Port Augusta to finally get solar thermal power – for a greenhouse

RenewEconomy reports that Port Augusta has finally landed a solar thermal power plant - Port Augusta to finally get solar thermal power – for a greenhouse.

The South Australia city of Port Augusta may be a long way from getting the solar thermal power station it craves, but it may soon host a world-leading technology that uses solar thermal energy to power a huge greenhouse to grow food in the desert.

Sundrop Farms, which has built a pilot station (we wrote about it here) featuring its unique technology that uses solar thermal energy to desalinate water for irrigation, and for heating and cooling, has secured finance from the Clean Energy Finance Corporation to build a 20 hectare commercial greenhouse around 10kms south of the city.

The massive greenhouse will feature concentrated solar power technology – most likely a parabolic trough array that will deliver around 36MWth (megawatt thermal) of energy. This will make it the largest stand alone CSP arrays in the country. The overall project cost has not been revealed but is believed to be at least $100 million. It will employ more than 200 people.

Port Augusta has been fighting to have its ageing and polluting coal-fired power stations replaced by concentrated solar thermal technologies to produce electricity.

The 20-hectare greenhouse facility will produce over 15,000 tonnes of tomatoes a year for metropolitan markets across Australia, and the company hopes it will be the fore-runner of many more projects in Australia and other desert regions, particularly in the Middle East and north Africa.

The technology is similar to that featured in another project in Qatar that RenewEconomy reported on last year. Indeed, SunDrop advised on that technology. But while that Qatari project was funded with development funds from Norway, the Port Augusta project will be funded on a commercial basis.

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The great de-electricifation of Australia

The Conversation has a post on dropping electricity demand in Australia - caused by a combination of rising power prices, the demise of large manufacturing users (courtesy of the dutch disease) and the success of the government's roof insulation program and various rooftop solar PV schemes - Electricity demand: The great de-electricifation of Australia’s grid

One of the certainties in the energy business used to be the regular year-in, year-out rise in demand for electricity [1].

Up until about 6 years ago, demand growth could be counted on with metronomic precision. Across our National Electricity Market – the NEM – electricity demand grew at about 2% annually.

That all stopped in 2008. On the basis of the numbers for June and July this year, we are on the verge of our twelfth straight season where demand has reduced on the year before.

Over the last 3 years, the annualised demand reduction has been about 500 megawatts – or about 2.2%. And since the peak in 2008, average demand has reduced by about 2 gigawatts or about 8%.

On these figures, Australia is clearly undergoing a profound de-electrification. If it continues for a few more years then, by analogy with economics, it will be worthy of the appellation the great de-electrification.

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Australia revisits transnational natural gas pipeline

Platts' "The Barrel" blog has an interesting post looking at the history of natural gas pipeline proposals in Asutralia, including the last plan to pipe gas from the Northern Territory to the eastern states (which face an impending shortfall now most of the coal seam gas being extracted is destined to be sent offshore in the form of LNG), which the gas potentially coming from both offshore fields and shale gas projects in the dead heart - Australia revisits transnational gas pipeline.

Australia is no stranger to the idea of transnational or even international pipelines when it comes to solving the vexed issue of getting enough gas to its eastern seaboard, home to its biggest cities.

Australia currently has two separate gas pipeline networks in the west and east of the country which supply markets of around 1 Bcf/day and 1.6 Bcf/d respectively. A much smaller, also separate, network in central Australia services the Northern Territory capital of Darwin. ...

The latest proposal for a transnational interconnection between Australia’s pipeline networks was initially aired in recent months by former Chief Minister of the Northern Territory Terry Mills, as part of his efforts to secure the future of Rio Tinto’s alumina refinery at Gove. In February, just before being ousted in a party room coup, Mills secured a deal under which Gove would be supplied with gas from Eni’s Blacktip offshore field, heralding a project which would include the construction of a A$500 million pipeline to the plant. ...

