RISC’s Joe Collins speaks to Energy News; “Highway robbery warning”

Friday, 5 August 2016

Anthony Barich

STATES that go too hard, too fast on renewables while eroding traditional baseload generation sources such coal and gas are setting themselves to be at the mercy of highway robbery when renewables inevitably fall short, RISC Advisory told Energy News.

As debate lifted up a peg this week about the impact of rising levels of renewables on the grid, new analysis from RISC suggests that while the cost of a megawatt of wind power is only slightly more than a megawatt of coal-fired power, the cost to the overall average price of electricity in the grid tends to be much higher due to the intermittent nature of renewables.

RISC’s principal development engineer Joe Collins, who authored the report Gas can help WA avoid SA’s power woes, said grid problems such as power instability and reliability of generation spring up when the proportion of intermittent and unreliable energies are increased into the mix.

“This inevitably leads to higher costs one way or another because investment is needed in gas and coal-fired generation which is only online for small periods of time to settle stability and provide reliability,” Collins told Energy News.

“Or it causes issues with what we had in South Australia, where you have this interconnector system to another electricity system, and they pass on the cost of their highest electricity generation to you when you require it.

“They’re incentivised to provide electricity to you when you need it, but of course they’re going to charge the absolute maximum they can get away with to do so.

“So it’s not so much the actual power cost for a megawatt of wind energy that’s at issue, it’s the cost to the overall mix of your energy when you introduce too much renewable – or any form of intermittent or unreliable generation – into your system.”

That said, the current debate, particularly in Western Australia but raging in the eastern states which is facing a shortage of gas, is on the means rather than the end.

“The debate we’re having in Australia and WA is around how much renewables should be put into our grid, when I think the correct debate should be ‘what do we want to reduce our emissions to, and how do we best do that with the least disruption to the system we currently have and at the lowest possible cost to the consumer’,” Collins said.

“That’s the whole point of everything we’re doing. We’re not putting renewables into the grid because it makes us feel good, we’re doing it because it reduces carbon emissions.

“I don’t think that’s 100% wind energy. I think it’s a mixture of energy forms promoted in different ways and brought online in the right way at the right time.”

To help make renewable energy more reliable, battery storage is possible at both a residential and large scale, but Collins believes the cost is still significantly higher than that of having a gas-fired generator as a reserve at the same capacity, ready to inject power when required.

He says companies working on battery storage technology need to get their costs down to under $100/megawatt hour of storage capacity before they can become competitive with the “rolling reserve” scenario with coal or gas, and can replace them.

“How long that will take depends on how you interpret the cost curve, which has clearly come down in recent years but is now starting to plateau,” Collins said.

“The roll-out of large-scale battery storage is likely to be at least 10 years away, because it’s a minimum of five years before the cost becomes competitive then it will take a period of time for people to start investing and go down that path.”

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