Future Grids in Australia Luke Reedman | PowerFactory Users' - PowerPoint PPT Presentation

Future Grids in Australia Luke Reedman | PowerFactory Users' Conference and Future Networks Technical Seminar 2013 6 September2013 ADD BUSINESS UNIT/FLAGSHIP NAME ENERGY FLAGSHIP

In this talk • Where have we come from • Some recent changes • The next 10-20 years 2 | Future Grids in Australia | Luke Reedman

Where have we come from (last 10 years) Future Grids in Australia | Luke Reedman 3 |

Peak and average demand Source: CSIRO calculations from AEMO data 4 | Future Grids in Australia | Luke Reedman

Electricity generation 250 AUS Principal electricity generation by fuel type (TWh) Wind 200 Solar Oil products Natural gas 150 Coal seam methane TWh Brown coal Black coal 100 Biofuels Hydro 50 0 Source: ESAA (2013), Electricity Gas Australia 2013 5 | Future Grids in Australia | Luke Reedman

Wholesale electricity prices 200 180 160 140 120 NSW QLD 100 $/MWh SA 80 SNOWY TAS 60 VIC 40 20 0 Source: AEMO 6 | Future Grids in Australia | Luke Reedman

Retail electricity prices Sources: ABS 2012, Producer Price Indexes, Australia, cat. no. 6427.0; Consumer Price Index, Australia, cat. no. 6401.0. 7 | Future Grids in Australia | Luke Reedman

Some recent changes Future Grids in Australia | Luke Reedman 8 |

Electricity consumption declining 206 204 202 200 Consumption (TWh) 198 196 194 192 190 188 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Source: ESAA (2013), Electricity Gas Australia 2013 9 | Future Grids in Australia | Luke Reedman

Electricity consumption declining Consumption by NEM State (TWh) 200 180 160 140 TAS 120 SA TWh QLD 100 VIC 80 NSW & ACT 60 Total Consumption 40 20 0 2008 2009 2010 2011 2012 Source: ESAA (2013), Electricity Gas Australia 2013 10 | Future Grids in Australia | Luke Reedman

Possible reasons for NSW Source: Intelligent Energy Systems (2013), IES Insider, Issue No. 14 11 | Future Grids in Australia | Luke Reedman

Solar PV Source: Australian PV Association 12 | Future Grids in Australia | Luke Reedman

Solar PV Solar PV Capacity in Australia 2,500 4 Solar PV Capacity Reduction of Solar Credits 3.5 Multiplier, June 2012 2,000 3 Average PV system size 2.5 1,500 MW kW 2 1,000 Reduction of solar Credits 1.5 End of Solar Bonus Multiplier, June 2011 Scheme, April 2011 1 500 0.5 0 0 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Source: Clean Energy Regulator 13 | Future Grids in Australia | Luke Reedman

Peak demand Source: CSIRO calculations from AEMO data 14 | Future Grids in Australia | Luke Reedman

‘Strong’ La Nina on the east coast Source: Bureau of Meteorology 15 | Future Grids in Australia | Luke Reedman

Electricity generation 250 AUS Principal electricity generation by fuel type (TWh) Wind 200 Solar Oil products Natural gas 150 Coal seam methane TWh Brown coal Black coal 100 Biofuels Hydro 50 0 Source: ESAA (2013), Electricity Gas Australia 2013 16 | Future Grids in Australia | Luke Reedman

Average wholesale prices down Average price ($/MWh) Total Energy GWh Total energy Average price 208,000 60 206,000 50 204,000 40 202,000 30 200,000 20 198,000 10 196,000 194,000 0 2008-09 2009-10 2010-11 2011-12 Source: ESAA (2013), Electricity Gas Australia 2013 17 | Future Grids in Australia | Luke Reedman

Wholesale price spikes subdued 200 175 180 160 140 131 120 Days above $300 120 2008-09 102 100 2009-10 88 2010-11 80 66 2011-12 59 60 48 47 39 37 37 35 34 40 27 22 22 19 20 13 12 12 11 1 0 0 NSW QLD SA VIC TAS NEM Source: ESAA (2013), Electricity Gas Australia 2013 18 | Future Grids in Australia | Luke Reedman

The next 10-20 years Future Grids in Australia | Luke Reedman 19 |

The next 10-20 years • Will electricity consumption continue to decline? • Will peak demand rebound? • What about centralised generation? • More PV? • Prices rising? • What about storage and EVs? • Can retailers keep their customers? 20 | Future Grids in Australia | Luke Reedman

Electricity consumption forecast 260,000 240,000 220,000 Annual energy segments 200,000 180,000 160,000 140,000 Financial year Residential and commercial* Industrial Consumption Transmission Losses Auxiliary Loads Rooftop PV Energy Efficiency Annual energy - as generated Annual energy - as sent out Source: AEMO, National Electricity Forecasting Report 2013 Future Grids in Australia | Luke Reedman 21 |