That call has now been taken up by Australia’s largest pipeline operator APA Group, manager of 14,120 km of pipeline infrastructure. One of APA’s assets is the 1,600 km Amadeus Basin to Darwin gas pipeline, which was the world’s third-longest when it was completed in 1986 at a cost of just A$380 million. ...

A raft of international oil and gas industry heavyweights have taken a foothold in northern and central Australia’s nascent shale sector over the past few years. Companies including Chevron, ConocoPhillips, Statoil, Total and BG Group have secured farm-in agreements and pledged investments of more than $1.55 billion in Australian shale, according to the US Energy Information Administration. The EIA has estimated that Australia has 437 Tcf of technically recoverable shale gas reserves, ranking the country sixth highest in the world.

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Australia’s largest concentrated solar power plant officially launched

RenewEconomy has an article on Silex's CPV (Concentrated Solar Photovoltaic) power plant at Mildura - Australia’s largest concentrated solar power plant officially launched.

Australia’s largest concentrated photovoltaic (CPV) solar power plant was officially opened today, with the Victorian energy minister joining executives from the plant’s developer, Solar Systems, to cut the ribbon on the 1.5MW demonstration facility in Mildura.

The demonstration of the “dense array” solar technology of parent company Silex Systems is a fore-runner for what is expected to be a 100MW power plant, with construction slated to begin in 2014. Another 1MW demonstration plant is being built in Saudi Arabia, with hopes of further development as that country pushes into the start of a $100 billion solar spending program

The array – whose 40 CPV dishes have been feeding power into the national grid for almost a month, after their successful commissioning began in April – collects sunlight in more than 100 curved mirrors and focuses it onto ultra-high efficiency “mulit-junction” PV cells; technology originally developed by Boeing to power satellites.

Silex CEO Michael Goldsworthy says the cells currently boast efficiency rates of around 43 per cent – about double that of today’s best silicon-based cells and up to four times the efficiency of thin film solar cells – but he hopes this can be lifted to more than 50 per cent, or even 60 per cent, with further research.

The technology also uses ‘active cooling’ technology to maximise power output while minimising water consumption and prolonging the technology’s lifespan.

Last June Silex predicted that the levelised cost of energy (LCOE) for its technology could fall below 10c/kWh ($100/MWh) within a few years – making it cost competitive with a range of technologies such as wind and large-scale solar PV, and below the cost of new gas- and coal-fired generation.

While PV solar in it's various forms has dominated the solar power market in recent years, it seems solar thermal power is still attracting some interest, with a Vast Solar pursuing a plant in western NSW - Plans for Forbes solar thermal project

A solar thermal project near Forbes will demonstrate how cost effective renewable energy can be once its development application is approved. Three-and-a-half thousand moving mirrors, each bigger than a plasma television, will follow the sun like a field of sunflowers. The mirrors will reflect light onto five thermal receivers sitting on towers that will heat a central steam turbine, capable of producing 1.1 megawatts of electricity.

The company behind the project, Vast Solar, already has 700 mirrors and one tower at Jemalong Station. ... The company’s plan is to use a method called air condenser cooling.

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High costs drive Australian LNG projects offshore

The SMH has a look at an emerging trend in WA to consider floating LNG plants rather than onshore LNG plants - High wages drive LNG projects offshore.

The rising cost of building liquefied natural gas plants in Australia, where energy workers earn the highest salaries in the world, is forcing developers out to sea in search of billions of dollars in savings.

Exxon Mobil plans to use the world's largest ship to turn gas into liquid at an offshore field, eliminating the need for investment in pipelines and port facilities. Woodside Petroleum is studying sea-based technology since ditching plans this month for an onshore plant for its Browse project off Western Australia. After starting work on $175 billion in LNG terminals on land, developers are considering more than $80 billion in floating projects to keep Australia competitive with suppliers in North America and East Africa.

''A lot of people have been saying Australian LNG is now over, it's going to be priced out of the market by US LNG exports and competition from Canada and East Africa,'' said Citigroup analyst Mark Greenwood. ''In our view, we are going to see continued investment in Australia, just a different sort.''

