Tagged with renewable energy

Renewables are getting cheaper all the time – here’s why

The stars are aligning for Australia to transition to 100% renewable electricity. Our fossil fuel infrastructure is ageing, which means we will soon need to invest in new power generators. New technologies such as battery storage could revolutionise long-standing business models. With care, the transitions away from fossil fuels could offer greater job opportunities.

Our latest research, which corroborates previous work, shows the technology already exists to solve many of the remaining questions around technological capability. For instance, the fact that wind and solar don’t generate electricity when the wind isn’t blowing and the sun isn’t shining can be dealt with by installing a network of diverse generators across a wide area, or by increasing our use of energy storage.

generators

One of the biggest remaining barriers to transition is cost. But this is also rapidly changing. Much work is going into reducing the cost of renewable energy, including the latest funding announcement from the Australian Renewable Energy Agency (ARENA) of A$92 million for 12 solar projects.

The cost of renewable energy is highly variable across the world and even within Australia. The picture is not simple, but it does help to start by looking at the big picture.

Average capital costs of constructing new wind, solar PV and ocean/tidal generators are already lower than equivalent coal generation infrastructure.

Research suggests that, overall, the cost of moving to 100% renewable energy is not significantly higher than the cost of hitting a lower target.

The capital cost of investment in renewable energy generation technologies is also falling rapidly. In its 2014 report on global renewable power generation costs, the International Renewable Energy Agency (IRENA) showed that the total cost of installation and operation over a lifetime of small-scale residential PV systems in Australia has fallen from US$0.35 to US$0.17 per kilowatt-hour between 2010 and 2014.

In part this has been because of reduced installation costs, together with our exceptional abundance of sunshine.

But the capital cost of building generation infrastructure is not the whole story. Once the generator is built, operations and maintenance costs also become important. For most renewables (biomass excluded) the fuel costs are zero because nature itself provides the fuel for free.

Other costs that we must consider are variable and fixed costs. Fixed costs, such as annual preventative maintenance or insurance, don’t change with the amount of electricity produced. Variable costs, such as casual labour or generator repairs, may increase when more electricity is produced.

The variable costs for some renewables (biomass, hydropower and large-scale solar PV) are lower than coal. For other renewable technologies they are only slightly higher. Fixed costs for almost all renewable technologies are lower than for coal.

We also need to think about costs beyond individual generators. The vastness of our Australian continent is a bonus and a challenge for building 100% renewable energy.

It can be used strategically to give a 100% renewables supply reliability by using an interconnected network of generators. For instance, it may be very sunny or windy in one region. Excess electricity produced in this region can fill a gap in electricity demand in less sunny or windy places elsewhere.

But this also poses challenges. To take advantage of the reliability that a highly distributed renewable electricity system can provide, we must also consider the costs associated with expanding the transmission network.

Read more.

Why sharing may be future of energy

Two years ago, NSW solar installer Geoff Bragg had a vision. “Imagine a system where one customer could sell energy to another customer, via the Distribution Network Service Provider, who ‘clips the ticket’ for transferring the energy,” he wrote in an article published on RenewEconomy in March 2014.

“Anyone with a smart meter could join the market as a buyer or seller,” Bragg wrote. “…If that sounds difficult to do, remember this is an IT and accounting exercise (the physics is sorted already). Think about peer-to-peer file sharing… It would be a piece of cake for a handful of the right IT boffins.”

Fast forward to September 2016 and Bragg is working on turning that vision into some sort of a reality.

His company, New England Solar, and local real estate group Paragon Property Partners are co-developing a unique project near the NSW regional city of Armidale that offers buyers the chance to not only build their dream home from scratch in the NSW northern Tablelands, but to become part owners of their own power company: a purpose-built embedded network through which to buy and sell the solar generated on the community’s rooftops – and stored in its batteries – peer to peer.

Launched to the local community last Thursday, the project, called Lingerwood, comprises 10 neighbouring properties of 5 acres each on which buyers can build the architecturally designed smart home of their choice.

Bragg says the solar and battery storage systems used across the development will vary in brand and capacity from house to house, depending on each household’s particular needs or wants.

The smart meter technology – which is being custom-made for NE Solar by some of those IT boffins Bragg had imagined, in this case who are “pretty well connected with the ANU” – will be uniform throughout the development. And the data they collect will be sent out to a third party that will process it and do the billing.

