems from the outset.
USER HABITS & EFFICIENCIES
Before considering how renewable energy supplies function, it pays to make sure demand is as low as possible.
Lower demand relieves pressure on overall renewables infrastructure, which in turn improves the feasibility of uptake at both private and civic levels. There are many ways of reducing energy consumption at a local level.
Solar-powered LED street lighting, for instance, is a fine model of energy reduction in the public domain. Likewise, batteries linked to garage or home solar arrays could be used to recharge electric cars overnight.
Glen says energy-efficient home appliances have also helped improve energy efficiency. Star rating schemes like WELS (Water Efficiency Labelling Scheme) on appliances have had a really big impact – “In fact, energy-efficient appliances have done much more than solar in reducing demand!”
Importantly, he says home automation is playing a leading role in the management of household energy consumption. Smart programmable appliances like washing machines can be operated in the early afternoon during optimal sunny conditions even if the homeowner is away. Similarly, hot water systems and pool pumps/heaters can be programmed to operate at times of greatest efficiency instead of during the night… the whole practice of heating water at night in ‘off peak’ times arose purely to accommodate coal-fired plants, Glen says, as a means of soaking up baseloads being fed into the grid; the opposite practice should apply to solar-based renewables, i.e. heat water when the sun is shining in the middle of the day.
At an industrial level, factories or industrial estates could be encouraged to slow down production or perform maintenance when unfavorable conditions (poor sunlight AND no wind, known as a ‘correlation period’) are likely.
Micro-grids, Glen says, refer to clusters of houses (from a few dwellings to several thousand homes), which aggregate and distribute privately generated renewable energy such as solar power. For instance, Glen says his own property is a member of a seven-home cooperative micro-grid.
“Often one home will have a greater demand for solar, while another one is producing more than it’s using,” he observes. “So often the energy is not even being ‘stored’, we’re just directly supplying it; you start to average generation and production rather than micro-supplying exactly the right amount to every single home.”
Micro-grids usually retain connection to the wider grid, he explains, but only to supplement private energy reserves. Popular with greenfield developers, micro-grids allow for the cost-effective electrification of new or remote neighborhoods in a way that will appeal to homeowners, allow developers to gain a better return on their investment, and reduce hassles for networks.
Embedded networks also help streamline energy consumption at a civic level. Used mostly in defined areas like retirement villages, customers remain connected to the wider grid with their own separate meters, but the network provider’s relationship is with the overall village rather than with each resident. The advantage to the network is a simplified and aggregated connection.
Grid control at a local level is not new, Glen says. “Once upon a time it was the norm for councils to generate and sell electricity,” he says. “In my area Warburton [Vic.], for instance, they had a hydro plant that generated electricity for the Yarra Valley. Interestingly, they have just put that back online and are now supplying electricity back into the market, so that’s an example of a community initiative to regain control on clean energy production.”
RAISE THE CAP
Given the success of these kinds of initiatives, should households be making a bigger contribution to the grid? We’ve already seen how energy export levels of 3–5 kW are commonplace, but should these caps be raised?
Yes, says Matthew Wright, Executive Director of the companies Beyond the Grid and Pure Electric, and Executive Director of Zero Emissions Australia.
According to Matthew, an award-winning, postgraduate-qualified engineer, export thresholds from homes back into the grid should be raised immediately and consistently across the board.
“I’d mandate a 10kw feed-in on all single-phase connections, which covers more than 90% of the population in built-up areas,” he says.
At present, Matthew explains, many electricians are finding that 5kW energy export systems are tripping out due to apparently high levels of voltage already servicing the grid.
However, Matthew says this occurrence is mostly due to poorly calibrated transformers, which only permit a certain percentage of fluctuation above or below preset voltage levels. Two years ago, he says, the International Electrotechnical Commission (IEC) Harmonised Standard in Australia was lowered from 240v to 230v… but not all transformers were adjusted in line with this new level. Hence, a grid operating at, say, 241v two years ago might have been measured at just 1v above the prevailing guideline level of 240v (a fraction of a percentage over the threshold), whereas that same system today – suddenly benchmarked against the lower ceiling of 230v – would be a massive 11v above the new mark (a much greater percentage difference).
