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Energy White Paper underestimates solar

The 2012 Energy White Paper has much to commend it. In particular, the far greater acknowledgement of the need to shift to clean energy sources is a fundamental shift from previous White Papers. The emphasis…

Australia could soon have millions of small electricity generators. absentmindedprof/Flickr

The 2012 Energy White Paper has much to commend it. In particular, the far greater acknowledgement of the need to shift to clean energy sources is a fundamental shift from previous White Papers.

The emphasis on the need for power demand management, rather than simply meeting peak demand though capital expenditure, is also very welcome.

The energy landscape is changing rapidly. A fundamental change is the extraordinarily rapid decline in the cost of solar energy. Results from the 2012 Australian Energy Technology Assessment of various energy technologies is included. This was a radical departure from previous Government assessments in that it recognised that solar and wind are on track to be low cost, fully competitive energy generation technologies rather soon. The White Paper notes that “few could have predicted the dramatic reduction in solar PV costs that has occurred over the past few years”. The White Paper could perhaps have emphasised more strongly the large implications of this fact for electricity providers.

Rooftop solar generators now produce electricity for less than the retail tariff everywhere in Australia. This could fundamentally change the nature of the electricity business, leading to the establishment of millions of small generators to supplement wind farms and large conventional generators.

There is an urgent need to re-think the national electricity market and infrastructure to take account both of the need for demand management and to cope with widely distributed electricity generation. Changes to distribution infrastructure, tariff structures and the business models of utilities will all be required. Local and central storage will also need to be included as the penetration of solar and wind energy rises above the tens of percent range.

The urgency for amelioration of greenhouse gas emissions becomes ever clearer. The Renewable Energy Target means that up to one-quarter of Australia’s electricity will come from renewables by 2020. South Australia already generates one quarter of its electricity from the wind, and the ACT Government has a renewable energy target of 90% by 2020.

The White Paper mentions a relatively unambitious figure of a 40% share of electricity from renewable energy by 2035. Experience suggests that renewable energy will grow much quicker than envisaged in the White Paper. Aggressive targets for 2030 (50%) and 2040 (90%) should be established to rapidly shift Australia to low emission energy. Fortunately, the rapidly declining cost of solar and wind energy allows such targets to be set with little economic impact.

In summary, the White Paper is a large improvement on previous Government studies with respect to climate change and renewable energy.

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24 Comments sorted by

  1. Michael Wilbur-Ham (MWH)

    Writer (ex telecommunications engineer)

    The Energy White paper said: “few could have predicted the dramatic reduction in solar PV costs that has occurred over the past few years”.

    How many years do we need to wait to read in a White Pater 'Few could have predicted that Coal Capture and Storage would take so long to become practicable and be so costly".

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  2. John Newlands

    tree changer

    There are limits to how much PV we can depend on even if it was free. Dispatchable forms of generation or energy storage have to remain in the background to take over in poor light conditions not only night time but low sun angle and overcast weather. That backup or storage will 'burn' financing and some fuel cost even if it is partly displaced by PV on sunny days.

    The energy white paper suggests that time of use pricing will be our salvation. One unintended consequence may be that PV feed-in…

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    1. Michael Wilbur-Ham (MWH)

      Writer (ex telecommunications engineer)

      In reply to John Newlands

      Does John Newlands deny climate change (in which case there is no need to stop using coal) or does he think slight uncertainty on how to build our power network justifies doing nothing and so condemning future generations to a much warmer world.

      And I thought that the reason for wanting to charge more for peak power is that it is the transmission system which cannot cope with the demand ie nothing to do with solar.

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    2. Zvyozdochka

      logged in via Twitter

      In reply to John Newlands

      "Germany's recent 22 GW output on a sunny day overloaded the system"

      There's no evidence the German's had any trouble on the 25/26th of May.

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    3. Robert Blackham

      Property manager

      In reply to John Newlands

      Solar pv is useful certainly in WA because our power authorities have specifically identified use of air conditioners on the hottest days of summer as the cause of their peak demand problem. But the hottest days of summer, and in the middle of the day, is precisely when solar panels are pumping hardest.
      And even off peak, solar pv is much more predictable and varies more slowly than wind power. So my common sense view is that it shouldn't be that hard to manage a fuel-burning base load system to offset a solar pv contribution. And it doesn't cost our power company any extra because they set their own buy-back rate. (The government subsidy component of the buy-back is a separate issue, not the power company's problem).