The engineering challenges are massive. Shell's Prelude vessel, vying to be the first floating LNG facility in the world, will be as long as the Empire State Building and six times the weight of the largest aircraft carrier. Exxon proposes a vessel spanning 495 metres, or seven metres longer than the Shell plant.

Australian oil and gas workers earn about $160,000 a year on average, 35 per cent more than employees in the US and almost double the global average, according to a survey this year by recruiting company Hays and Oil and Gas Job Search.

Floating LNG may be almost 20 per cent cheaper than building a project on land for Woodside and its partners in the Browse project, including Shell. Using three offshore vessels to produce the gas would cost an estimated $35 billion, compared with a cost of $43 billion for a new development on land, John Hirjee, an analyst for Deutsche Bank, wrote in an April 12 report. That's a cost of $2.92 billion per million metric tonnes of output for a floating LNG project producing 12 million tonnes a year, compared with a $3.58 billion cost for a conventional plant.

Of the 90 million tonnes a year of new projects that need to be approved globally in the next three years to satisfy LNG demand by the end of the decade, as much as a third may come from proposed floating LNG plants and expansions of onshore developments in Australia, he said.

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Australia’s Liquid Fuel Security

The NRMA has issued a report on Australia's fuel security - Australia’s Liquid Fuel Security (pdf).

As the world’s ninth-largest energy producer, Australia has abundant renewable and nonrenewable energy resources. Despite these resources, we are heavily dependent on imports of refined petroleum products and crude oil to meet our liquid fuel demand.

This import dependency has increased in recent years.

Our transport systems are wholly oil dependent. The reasons for this dependency may be economically sound due to the relative lower cost of oil but the lack of fuel diversity significantly impacts our resilience if we experience supply interruptions or a reducing availability of affordable oil supplies in the future.

The very small consumption stockholdings of oil and liquid fuels in Australia, combined with what appears to be a narrow assessment of our fuel supply chain vulnerabilities, does not provide much confidence that the strategic risks to our fuel supply chain are well understood and mitigated by our nation’s leaders, the business community or the population at large.

In essence, we have adopted a “she’ll be right” approach to fuel security, relying on the historical performance of global oil and fuel markets to provide in all cases. Unfortunately, as a result of our limited and decreasing refining capacity, small stockholdings and long supply chains, our society is at significant risk if any of the assumptions contained in the vulnerability assessments made to date prove false.

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Summer on the NEM: What the extreme heat didn’t do to demand

While it's been hot this summer you wouldn't be able to tell from slumping electricity grid demand (courtesy of a pleasingly large takeup of solar PV in recent years) and probably helped along by the government's efforts to push solar hot water and roof insulation a couple of years ago- Summer on the NEM: What the extreme heat didn’t do to demand.

With a run of recent summers of below par temperatures, energy pundits have been eagerly awaiting a good summer heat wave to see just how our electricity system would stand up. The big question was what would happen when all those newly installed air conditioners finally got ramped up, once the the la Nina cycle broke and we got a good roasting? Would a return to hotter conditions finally break the trend of declining energy demand over the last four or five years?

Well it looks like we got the summer that would answer these questions, and the answers are no doubt causing a fair bit of head scratching amongst the pundits.

Since the last hot summer in 2010, our electricity system has seen a lot of changes. For one thing, almost 2 gigawatts of distributed generation has been added in the form of domestic solar PV. To put that in context, 2GW represents a touch under 10 per cent of average summer demand, though of course solar PV only produces at near maximum levels for a few hours in the middle of a sunny summer day. However, when solar PV is producing it takes away from the demand for electricity that otherwise would be dispatched across the poles and wires via our National Electricity Market – or NEM.

So with this summer just past setting new records for extreme heat, it’s a good time to point the summer sun on the NEM and see how it is standing up.