The embedded network assets, meanwhile, that enable the electrons to flow between households, will be community-owned, effectively making them shareholders in a utility.

That “utility” will comprise a 200kW transformer installed on site, connected to the Essential Energy distribution network via a main switchboard and ‘gateway’ smart-metering point.

Each household will then be supplied via underground sub-mains to supply pillars, located on community land adjacent to each house lot. This behind-the-meter network is connected to each house via 10 separate smart meters.

These shared assets will be managed by the Lingerwood “community entity”, a mechanism along the lines of a body corporate that will contract with a yet to be determined local “renewables friendly” electricity retailer, to supply the gateway with energy as needed, and credits for exported clean energy.

The ultimate aim, however, is for the households to be largely energy autonomous, relying on the embedded network – and perhaps the wider grid in periods of inclement weather.

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In time, all cars will be electric, driverless and running on renewables

Speculation about the future of transportation, like common flu, appears to be contagious. Not a week goes by without another celebrity, business guru or executive predicting that future of transportation is electric.

That, you may say, is probable and not newsworthy. What is newsworthy is that many of the same people are predicting that the transition is likely to be at a pace much faster than many had expected.

In July 2016, for example, Virgin Group founder Richard Branson was quoted as saying that he suspected that 15 years from now every car on the road would be electric. Chances are that he made up the number – 15 years – without giving it much thought. One can also assume that he was talking about new cars sold in 15 years, not all cars on the road.

That, of course, is what makes Branson Branson. He was talking to CNN at a Formula E race, which he was attending to support the Virgin Racing team. He said, “Formula E is pushing the boundaries forward into what will be the future.

Fifteen years from now, I suspect every car on the road will be electric.” He went on to elaborate: “If governments set the ground rules — and they sometimes have to be brave and set positive ground rules — and for instance said, ‘more than 50% of cars must be battery-driven in 10 years and 100% in 15 years,’ we could make that happen.

Currently, roughly 1 million EVs represent a mere 0.1% of the total number of passenger cars in the world. Oil majors need not panic yet. Nor can they afford to be complacent. That, however, does not prevent people from making bold projections. A report released by Lux Research in July 2016 (graph below) says 30% of the world’s – we assume new vehicles sold – will be EVs by 2030, powered by renewable energy.

Not the sort of message oil company executives like to hear or talk about. Tony Seba, a Silicon Valley guru on emerging technologies is equally certain about the rapid disruption about to hit the $12 Trillion energy and transportation sectors. He claims the disruption is happening as we speak, yet dismissed by many insiders in both the oil and auto industry.

Seba says the tipping point may come as early as 2020 when new EVs will be cheaper than comparable internal combustion engine (ICE) cars. By 2025, he says all new cars will be electric and not just in Silicon Valley, or California, or the US but globally.

Pointing to Elon Musk’s recent announcements, Seba believes Tesla is already on its way to deliver affordable EVs with decent range and superior More EVs and running on renewable energy by 2030 5 September 2016 EEnergy Informer Page 5 performance, to be charged with solar energy from customers’ rooftops.

Musk spelled out his vision of the future of Tesla and it is decidedly disruptive. Describing his master plan for merging Tesla and SolarCity – reported in Aug 2016 issue of this newsletter – he seems intent to dominate the autonomous vehicle and car-sharing business.

When it comes to charging all these EVs, Musk plans to “create a smoothly integrated and beautiful solar-roof-withbattery product that just works, empowering the individual as their own utility, and then scale that throughout the world.” As for Musk’s vision of charging the EVs with rooftop solar panels augmented with batteries in the garage, Tesla will face competition from others, including the utility companies.
Read more.

People power is the secret to reliable, clean energy.

Reliable Clean Energy

Australia’s energy watchdog, the Australian Energy Market Operator (AEMO), has issued a stark warning: more wind and solar power will demand new approaches to avoid interruptions to electricity supply.

In its annual Electricity Statement of Opportunities, released this week, AEMO indicated that the overall outlook for reliability has improved. So far, so good.

However, South Australia, Victoria, and New South Wales are potentially at greater risk of interruptions within ten years if the current trend of shutting down old coal-fired power stations accelerates, as we can expect from Australia’s efforts to meet national and international climate targets.