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    4. Michael Brown

      Professional, academic, company director

      In reply to Zvyozdochka

      I understand thatHorizon energy has banned new solar installations connecting to the grid in Carnarvon and Broome due to surges causing problems. This seems to be a major issue.

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    5. Grendelus Malleolus

      Senior Nerd

      In reply to Michael Brown

      I'm not sure they have banned new installation - at least their website indicates they are accepting applications - last reference to problems was a vague mention in The Australian in October 2011.

      There are infrastructure problems associated with Solar PV - but this is part of the impact of an emerging market force in micro-generation. It will require technical and policy approaches as well as investment in new infrastructure. These problems will increase if the large carbon based generation companies do not actively engage in the renewable market. In the long term it will be the companies managing the renewables markets that will be the big winners.

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    6. Zvyozdochka

      logged in via Twitter

      In reply to Michael Brown

      It's not interconnected with anything, so "too much" can be input into that isolated grid.

      It is however otherwise driven by diesels, so net CO2 and fuel savings have been substantial.

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    7. Glenn Tamblyn

      Mechanical Engineer, Director

      In reply to John Newlands

      John Newlands
      "In my opinion PV should get no additional support so we can discover where it sits in the mix. "

      I tend to agree with you. I absolutely believe we need to move to renewables big time - the urgency of addressing Climate change drives that need. But with the cost of Solar PV dropping so sharply and wind trending down as well, the looming technical and market challenge is now in energy storage and more adaptable grids. That is now the 'killer application' we need to smooth the transition…

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    8. Grendelus Malleolus

      Senior Nerd

      In reply to John Newlands

      "In my opinion PV should get no additional support so we can discover where it sits in the mix."

      John, governments are certainly heading in that direction. Feed-in tariff in WA is less than the per unit purchase cost by a substantial margin and subsidies from the CW are falling off also. Installations are still happening at a steady rate however - a factor of the market conditions to some extent.

      I would tend to agree that we are nearly (or already - not sure) at the point where the solar PV industry can survive withough market intervention by government on the installation side. Where there might need to be policy and investment is in assisting power companies to develop the infrastructure to support and increasing contribution from solar PV to avoid the very problems you discuss.

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  3. John Newlands

    tree changer

    MWH you might be surprised I've had PV since 2005. I also use wood cooking and biodiesel so I'm not anti-renewables; it's just I can clearly their limits. Compared to PV producing its nameplate rating on a 24/7/365 basis it could be said to be AWOL 80% of the time. In my opinion PV has a justified niche probably under 10% of all generation. I believe the optimum energy mix must include a substantial fraction of nuclear power, say 40%.

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    1. Michael Wilbur-Ham (MWH)

      Writer (ex telecommunications engineer)

      In reply to John Newlands

      And I think that Australia will never have nuclear fission, and that one day perhaps over 50% of our electricity will come from solar (including thermal storage solar).

      As nuclear has recently been discussed almost to death elsewhere on The Conversation I won't repeat my justifications for my being against nuclear.

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  4. Andy Rusty

    logged in via Facebook

    The price of anything is affected by government subsidies. The higher the subsidy the higher the price of the item. e.g.. insulation, set top boxes for the elderly, housing with first home owners grants, solar power. No that the government grants have come off or drastically lowered the price of the subsidised item has come down; no surprise here.

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    1. Grendelus Malleolus

      Senior Nerd

      In reply to Andy Rusty

      Andy that is an interesting point that triggered of a cascade of thoughts for me. The rant that follows is in no way directed at you - but at the authors of the White paper.

      I am not sure if you can demonstrate cause-effect here rather than a correlation. Governments intervene in markets for many reasons - in this case I think the initial intent was a policy approach designed to grow what was a small market for domestic solar PV installations for the purpose of increasing uptake of renewables…

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    2. Dianna Arthur
      Dianna Arthur is a Friend of The Conversation.

