Guest essay by Eric Worrall
What do you do if your catastrophic renewables policies cause power spot price spikes up to $14,000 / MWh ($14 / KWh)? What happens when your green pride is more important than providing affordable, reliable coal power to the people whose interests you claim to represent? You double down and throw more money at useless green technology, of course.
Adelaide charges ahead with world’s largest ‘virtual power plant’
AGL project to roll out 1,000 battery systems to homes and businesses will operate like a 5MW plant, and optimise energy produced from solar panels.
Adelaide will be home to the world’s largest “virtual power plant” – AGL is rolling out 1,000 battery systems to homes and businesses, with backing from the Australian Renewable Energy Agency (Arena).
AGL and Arena say the project will improve network security and dampen a volatile wholesale electricity price in South Australia. However, an energy expert says that at the current size, the system will have a minimal impact on network security or wholesale prices, but might pose a challenge to the revenues of companies that own the poles and wires.
Offered to homes and businesses with solar systems, the $20m AGL project, backed with $5m from Arena, will operate like a 5MW peaking power plant, providing power to homes and businesses during periods at optimal times.
The chief executive of AGL, Andy Vesey, told Guardian Australia: “The beauty of the project is it’s being done over 1,000 batteries, and that’s how we deliver an aggregate benefit to the grid itself.
“But for the consumer, it will have the value of the battery. And it’s being priced at a way that a good investment decision could be made. We’re viewing that the average savings for someone who has rooftop solar right now would be $500 a year. It’s really a way of optimising the energy produced out of their solar panel.”
The system will cost $3,500, and AGL estimates it will take about seven years for solar customers to recover the costs.
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Dylan McConnell, from the Melbourne Energy Institute at the University of Melbourne, said that at 5MW, the project would not have a significant impact on the the state’s reliance on gas or on the interconnector.
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The net effect of this waste of $3.5 million is minimal protection for 1000 homes or businesses, from the intermittency of unreliable renewables.
According to the Australian Bureau of Statistics, there were 459,000 households in Adelaide in 2006. Using this number implies a cost of $1.6 billion to roll this scheme out to all households – without even considered the cost of protecting industrial users, some of whom are very heavy users of energy.
What will it take to restore energy sanity to Adelaide, and the South Australian Government? All this economic damage, financial waste and energy policy posturing is happening because the greens who run the South Australian government can’t bring themselves to admit their renewables policies have failed. They can’t bring themselves to admit they cannot live without gas backup, and they most definitely cannot live without the cheap Victorian coal power at the other end of that precious interstate interconnector.
“that advanced car batteries”
Is that code for more expensive that do not work any better?
This may be too obvious but you don’t select a battery type based on portability for a fixed installation! Car batteries are crafted for high energy density per unit of mass. Mass is irrelevant if it is sitting on your garage floor.
The big lithium battery bolts onto the wall? What the heck for? Why stick a honking great battery on the wall when it can sit on the floor under a bench?
If you want to store a lot of power buy a second hand submarine battery. I once talked to a HAM operator in the Congo who ran his whole house on one (1) such battery.
You don’t build a fixed-in-place peak load battery system on technology developed for drones. Get real!
On the farm in the 50’s we had a whole shed full or lead acid batteries charged from an old diesel generator. Very little demand. Refrigerator was cut lake ice under sawdust and a root cellar. Heat was wood. Lighting was mostly kerosene lamps or naptha lanterns and candles. Electricity use was minimal, and generally when company was about. Seems like we are going backwards by 60+ years.
“On the other hand there’s home powerstations with used 4cyl ford motors running standby going by heat exchange from exhaust gas.”
That what I do with my big block Chevy V-8 in the motor home. Going down the road in winter, my home and hot water is heated off the radiator.
Of course it is not economical.
I’ll wager that chief executive of AGL, Andy Vesey, will see a huge benefit to his income is less than seven years.
We’re viewing that the average savings for someone who has rooftop solar right now would be $500 a year.