Electricity consumption growth, some uncertainty 2013 NEFR native annual energy forecasts (10-year outlook - GWh) - NEM 250,000 200,000 Annual energy consumption (GWh) 150,000 100,000 50,000 0 2013 High 2013 Medium 2013 Low Actuals Source: AEMO, National Electricity Forecasting Report 2013 22 | Future Grids in Australia | Luke Reedman

Peak demand rebound Source: AEMO, National Electricity Forecasting Report 2013 23 | Future Grids in Australia | Luke Reedman

Peak demand rebound Source: Bureau of Meteorology 24 | Future Grids in Australia | Luke Reedman

More rooftop PV 2013 NEFR rooftop PV annual energy forecasts (10-year outlook - GWh) - NEM 9,000 8,000 7,000 Annual energy consumption (GWh) 6,000 5,000 4,000 3,000 2,000 1,000 0 2013 High 2013 Medium 2013 Low Actuals 2012 High 2012 Medium 2012 Low Source: AEMO, National Electricity Forecasting Report 2013 Future Grids in Australia | Luke Reedman 25 |

Peak demand and solar PV: market level Source: CSIRO calculations from AEMO data Future Grids in Australia | Luke Reedman 26 |

Peak demand and solar PV: network level Source: SKM (2013), Assessment of Economic Benefits of a National Energy Savings Initiative Future Grids in Australia | Luke Reedman 27 |

Retail prices up some more Source: AEMC (2013), Electricity Price Trends Report 28 | Future Grids in Australia | Luke Reedman

The ‘death spiral’ • Networks have fixed costs because they build capacity ($/kVA) • They recover their costs through energy charges (c/kWh) • If energy consumption falls (e.g., PV, energy efficiency), fewer kWh to recover fixed costs • Creates a revenue shortfall • In the next round, the network charge (c/kWh) has to rise • This feeds through to higher retail prices • This leads to greater incentive to reduce consumption • And so on… Energy pathways | Luke Reedman 29 |

Storage, just around the corner? 30 | Future Grids in Australia | Luke Reedman

Can retailers keep their customers? Source: AER (2012), State of the Energy Market 2012 Future Grids in Australia | Luke Reedman 31 |

Likely investment Percentage of proposed power stations by fuel type (MW) 100% other 90% hydro 80% geothermal 70% 60% solar 50% coal 40% gas 30% wind 20% 10% 0% Source: ESAA (2013), Electricity Gas Australia 2013 32 | Future Grids in Australia | Luke Reedman

More wind, but… Source: Reedman et al. (2012), ‘Quantifying the Impact of Setback Limits on the Possible Deployment of Wind Farms in Australia’, Paper presented at the International Energy Workshop. 33 | Future Grids in Australia | Luke Reedman

Large scale solar coming, PV… 2007 - 305 kW p on Alice Springs Crown Casino 2009 - 1.0 MW p on Adelaide Showground Photo provided by SunPower Corporation 2012 - 1.22 MW p at University of QLD 2013 - 10 MW p at Greenough River, WA Photo provided by First Solar 34 | Future Grids in Australia | Luke Reedman

… can solar thermal fight back? Source: U.S. Department of Energy 35 | Future Grids in Australia | Luke Reedman

What about gas? Comparison of historical Australian domestic natural gas demand forecasts 3000 Natural gas 2009-10 projections 2500 PJ 2000 Natural gas 2010-11 projections 1500 1000 Natural gas 2011-12 500 projections 0 Source: ESAA (2013), Electricity Gas Australia 2013 Future Grids in Australia | Luke Reedman 36 |

CCS and nuclear CCS • Number of technologies being investigated • Delays in timeline • CCS expected to be at commercial scale in 2020 at the earliest Nuclear power • Currently prohibited in some states • No local experience • Lack of community acceptance • Environmental issues and catastrophic risk 37 | Future Grids in Australia | Luke Reedman

New demand: electric vehicles 9 8 Based on vehicle manufacturer projections 7 Based on IEA (2011) 6 5 Million 4 3 2 1 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 38 | Future Grids in Australia | Luke Reedman

The take away • Considerable uncertainty • Demand has changed and will continue to change • More modular centralised supply • Less network build, but still needs spend • Decreasing utilisation needs to be tackled (‘death spiral’ in the extreme case) • Pricing needs to change, challenge is consumer buy-in Future Grids in Australia | Luke Reedman 39 |

Questions? 40 | Future Grids in Australia | Luke Reedman

Thank you Dr Luke Reedman Acknowledgments Stream Leader, Energy Modelling CSIRO Energy Flagship Paul Graham John Ward t +61 2 49606057 Chris Fell e luke.reedman@csiro.au w www.csiro.au/Organisation- Structure/Flagships/Energy-Flagship.aspx ENERGY FLAGSHIP