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Thursday, December 15, 2011

Energy Strategy

Peak Demand

A recent Queensland government report estimates that the installation of a 2 kilowatt (electrical input) reverse-cycle air conditioner imposes costs on the energy supply system as a whole of up to $7,000 when adding to peak demand. 
(From the Executive Summary of the Draft Energy White Paper 2011 - Strengthening the Foundation for Australia's Energy Future launched on 13 December 2011 by the Minister for Resources, Energy and Tourism, Australia.)
"...Network and generation capacity is built to provide a very high level of reliability under peak demand, even when this additional capacity may only be used for a fraction of the time. For example, in 2008–09 in Victoria, about 25 per cent of network capacity was used for only 10 days. ..."  (From chapter 6C of the Draft Energy White Paper 2011 - Strengthening the Foundation for Australia's Energy Future)

Demand Response Management

A cheaper solution to under-utilised electricity supply infrastructure is to do away with the concept "base load demand" and add "discretionary demand".

For example, it may be less expensive to idle an aluminium refinery for a few hours a year instead of paying for electricity supply infrastructure that is only used for a few hours a year.

The US has introduced "Negawatts" to pay bidders to REMOVE demand in peak periods, instead of paying to increase electricity supply that is rarely needed.

For more on the "Negawatt":  FERC: Negawatts on a Par with Megawatts March 16, 2011 POWERnews
"The Federal Energy Regulatory Commission (FERC) yesterday established a new rule that puts demand response (DR) on a par with power generation. The rule requires organized wholesale energy market operators to pay DR resources the market price for energy, known as the locational marginal price (LMP), when those resources have the capability to balance supply and demand as an alternative to a generation resource and when dispatch of those resources is cost-effective...."
Update Monday, June 18, 2012 -

Source: Michael West, Sydney Morning Herald, June 16, 2012

Power play set to spark bill shock

It is no small irony that although the cost of electricity is rapidly rising, demand is actually falling. Economics 101 would suggest prices should fall when demand falls.

But when it comes to the supply of power, there is a flaw in the regulatory framework that leads to a "gold-plating" of the grid, the poles and wires that make up the network.

In NSW for instance, where consumers will be hit hardest, network upgrades will constitute 60 per cent of the total rise in electricity costs. The carbon tax is often painted as the villain in the piece, and that will hurt too, but network upgrades are the big offender.

Wholesale prices, meanwhile, are the same as they were 12 years ago.

The "gold plating" - something rejected by TransGrid last month when we put it to them - arises because the network providers make a margin on the size of their asset base.

The more they spend on their assets, the higher is the dividend they pay the government each year.

And they are proposing to spend big. TransGrid expects to expand its asset base by 24 per cent at a cost of $2.6 billion over the next five years, a cost that will drop straight into consumers' electricity bills.

There is nothing official yet but it is reasonable to surmise the NSW government may face a conflict of interest here.

Efficiency and Electricity Infrastructure Cost Burdens

Large electricity consumers have long-term fixed-price contracts. There are two adverse results.
  1. These consumers have no incentive to increase efficiency.
  2. Infrastructure costs are being shouldered by other consumers.
This issue is discussed further at The Great Carbon Tax Distraction that expands on the following survey findings -
  1. 40% of businesses that took part in an industry survey in December 2010 reported a DECREASE in electricity prices relative to the CPI over the last 5 years.
  2. Larger companies were more likely to experience no electricity price increases or reductions in electricity prices.
  3. More than 60% of businesses reported NO IMPROVEMENT in energy efficiency over the last 5 years.
The effect of energy efficiency  measures taken by domestic electricity consumers in New South Wales has led to an unprecedented decline in demand - (From: Unprecedented Increase in Energy Efficiency, August 15, 2011)
"It is the first time Ausgrid, which provides power to much of New South Wales, has seen a fall in demand since the 1950s.

The fall is expected to lead the national electricity market body, the Australian Electricity Market Operator, to forecast overall cuts of 5 to 6 per cent in demand in the next decade - the first cuts in living memory.

The slashing of demand forecasts is expected to result in little need for more large-scale power stations until the end of the decade, until 2020, at the earliest. The drop in demand forecasts has increased pressure on the government to curtail capital spending by state-owned electricity companies."

Renewable Energy - Intermittent and Despatchable

The ability to deliver renewable energy when it is needed and not just when the wind is blowing and the sun is shining is discussed in these recent articles - 

Lack Of Storage Hurting Energy Revolution, EARTHJUSTICE, December 8, 2011
"Currently, America's transmission grid—the power lines and electrical equipment that bring us electricity—has very few devices that store power from renewable clean energy sources such as solar and wind. This is hindering the deployment of these energy sources and limits their usefulness."
Will Energy Storage Play a Big Role in the Electric Grid?, Scientific American, November 22, 2011
" is considered vital to help intermittent renewable resources, such as the wind and sun, play a bigger role in U.S.—and global—energy supply..."
Draft Energy White Paper 2011 - Strengthening the Foundation for Australia's Energy Future launched on 13 December 2011 by the Minister for Resources, Energy and Tourism, Australia. (at Chapter 7)
"...Noting the multi‐decade focus of this draft Energy White Paper-
The best case supporting future consideration of nuclear power would be the failure to commercialise new low emissions baseload energy or energy storage technologies within the timeframe that economic analysis suggests is necessary to meet long‐term global and national emissions reduction objectives (from 2025 onwards). "

Using Solar Energy 24 hours a day ("Baseload" Solar Energy)

Plants Store Solar Energy

For example, a pine plantation and a sugar cane crop store solar energy while they are growing.

After harvesting, timber and sugar are separated leaving considerable "waste" mass with embodied solar energy.

Concentrated solar thermal energy can then be added to the "waste" mass, converting it to synthesis gas.

ALL of the energy stored in this synthesis gas is RENEWABLE SOLAR ENERGY.

It can be used to generate "baseload" electricity 24 hours a day, on demand.

See the related post Discussion of Electricity Prices