Climate change, demand, and winds part of the story Andrew Renton - PowerPoint PPT Presentation

Climate change, demand, and winds part of the story Andrew Renton Senior Principal Engineer, WEANZ AGM Wellington October 2019 1

What this paper Is and Isn’t Isn’t Is • The ultimate answer • The issue and system we have • The only solution • Having a Goal • Demand and opportunities • Where we should focus • Are things as big and scary as we think 2

Other Energy Transmission Providers • 60,000 customers • 2,504 high pressure gas transmission • 4,800km low pressure gas distribution • 40 North Island towns and cities 3

We have seen Change before 4

The Issue, 5

The Issue, 6

the system, 7

the target • Carbon neutral energy system • By 2050 • Meeting dry winter • Minimising end consumer impacts 8

Energy Demand • From 44TWh to 75TWh by 2050 • 144PJ to 270PJ 9

DR AFT Various scenarios indicating new supply likely locating near demand growth New Zealand total growth Northland (MW, 2020-2035) Nelson- 64 Peak 1,580 Peak GenM 170 Marlborough GenA 71 41 Peak Generation max. 4,122 150 GenM 63 GenA Auckland Generation avg. 1,944 544 Peak 150 GenM 77 GenA Bay of Plenty West Coast 28 96 Peak Waikato Peak Canterbury 60 GenM GenM 138 194 Peak 1,724 55 GenA Peak GenA GenM 224 GenM GenA 92 GenA 885 2/3rds new gen expected middle/lower North Island Taranaki South 53 Peak Canterbury GenM 330 82 Hawkes Bay Peak GenA 148 GenM 39 Peak GenA 120 GenM 50 GenA Wellington Otago-Southland 104 Peak Central Districts 82 Peak 90 GenM 38 78 GenM 554 GenA Peak GenA 233 GenM 550 10 GenA 231 Wind Gas Geothermal Solar Hydro Different shades of same colour represent different generation assets within the same class

DR AFT Enabling investments to avoid constraints to new supply & demand connections Enabling investments required for ENC medium demand scenario OTA-WKM upgrade Estimated timing: beyond 2035 Investment driver: Demand Indicative investment: $190m Wairakei Ring upgrade Estimated timing: 2025-2030 Investment driver: Supply CUWLP Indicative investment: $210m USI upgrade Estimated timing: 2030-2035 Existing n-1 capacity: 655 MW Estimated timing: Beyond (TWI smelter assumed to Upgraded n-1 capacity: 1500 2035 remain) MW Investment driver: Demand Investment driver: Supply Indicative investment: $900m Indicative investment: $105m Existing n-1 capacity: 660 MW CNI upgrade Upgraded n-1 capacity: 950 Estimated timing: 2030-2035 MW Investment driver: Supply Indicative investment: $240m Existing n-1 capacity: 590 MW Upgraded n-1 capacity: 1130 11 MW

Firming Wind Farm Output 12

Comparison Need Vs Actual 13

High Level Results 14

100% Peak Load Availability 15

Dry Winter challenge 16

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Options to meet the challenge • Renewable overbuild 19

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild 20

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 21

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake 22

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 23

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs 24

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 25

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 2,399hec, NZ$118B, 2,399/35k T tanks 26

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 2,399hec, NZ$118B, 2,399/35k T tanks • H2 electrolysis H2 CH4 0hec, NZ$1.8B, 6 injection facilities 27

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 2,399hec, NZ$118B, 2,399/35k T tanks • H2 electrolysis H2 CH4 0hec, NZ$1.8B, 2.5 injection facilities 28

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 2,399hec, NZ$118B, 2,399/35k T tanks • H2 electrolysis H2 CH4 0hec, NZ$1.8B, 6 injection facilities • H2 electrolysis H2 NH3 29

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 2,399hec, NZ$118B, 2,399/35k T tanks • H2 electrolysis H2 CH4 0hec, NZ$1.8B, 6 injection facilities • H2 electrolysis H2 NH3 190hec, NZ$7.3B, 190/35kT NH3 tanks 30

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 2,399hec, NZ$118B, 2,399/35k T tanks • H2 electrolysis H2 CH4 0hec, NZ$1.8B, 6 injection facilities • H2 electrolysis H2 NH3 190hec, NZ$7.3B, 190/35kT NH3 tanks • H2 electrolysis H2 LOHC 31