With blistering summer heat, particularly across New South Wales and Queensland, there was an expectation we might see new records in peak demand. But despite the weather and the supposed new air-conditioning load, the NEM doesn’t seem to have been pushed very hard at all during this last summer.

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Climate trends create an angry summer

The SMH pints to a new report from the Climate Commission on this summer's record heat - Trends create angry summer.

''Statistically, there is a one in 500 chance that we are talking about natural variation causing all these new records,'' said Will Steffen, the report's lead author and director of the Australian National University's climate change institute. ''Not too many people would want to put their life savings on a 500-to-1 horse.''

The statistic comes from tallying known weather records from around the world, and measuring the likelihood of record-breaking extremes happening without the influence of extra energy accumulating on Earth due to the build-up of greenhouse gases.

''We are talking about a massive amount of additional energy, most of which is being held around the surface layers of the ocean, which is driving the increased evaporation and rainfall,'' Professor Steffen said.

The tumbling of records has also prompted conversations in the scientific community to turn a corner, he said. Previously, ''weather is not climate'' was the mantra, but now the additional boost from greenhouse gases was influencing every event.

''I think the steroids analogy is a useful one,'' Professor Steffen said. ''Steroids do not create elite athletes - they are already very good athletes. What happens when athletes start taking steroids is that suddenly the same athletes are breaking more records, more often. We are seeing a similar process with the Earth's climate.''

This summer was the hottest on Australian record. In the 102 years of uniform national records, there have been 21 days where the continent averaged more than 39 degrees, and eight of those took place this year. Rainfall extremes have smashed records, with rain contributing more to floods and less to watering crops. The effects have continued into autumn.

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A Convergence Of Interests ?

SP at TOD ANZ has an interesting conspiracy hypothesis about the Chinese purchase of Cubbie Station cotton farm and the massive need for water the booming coal seam gas industry has (invoking the ghost of Russ Hinze along the way) - Sinogetically stuffing the basins?.

Pulling a few strands months apart together, is there a link between Paul Sheehans story (below) about how the expansion of Coal Seam Gas production is going to impact water availability for downstream food producers with last years agreement to sell Cubbie station to a Chinese consortium (now completed).

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Renewables now cheaper than coal and gas in Australia

ReNew Economy has a look at a new study from BNEF showing that renewables are now cost competitive with fossil fuels in Australia - Renewables now cheaper than coal and gas in Australia.

A new analysis from research firm Bloomberg New Energy Finance has concluded that electricity from unsubsidised renewable energy is already cheaper than electricity from new-build coal and gas-fired power stations in Australia. The modeling from the BNEF team in Sydney found that new wind farms could supply electricity at a cost of $80/MWh –compared with $143/MWh for new build coal, and $116/MWh for new build gas-fired generation. These figures include the cost of carbon emissions, but BNEF said even without a carbon price, wind energy remained 14 per cent cheaper than new coal and 18 per cent cheaper than new gas.

“The perception that fossil fuels are cheap and renewables are expensive is now out of date”, said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head,” he said.

RNE also has an article on a Greens WA proposal to move to 100% renewables, drawing on work from Sustainable Energy Now and Beyond Zero Emissions - Greens push 100pct renewables plan for W.A..

The Greens Party has unveiled an ambitious new document that outlines possible pathways to turn Western Australia – one of the most energy-intensive states in the world – into one where its stationary energy needs are powered 100 per cent by renewable energy sources in less than two decades.

The Greens offer two principal scenarios to transform the coal and gas-dependent grid known as the South West Interconnected System (SWIS), which includes the capital Perth and the most populous regions. The first involves a heavier reliance on solar thermal and storage technologies currently deployed in Spain, the US and elsewhere, while the second relies more on currently cheaper technologies such as wind energy and solar PV. Both are supported by bio-mass and pumped hydro.

According to Scott Ludlam, the WA-based Senator whose office anchored the report with the help of specialist consultants, the plan seeks to make two important points – one that it is feasible, and two, it will not cost much more than business as usual (BAU).