“Most transformers operating at 240v would happily be accepting solar exports from these domestic customers.”
Recalibrating transformers, Matthew suggests, could be done cheaply and swiftly. “I’d be putting distribution companies on notice that they need to pick up the main transformers at their zone substations so that residential feed-in runs are auto tapping separately through commercial feed-in models, that way we can fix the voltage issues that are showing up on the grid.
“Auto tap changing means they put in more coils in the transformer [at the zone substation] so the voltage get’s changed; they wouldn’t need to retrofit the street transformer, which is where most of the cost is.”
Another reason for low export limits of 3–5 kW, he suggests, is more political.
“Most of the electricity distributors are owners of gas as well, and they know that once people get solar they go all-electric and turn off the gas.”
One of the main objections to renewable energy is that it lacks the grunt needed to power a dynamic metropolitan environment. Sure, solar energy (from wind farms and domestic sources) met 11% of all NSW’s need in January this year1, but what about the other 89%? What happens in winter when energy output levels may drop? More specifically, how can renewables overcome unfavorable conditions and correlation periods?
Glen Morris says these kinds of questions are infuriating, declaring that Australia is a ‘superpower’ as far as renewables are concerned. Countries like Germany, he says, which has the solar resources of southern Tasmania or South Georgia due to its geography and location, frequently hits 100% renewable energy supply via both wind and solar supplies – “The Germans are phasing out their coal-fired power stations and their nuclear plants, and this is a country with nowhere near the resources that Australia has.” (And, as Matthew Wright adds, a solar panel or wind turbine in Germany produces approximately half the annual energy of an equivalent panel in Australia!)
Glen says some Australian localities and states are leading the way by example. In South Australia, which recently installed a giant Tesla battery facility, the state is able to satisfy 100% of its energy requirements “on a good day” from renewable sources; similarly, towns like Yackandandah in Victoria and Tarago in NSW have cut themselves off the grid completely.
Another strong objection to a renewables-based grid is its complexity, involving both immediate energy delivery systems as well as storage reserves to keep power flows reliable and consistent all day, every day.
Solar panels, obviously, generate peak energy in times of strong sunlight, so it makes sense to use as much solar energy as possible during those times of peak production. Nevertheless, Glen says, energy storage is equally necessary to cater for nighttime demand and to provide 24/7 energy security. Storage can be achieved in two principal ways, i.e. (1) battery or chemical storage, as well as (2) pumped hydro, whereby solar energy is used to pump water from a low-lying dam to a higher-level dam; the higher-level water can be released at any time to produce gravity-assisted hydroelectric power). Stored energy can also be supplemented by other 24-hour renewable sources such as wind, geothermal, wave, biomass, etc, to deliver reliable energy at all times of the day. When averaged out over large areas, these diverse forms of energy become increasingly reliable and predictable.
Battery storage systems like the Tesla array in SA are best regarded as fast-response capacity solutions, meaning they ‘kick in’ extremely quickly (140 milliseconds) when required. Such facilities are extremely powerful assets: Matthew Wright notes that the Tesla battery array in SA can provide one-seventh of the state’s overall energy requirements, “which is pretty amazing”.
When it comes renewable energy adoption on a grander scale, there are some fundamental engineering and political principles that must be understood.
Coal-fired power stations, in particular, are highly inflexible, which means their output is difficult to ramp up or down. This matters because electrical energy supply must be precisely and continuously matched with electrical energy demand to keep system frequency stable. For instance, if there were a surge in renewable energy in a specific locality, perhaps due to an increase in wind strength or solar generation, then one might expect that the coal-derived energy could be lowered (or even switched off) rapidly in order to prioritise the higher levels of renewable energy. Not so.
