Energy – is there light at the end of the tunnel? Andrew Reddaway Alternative Technology Association August 2017
Agenda • Who is the ATA? • Grid tariffs – what’s the future hold? • Renewable projects for farms etc. • What should households do? Alternative Technology Association
Who is the ATA? • Over 6400 members and 14 branches • Events & community engagement • Policy & consulting projects • International projects
Who is the ATA - Publications published since 1980 Energy efficiency, renewable energy, electric cars, retrofitting homes, recycling and reusing DIY projects Published since 2005 Sustainable homes case studies including house plans and spec sheets Alternative Technology Association
Your bill No choice. Energy charges Fixed charge Solar feed-in (exports to grid) Alternative Technology Association
Where does your money go? Retail margin Retail Wholesale costs energy Network Green Charges schemes • NSW: higher network costs. • Vic: higher retail margin. Source: http://www.aemo.com.au/-/media/Files/Electricity/NEM/Planning_and_Forecasting/EFI/Jacobs- Retail-electricity-price-history-and-projections_Final-Public-Report-June-2017.pdf Alternative Technology Association
National Electricity Market (NEM) • Longest grid in world. • Distribution lines extend further than Transmission transmission lines, and lines cost a lot more. • Sized for peak demand (eg air conditioning) • Other grids in WA, NT, Mount Isa etc. Alternative Technology Association
Network returns are regulated • Natural monopoly. • 13 distributors in the NEM, different areas. • Regulator approves network tariffs 5-yearly. • Tariffs allow for regulated return on investment – low-risk business. • Businesses have fought regulator decisions in court. https://www.aer.gov.au/news-release/federal-court-judgement-on-aer-electricity-and- gas-price-decisions-disappointing-outcome-for-nsw-and-act-consumers Alternative Technology Association
Energy: Wholesale prices • Separate prices by state. • Vary each half-hour. • Can be volatile – Range from negative to eyewatering ($16/kWh) – Intentional feature to incentivise peak supply. • Retailers pay generators. – Many retailers own generators, to manage risk. • “Energy - only” market set up in 1998. – Other designs exist in other countries. Alternative Technology Association
Wholesale prices doubled recently June 2017 https://www.aer.gov.au/wholesale-markets/wholesale-statistics/quarterly-volume- weighted-average-spot-prices Alternative Technology Association
Why the price increase? • Old coal-fired power stations can generate cheaply, as they were paid off ages ago. • Hazelwood closed, short notice (1,600 MW). • Supply has become tight. • It’ll take a year or two for new renewables to cover the gap. • Gas-fired stations are currently filling the gap. • Gas has become very expensive recently. – Due to gas exports from QLD to overseas. Alternative Technology Association
Gas: exports vs domestic Exports http://forecasting .aemo.com.au/ Electricity generation Industrial Residential & Commercial Alternative Technology Association
Renewables: New capacity Rooftop solar: 6,000 MW Nearly all (Not shown on chart) renewables since 2012 Coal closing https://www.aer.gov.au/system/files/AER%20State%20of%20the%20energy%20market %202017%20-%20A4.pdf Alternative Technology Association
Where’s the plan? The NEM has no coordinated, long-term plan. • Power stations can close without notice. • Market forces are expected to incentivise companies to invest. • AEMO produces “Statement of opportunities”. • Climate policies are disjointed add-ons. • Changes to market rules can take years. Alternative Technology Association
Renewables accelerating • In 2017, another 4,100 megawatts of wind and solar farms will be under construction or completed*. Plus rooftop solar. • Cheaper than coal and gas, and costs reducing further, according to many sources inc. AGL**. • Little incentive for companies to add energy storage, or services for grid stability. * https://www.cleanenergycouncil.org.au/news/2017/May/2billion-renewable-energy- investment-2017-unprecedented.html ** https://www.agl.com.au/-/media/DLS/About-AGL/Documents/Investor- Centre/Presentation-and-speech----A-future-of-storable-renewable- energy.pdf?la=en&hash=79A44C65B8D4D1469B8AD04B9C61CAA64C9CD117 Alternative Technology Association