How? Any excess peak power is now paid at a bonus rate over the normal rate and generating income for the solar owner, if this power is diverted into a battery it will be used during the normal and off-peak period costing the owner money.
@RACook
“No, I’m going to disagree with you there. ”
So you are saying there was excess generating capacity? Did you watch the situation on a daily basis while working for a company doing or did you get your info from wiki?
The Cali energy czar pointing a finger at companies investing in Cali was S. David Freeman, GM of LA dept of water and power. Before that he was GM of Sacramento Municipal Utility District closing their nuke plant. The man is a very slick liar.
Who had excess power to sell, how much did the sell for into the CAISO? The biggest gouger was S. David Freeman and LADWP.
I did not work for ENRON. I worked for a competitor. Our volume was much smaller but our EBIT was about the same. We made a profit by carefully selecting projects and delivering value to customers.
The nuclear and engineering services part of the company I worked for was sold so I ended up with my career with a different company. As a matter of disclosure, a significant part of my retirement portfolio is in stock of the original company.
No, not “excess” generating power. There was not enough.
ENRON made the problem WORSE by using that restriction in generation capacity to artificially FORCE (reroute) large and unpredictable current loads through transmission lines restrictions and switchyards. THAT created local underloads, overloads, and shortages. THAT then played the spot market for electrical power across the region. BUT, because Enron controlled the switchyards and transmission lines, they could predict ahead of time where the spot market was going to durge (have higher short term prices) and where it would drop – have more power than was locally needed (and so have locally lower prices than the average reginoal market.
Buy low (below the average market price for electricity) and create a market where you can instanteously take that sudden surplus of the same product and “sell high”? That is how they made their money – by the reslling of the local surplus markets to the local shortages.
What you described is / was not a “market.” Blaming Enron operators for the massive failure (or rather revelation) of CA deregulation (anything but) and grid mismanagement is much like blaming bankers for the massive failures (or rather revelations) occurring in 2007-08 (and before) under the constant scrutiny of central bankers and scads of agencies with hundreds of thousands of agents, employees, and contractors.
“BUT, because Enron controlled the switchyards and transmission lines,”
RACook could you be more specific?
ENRON was not a California utility. CA ISO controlled the controlled the California grid, BPA in in the PNW.
My experience interfacing with grid is before deregulation. Sometimes we would need the load dispatchers permission to run a test. Load dispatchers would interface with other utility load dispatchers.
Later, I worked for one of the largest US utilities (built more nuke plant than the entire state of California). I had to very accurate weather forecasts. Power companies did not predict load changes by calling the flake at the local TV station. We designed and built our own nuke and coal plants. Because of deregulation we bought a large natural gas company Like ENRON because that industry had already been deregulated. Moving natural gas around would be a big part of competing the power industry. We controlled the power plants, transmission lines, gas pipelines, built 40% of new CCGT power plants and captured 50% of GE’s CCGT production line. We also cofounded a marketing trading exchange. We had cell tower business lines, internet business lines, and water treatment system business lines. All those things utilities do.
The point is that it is very complicated.
ENRON was a natural gas pipeline company. They bought a small Oregon utility to get into the power marketing business. Epic failure.
One reason for failure is ethics. Power is a public service. We are making electricity for our neighbors. Deregulation may increase the number of neighbors you have but violating trust is bad for business. Second is experience, my company had been excelling at building and operating power plants for a hundred years.
Third is picking new markets. California was ripe because it was easy to do a better job than California utilities except ENRON did not have that experience. My CEO was asked at a company meeting why were were not building power plants in some of the big markets in other countries. He tacked fully said that uncertainty in the legal systems for enforcing contracts was good reason to go slow. ENRON lost billions.
At the time, I did not jump up and ask what we were doing in California. Next time California has an emergency of their own making and needs power, there will be a chorus of show us the money. The only winner in the Cali energy crisis were the lawyers. My company did not do too bad because just like we are better operating power plants, our lawyers are better too. However, we left California because we like making power more than fighting in court.