      Environmentalist

      In reply to Grendelus Malleolus

      “few could have predicted the dramatic reduction in solar PV costs that has occurred over the past few years”

      That statement hit me as somewhat misinformed, well actually, as completely fatuous. Anyone observing the trends of technological development could predict quicker, faster, smaller, more efficient and cheaper such as we have in computer technology are starting to achieve with motor vehicles and other commodities. Renewables still lagging behind.

      I recall arguing with an ex-manager over 15 years ago that wind and solar would become far more available to the average consumer than it was back then and, hey, I was right.

      Imagine if all the subsidies that are still being paid to the fossil fuel and nuclear industry were instead provided to renewable energy tech.

      Sigh.

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  5. Peter Sommerville

    Scientist & Technologist

    "Rooftop solar generators now produce electricity for less than the retail tariff everywhere in Australia".

    An interesting statement. I have a PV system on my roof that is sized with a theoretical capacity roughly 4 times my consumption. Of course this theoretical capacity is notional, given the variability of the output of the system over a daily cycle. Nevertheless I am a nett generator, and will accumulate credits courtesy of the system which generates more than I need in the daytime, and exports…

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    1. Robert Blackham

      Property manager

      In reply to Peter Sommerville

      I think it is also important to recognize the context: "Rooftop solar generators now produce electricity for less than the retail tariff everywhere in Australia" was certainly not true when the generous subsidy schemes were operating three years ago. Those schemes have now been phased out, as the market has changed.
      Another item the White Paper might be underestimating is the spread of plug-in electric cars. I suspect they will soak up all of the under-utilised off-peak capacity of generation equipment that exists today (well before 2020), and will be the driver of new installations beyond that. Solar power will be very little help in re-charging commuter cars. If every second house in the street plugs in a battery car, the new peak will be 8pm to midnight. Inevitably the political process will be slow to realize the need and shortages and restrictions will have to happen.

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    2. Michael Wilbur-Ham (MWH)

      Writer (ex telecommunications engineer)

      In reply to Robert Blackham

      Electric cars might be the solution to managing Green power not the problem.

      After all, an electric car is a giant battery that can be charged when there is excess power and even used to provide power to the grid when needed.

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    3. Chris O'Neill

      Victim of Tony Abbotts Great Big New Tax

      In reply to Peter Sommerville

      I'm not saying it's not possible but for home roof-top solar generators to charge electric cars, the electricity needs to be transmitted from the homes to wherever the cars sit during the day (which normally isn't at their homes of course). Hopefully this will happen sometime.

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  6. Robert Blackham

    Property manager

    Re: Chris O'Neill "...for home roof-top solar generators to charge electric cars, the electricity needs to be transmitted from the homes to wherever the cars sit ..."
    Not a problem Chris. In a well-equipped car park the car is buying power, and at home the solar panel surplus is being sold back to the network. There will be a differential in the prices to pay for the infrastructure. If you are retired or work from home and can leave your car plugged in to your own system all day, that's a bonus.

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  7. Gerard Dean

    Managing Director

    So, 'South Australia already generates one quarter of its electricity from the wind.' The pity is that poor old South Australia is only just ahead the poor little basket case to my south, Tasmania.

    Unfortunately renewables energy, excluding hydro, is still below 5% of the total energy use in Australia.

    I just wonder how things would look if we turned off the fossil fuel now- mass starvation and civil unrest and collapse just like Zimbabwe.

    However if the author's statement is true: 'Rooftop…

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    1. Peter Sommerville

      Scientist & Technologist

      In reply to Gerard Dean

      I like it Gerald. Actually SA has te highest wholesale price in the country - in part a consequence of the state's wind generation and the preferential treatment it receives. Once you subsidise markets you distort markets with outcomes you may not expect.

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  8. david leitch

    research analyst

    The price of polysilicon has halved over the past year in $US terms and is 25% of what it was two years ago. Only part of the installed cost of course.

    The piece that even solar advocates are still grappling with is the change in battery costs and technology.

    The other missing piece is the investment that will be required in the grid to deal with suburb level voltage spikes.

    The industry has yet to get to grips with out the new grid will be funded and paid for and even exactly what it will look like. Electricity is going through a significant period of disruptive technology change right now. No doubt about it.

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