Who’s running the show? Tough to answer that! Plus commercial http://www2.pv.unsw.edu.au/videos/Penelope-Crossley- companies. 3September2015/slides/Crossley-NEM-presentation.pdf Alternative Technology Association
Alan Finkel on planning "A long- term, integrated grid plan is required... “ "The lack of a transparent, credible and enduring emissions reduction mechanism for the electricity sector is now the key threat to system reliability." "In future, there may be merit in the creation of a single, national transmission planner with a whole- of-system focus .” http://www.environment.gov.au/energy/publications/electricity-market-final-report Alternative Technology Association
What’s the future hold? • We expect more turbulence, – Until the politicians cooperate on a proper plan. • Electricity prices may moderate as more wind and solar is built. • Then may increase again when the next coal-fired power station closes. Alternative Technology Association
Renewable Energy Opportunities for farms etc Costs have dropped fast for solar panels and large wind turbines. Many opportunities, eg: • Dedicated solar water pumping for irrigation. • Grid-connect solar to cut electricity bills. – Eg food processing. • Off-grid solar system for buildings. • Heat for greenhouses. Alternative Technology Association
Solar water pumping Vic winery, river up to dam. No grid nearby. • NEW 30 megalitres per year, 100m head. – Only allowed to pump 8 months of the year. • 20 kW (27 HP) electric pump, 100mm pipe. • Solar system rated at 40 kW (~150 panels). • Special pump controller, but no batteries. – Variable Frequency Drive. • Total cost to winery ~ $150k. • Ongoing costs are minimal. Alternative Technology Association
Solar water pumping NSW cotton farm 70 kW Solar Cut diesel bill 60% Qld peanut farmer, centre-pivot irrigation Alternative Technology Association
Solar water pumping WA centre pivot Over 400 panels Cost $300k Eliminates diesel cost < 5 year payback Alternative Technology Association
Grid-connect solar, cut bills • Analyse consumption from smart meter. • Estimate electricity bill savings from solar. • Feed-in tariffs are now decent: 11.3 c • Need approval to connect (eg Powercor). Vic potato farmer: ~ 90 kW solar 200 HP pump, cool store, packing sheds. Electricity bills halved. Alternative Technology Association
Grid-connect solar, cut bills • WA’s largest pork producer. • Already has 360 kW solar, cutting bills 15%. • Adding 1.8 MW wind generation • Adding batteries Alternative Technology Association
Grid-connect solar, cut bills Aboriginal community in WA • 30 kW solar • Financed via loan for 5 years • All household bills reduced ~ 20%. Alternative Technology Association
Off-grid for buildings Need many panels, compared to grid-connect. Need big batteries and generator for backup. Example of costs: • Household using 10 kWh per day (low-ish). • Not compromising lifestyle. • $50k for whole system. Alternative Technology Association
Off-grid for buildings Trust For Nature station near Mildura. Upgrade from previous system. Total cost: $75k • Batteries rated 62 kWh • 50 panels (13 kW) Alternative Technology Association
Heat for greenhouses Sundrop farms in SA, tomatoes for Coles • Solar tower collects solar heat • $200 million build • Support from CEFC • 23,000 mirrors • 39,000 kW power • Desalinates water • Heat greenhouses • 15,000 tonnes/yr Alternative Technology Association
Heat for greenhouses 40 hectares of glasshouse near Stawell. • Paired with new 63-turbine wind farm next door. • Hydroponic vegetables for Costa Group. • 34,000 kWh batteries. • $220 million build. • Vic govt support. • Heat greenhouse using heat pumps (like reverse cycle AC). Alternative Technology Association
What should households do? • Expect more turbulence, in the absence of political miracles. • Shop around for good energy plan. • Rooftop solar is very worth it: bigger is better. – Batteries still for early-adopters (for now). • Plan for appliance replacement & electric cars. – Gas is no longer a cheap option. – Cheapest heating option is a split-system aircon. Alternative Technology Association
What about other options? • Saving electricity is often cheaper than generating it! • Energy efficiency includes: – Insulation – Draft sealing – LED lights – Window shading – Double glazing – Efficient appliances – etc. Alternative Technology Association
Questions? Andrew Reddaway Energy Analyst andrew@ata.org.au Alternative Technology Association
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