My point is that I think ENRON was small potatoes and was just an easy target.
On a personal note, I got a call about partnering with ENRON on the Stateline wind farm which would have been the second and biggest wind farm in the PNW. I advised against it and we did not participate. ENRON shareholders paid for it, and two VP scammed it as a small business selling renewable energy to a military base in California. Both served time in a federal prison.
RACook would win a debate based on what is reported by journalists. My opinions on this are based on random observations and analysis. ENRON did not control the grid.
Retired Kit
With deregulation it is even more complicated. With grid inter-ties the complexity is an order of magnitude greater as each utility is constantly looking for the lowest priced power. Highly computerized and beyond my limited comprehension.
British Columbia, for example, is often a net importer of power because it can buy power cheaper than it can produce it even though it has lots of capacity. Sometimes while BC is buying cheap power from south of the border, they export power to Alberta and make money on the differential. Many industries have also discovered they can produce power cheaper than buying it by using their waste streams (sawmills, pulp and paper, wood processing, petrochemical plants). Utilities are buying some industries excess power. So instead of industry being a power demand, some have become a power source.
South Australia; The home of the person who caused Australia’s worst IT disaster.
The watermelons are getting more desperate by the day and using any means they can to shut down their critics-
http://www.msn.com/en-au/news/australia/bolt-reacts-to-being-called-%E2%80%98hyperbolic%E2%80%99-with-typical-considered-calm/ar-BBvnm9i?li=AAavLaF&ocid=spartandhp
Bodies like ACMA are typically stacked with the usual suspects nowadays and although they knew enough not to get into an ugly debate over the facts, they nevertheless took the opportunity to slime Bolty to justify themselves to their watermelon fan base. US readers with an enshrined Constitutional right to free speech would be rightly disgusted that an anonymous complainant can effect that sort of Kangaroo Court, all on the taxpayer dime. They can hide behind their infiltrated institutions in this manner with their dodgy science, but in the long run their prescriptions like SA ‘s increasing reliance on wind energy will find them out. Just a matter of the other States following their lead and exposing their lunar fallacy of composition.
I was involved inan AGL focus groupon this policy. What was clear was that AGL was not going to pay for the batteries. They were looking for suckers who would.
seven years for solar customers to recover the costs.
Yeah, right. And I have some swampland to sell……
Provided that aren’t taxpayers too.
Well, they could always try pump storage in the Outback.
@Wayne
“British Columbia, for example, is often a net importer of power because it can buy power cheaper than it can produce it even though it has lots of capacity.”
I am a little surprised by that considering the amount of hydro in BC. It would not surprise me if coal generated power goes north to BC in the winter.
South Australia sails close to the wind again-
http://www.wattclarity.com.au/2016/08/another-day-where-lor2-notice-issued-for-sa-what-does-it-mean/
Notice how the southern State capitals of Perth, Adelaide, Melbourne and Hobart (plus Canberra) are all sharing similar winter temps as the top of the winter Antarctic lows track across the bottom of the continent from West to East and lotsa folks are belting their reverse cycle aircons.
sorry here for temps-
http://www.bom.gov.au/australia/majorcities.shtml
@ur momisugly Retired Kit P
“@ur momisuglyWayne
“British Columbia, for example, is often a net importer of power because it can buy power cheaper than it can produce it even though it has lots of capacity.”
I am a little surprised by that considering the amount of hydro in BC. It would not surprise me if coal generated power goes north to BC in the winter.”
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You may not see this as the page is dated, but since 2001, BC is a net import of power about 50% of the time.
There are detailed explanations of this on one of the regulatory sites that I don’t have at hand at the moment but if I recall correctly, it has a lot to do with the spot price of electricity which is a constantly moving target.
Maybe I’ll repost next time I see your name.
Things are not always what they seem.
http://bcstats.gov.bc.ca/StatisticsBySubject/ExportsImports/Data/ElectricityTrade.aspx