Josh Jordan, Senior Engineer at ITP Renewables in Canberra, says pricing is the main instrument that determines the composition of eastern Australia’s a grid’s energy at any point in time. The Australian Energy Market Operator (AEMO) is responsible for continuously and exactly balancing electricity supply and demand,” Josh explains. “One of the difficulties of applying markets to electricity is that there is no room for error!”
The primary balancing act occurs at five-minute intervals. Energy generators bid for the right to provide power to the grid at any given interval, and AEMO instructs winning and losing bidders to adjust their output accordingly. There are severe penalties for operators who ignore or contradict AEMO instructions.
AEMA dispatches energy according to bid price, which is related to marginal generation cost. Renewables like solar and wind have a marginal generation cost which is close to zero, compared to slightly higher marginal costs for coal and much higher marginal costs for gas. Therefore, renewables with a near-zero marginal cost – which have the potential to add additional revenue through green energy certificates – are very price-competitive in this system, placing immense pressure on costlier energy generators like coal-fired plants. As Josh says, there are even times when a coal-fired plant (and even wind farms, depending on conditions) will make a negative bid to provide energy to the grid, i.e. the generator will pay for the right to provide energy – i.e., they prefer to stay online because they believe they will be able to earn higher prices in due course. There is an additional layer of supply adjustment known as the Frequency Control Ancillary Services (FCAS) markets. These act to correct sudden imbalances such as the loss of a large generator, and also help to “correct any slight supply-demand imbalances that might have arisen.”
Things become more complicated, however, with solar energy, because no single operator is responsible for this form of supply as a differentiated load. There are no government regulations, for example, requiring providers to accommodate rising tides of renewable energy.
Nor are there any regulations requiring a distribution network service provider (the owner of the poles and wires) to provide necessary infrastructure for new entrants to the renewables market, such as a wind farm. Indeed, as Josh observes, distribution networks are free to set their own prices and conditions regarding network connections with aspiring renewable energy players.
Regulatory uncertainty, as well as the absence of plans for more publicly owned renewable energy utilities, one might argue, has dissuaded the private sector from investing more heavily in Australia’s renewables industry, particularly in relation to technologies like pumped hydro. And in turn, this nervousness has fed into the hands of naysayers who continue to allege coal’s superiority as a primary energy source.
As Glen Morris has already stated above, Australia has all the necessary resources to become a renewables ‘superpower’.
Josh agrees: “You don’t need coal in an electricity network – most electricity networks don’t have coal in them – so it’s completely false to say that coal is absolutely necessary. Coal is the low-hanging fruit from an environmental standpoint – the reason it’s been there historically is because it’s cheap source of energy, but there are cheaper sources now. It’s horrifying hearing politicians reduce the complexity to slogans like, ‘We need baseload power’, which is both untrue and does not cover the complexity of the issue at all.”
Matthew Wright has the last word regarding next steps, which he summarises as follows:
- Fund the creation of a number of off-river pumped hydro facilities to gauge their true costs – up to 100 might be needed nationally to provide reliable 24/7 base power to the grid.
- Adopt a carbon price, say $25 per tonne, to encourage the uptake of renewables.
- Push for the cap on domestic export levels to be raised to 10 kW.
- Keep rolling out more solar systems to households.
If such initiatives were undertaken with full governmental support, he believes, then Australia could be equipped with 100% renewable energy within 5–10 years.
As far as contractors are concerned, the public acceptance of solar energy is now well entrenched, and falling prices for infrastructure will only serve to enhance future rollouts even if FIT rates decline over time. The big uncertainties, however, are mostly political: will governments provide greater levels of regulatory support for builders of civic-scale renewables? Will policies be developed to quicken the uptake of renewables or will energy generation pricing remain the dominant force affecting the appeal of future investment? These are matters for crystal ball gazers.
One thing is for sure: coal is going the way of the dodo, and renewables have a sunny future.