The threat of power blackouts is reliable headline fodder as seen in yesterday’s Australian Financial Review. But the solution to this very real challenge is not to cling to ageing fossil fuel power stations.

While there is much excitement about battery technology, it is the oft-forgotten human dimension that offers the greatest potential. We consumers, the so-called “demand side” of the market, can play a crucial role in reducing the strain on the electricity network, which will in turn make for more reliable power.

The biggest variability that the electricity sector has to contend with is not intermittent solar or wind generation output, but the ups and downs of power demand.

People power

Helping business and household consumers manage their demand for power (or “demand management”) is a win-win scenario – lower costs for electricity and a stronger electricity system. Demand management and energy efficiency are key elements in lifting Australia’s energy productivity. Lifting energy productivity means we do not need to slow down the transition to a low-carbon economy.

Research from the University of Technology Sydney’s Institute for Sustainable Futures (ISF) that supported GetUp!’s Home-grown Power Plan highlights that we can not only retire coal power to achieve our climate targets, but also shift entirely to 100% renewable electricity generation by 2030.

Switching up

The importance of demand management has been recognised since the dawn of the National Electricity Market in 1992. But this potential has never been properly tapped.

Happily, there are signs that this is finally changing. For example, the Australian Energy Regulator has announced a process to design a Demand Management Incentive Scheme. This will provide an incentive for electricity networks to help consumers reduce demand and cut energy costs.

Read more.

Renewable energy fund: QIC, Future Fund back AGL

renewable energy fund

Renewable Energy Fund QIC and the Future Fund will tip $800 million

Renewable energy fund: Queensland Investment Corporation and the Future Fund are set to become major players in the race to meet the renewable energy target, backing a $2 billion-$3bn fund with diversified energy group AGL that will build up to a fifth of the new capacity needed.

QIC and the Future Fund will tip $800 million into a fund that plans to build 1000MW of new wind and solar farms along the east coast in a deal that breaks a long-running deadlock between investors and energy retailers.

AGL chief executive Andy Vesey said the fund, to be announced today, will have $200m of equity from the company as reported by Andrew White.

He said it would be backed by power purchase agreements (PPAs) from AGL that would underwrite returns and aim to stimulate the development of new capacity.

The balance of funding will come from banks to provide levered returns in the fund.

“We are taking down the road blocks one by one and the fund basically shows that there is appetite from quality investors and that we can show that by people bringing equity, there is debt willing to come in,’’ Mr Vesey said.

The deal is a breakthrough for the renewable energy industry, with the Abbott government’s review of the RET in 2014-15 stalling new investment and electricity companies unwilling to provide the 20 year-plus power purchase agreements developers and investors say they need to underwrite new projects.

The industry estimates $10bn needs to be spent building another 5000MW of capacity to meet the 2020 compromise target agreed between the government and Labor last year. If it hits its targets the Powering Australian Renewables Fund could end up building a fifth of the new capacity required and owning 10 per cent of ­Australia’s renewable energy generation.

It will be seeded with AGL’s existing 102MW Nyngan and 53MW Broken Hill solar plants, with the balance of the fund to come from new developments.

Renewable energy fund projects

A decision on the first new project is expected by March next year. QIC, whose involvement was first flagged in the DataRoom column last month, will invest the money for the Future Fund and other clients in its global infrastructure fund.

QIC’s head of global ­infrastructure, Ross Israel, said the deal was a breakthrough for the $70bn investor, which had been looking for a way to get into the renewable energy market in the scale required for a major institution.

“Having those plants in Queensland and NSW provides us with diversification in wind and solar as well as geographic spread, and the PPA with AGL makes it attractive for us in the long term at a time of disruption in the energy market,’’ Mr Israel said.

The PPAs will run for just five to seven years, with Mr Vesey ­saying he was unwilling to risk AGL’s balance sheet on longer agreements when he did not have matching contracts from customers on the other side.

“The kind of people who could cover those would be my non-residential and commercial customers and they tend to churn very highly, so it is very hard to write a contract like that,’’ Mr Vesey said. To read more click here.

Renewable energy fund will be discussed at The National Sustainability in Business Conference; renewables, markets, innovation, opportunities and capital will be held 23 – 24 March 2017 at the Hotel Grand Chancellor, Brisbane.

To express your interest in the Conference CLICK HERE.