Options to meet the challenge 54,824hec, NZ$7.9B, 1013 Turbines • Renewable overbuild • Pumped hydro 12,000hec, NZ$3.5B, 1 Lake • Battery storage 16,842hec, NZ$5.8T, 4.2M/2MW Packs • H2 electrolysis H2 liquid 2,399hec, NZ$118B, 2,399/35k T tanks • H2 electrolysis H2 CH4 0hec, NZ$1.8B, 6 injection facilities • H2 electrolysis H2 NH3 190hec, NZ$7.3B, 190/35kT NH3 tanks • H2 electrolysis H2 LOHC Nett 239hec, NZ$3.1B, 239/35k LOHC tanks 32

Focusing on the most promising Option Option Option NH3 NH3 NH3 CH4 CH4 CH4 LOHC LOHC LOHC Pumped Hydro Pumped Hydro Pumped Hydro Overbuild Overbuild Overbuild Option NH3 CH4 LOHC Pumped Hydro Overbuild Option NH3 CH4 LOHC Pumped Hydro Overbuild Storage Storage Storage NZ$7.3B NZ$7.3B NZ$7.3B NZ$1.8B NZ$1.8B NZ$1.8B NZ$3.1B NZ$3.1B NZ$3.1B NZ$3.5B NZ$3.5B NZ$3.5B - - - Storage NZ$7.3B NZ$1.8B NZ$3.1B NZ$3.5B - Energy Carrier Energy Carrier NZ$1.3B NZ$1.3B NZ$1.5B NZ$1.5B NZ$0.8B NZ$0.8B - - - - Energy Carrier NZ$1.3B NZ$1.5B NZ$0.8B - - Extra Gen Extra Gen NZ$3.8B NZ$3.8B NZ$3.3B NZ$3.3B NZ$3.8B NZ$3.8B NZ$1.5B NZ$1.5B NZ$8B NZ$8B TOTAL NZ$12.B NZ$6.7B NZ$7.8B NZ$5B NZ$8B Option (NPV) NH3 CH4 LOHC Pumped Hydro Overbuild • Why CH4 & LOHC beat Pumped Hydro? They reuse sunk assets Storage NZ$2.3B NZ$0.18B NZ$1.5B NZ$2.2B - • How does this look over time Energy Carrier NZ$0.07B NZ$0.08B NZ$0.04B - - Extra Gen NZ$0.35B NZ$0.31B NZ$0.36B NZ$0.14B NZ$0.75B TOTAL NZ$2.72B NZ$0.57B NZ$1.9B NZ$2.3B NZ$0.75B 33

Focusing on the most promising This is the value of using • Modular and Scalable solutions matching build to need over time • Repurposing existing “Sunk Cost” assets Option (NPV) NH3 CH4 LOHC Pumped Hydro Overbuild Storage NZ$2.3B NZ$0.18B NZ$1.5B NZ$2.2B - Energy Carrier NZ$0.07B NZ$0.08B NZ$0.04B - - Extra Gen NZ$0.35B NZ$0.31B NZ$0.36B NZ$0.14B NZ$0.75B TOTAL NZ$2.72B NZ$0.57B NZ$1.9B NZ$2.3B NZ$0.75B 34

NZ$5-8B is a lot over 20 years but so is annual… • NZ exports NZ$80B • Land transport fuel imports NZ$6B • Roading spend NZ$1.8B • Land transport air pollution NZ$1.4B • Electricity consumption NZ$7.7B 35

Other factors to consider NH3 CH4 LOHC Pumped Hydro Overbuild Positive Moderate Minimal Moderate Large Scale Large Scale Known Tech Known Tech Std Petro chem Established Tech Business as Usual Modular/Scalable Utilises Existing Modular/Scalable Can make Modular/Scalable Enables innovative sustainable pipeline Repurposes existing finance and energy of work assets for export Modular/Scalable Repurposes existing assets Negative Known but not at New Tech Consents Large this sclae Environmental Implications 40m operating range Single large scale 36

Is there a practical solution we can afford? • YES, it will be a mix of Energy efficiency • Demand response • Various Energy Vectors, storage options, type and scale • Modular and scalable • Repurposing existing assets required for H2 Vector economics • Falling storage costs improve dispatchability renewables • • Need for a wider systems view identifying all costs and benefits including wider community and intangibles 37

THANKYOU FOR YOUR ATTENTION • Questions and discussion? • Andrew Renton • Andrew.renton@transpower.co.nz 38