Indeed, even using somewhat conservative technology cost forecasts for the various forms of solar, and to allow for a safety-first approach to capacity requirements, the study concludes that the levellised cost of electricity in the various renewable scenarios ranges from $208/MWh to $221/MWh by 2029. (We go into detail further down)

The levellised cost of electricity in the BAU case is not much cheaper – $203/MWh. While it has lower up front capital costs – $20 billion vs $60 billion, the balance of the BAU scenario bill will be paid in fuel costs, which for gas and diesel customers in WA is already proving expensive and forcing those on isolated and remote areas in particular to already consider solar alternatives. ...

The document was drawn together by Ludlam’s team, but the detailed technology scenarios were put together by an engineering team from Sustainable Energy Now, and drew on previous work by the likes of CSIRO and Beyond Zero Emissions.

RNE also has an interesting article on the impact of solar PV on peak power demand in South Australia - dramatically dropping summer peak demand from the grid - Rooftop solar reshapes energy market in South Australia.

Rooftop solar continues to have a dramatic impact on the energy market in South Australia – the Australian state with the highest penetration of rooftop solar.

As these graphs provided by Melbourne Energy Institute’s Mike Sandiford illustrate, the proliferation of solar PV is not just having an impact on overall demand in the state, it is also shaving and reshaping the peak demand curves.

The impact of solar PV in South Australia was recognised by a special study by the Australian Energy Market Operator last August. As we reported then, South Australia had some 267MW of rooftop solar as at June 30, representing one in five households. AEMO said rooftop solar was accounting for 2.4 per cent of overall demand, and more than one-third of the PV systems were operating at the time of peak demand at any one time.

These graphs deliver a further illustration of their impact, as they illustrate what happened in the latest months of December and January, traditionally the period of hottest temperatures and highest demand. (If the graphs are not easy to read we suggest you click on them to see them better).

The ones immediately below show the average demand curves in South Australia over the last five years. The pink line shows 2012/13. As Sandiford points out, midday demand in SA this summer is down 15 per cent on where it was five years ago, even though night-time demand is up, confirming the impact of solar PV.

One last article from REN, this one looking at the big picture for renewables - 100 pct renewables: it may be closer than we think.

The stunning set of data, cost profiles and market analysis produced in the first few weeks of calendar 2013 have confirmed what many had long suspected – that the global energy markets are changing faster than anyone had thought possible.

The implications for the incumbent energy industry – be they generators, network operators or retailers – couldn’t be more significant. The business models that supported the ageing infrastructure are broken, and if they can’t adapt to the new environment, they may soon be out of business. The idea of a rapid change to a largely renewable energy grid no longer seems aspirational, it could be inevitable.

Consider what we have learned this week:

- The price of wind energy (and in some isolated cases solar PV), is already cheaper than coal and gas in Australia. This gap is likely to widen considerably in the coming decade.

- By the time new baseload capacity is required in 10 years time, other technologies, including solar thermal with storage, and concentrated solar PV, will also be cheaper than coal and gas. Marine energy and geothermal could be close to parity.

- But not only do we have “grid parity” at the utility level, we also have socket parity, which means that homeowners and businesses can lower their cost of electricity by installing solar panels on their roof.

- the growing impact of large scale renewables, the self consumption market driven by rooftop solar and battery storage, and the impact of energy efficiency schemes, is reshaping the profile of the energy market and the dynamics of the industry. Sometimes in the most dramatic way. Coal and gas fired generators are getting priced out of the market.

As investment bank UBS noted last week, we are facing a “solar revolution” in the energy industry, and another is on the way with battery storage. As we suggested last year, the change is so profound that existing business models appear broken. According to Macquarie Bank, the German energy model is already “kaput”.

As we have seen in Australia, the increase in renewables is pushing down wholesale electricity prices, forcing the closure or mothballing of 3,000MW of fossil fuel capacity. In Germany, the closure rate is so rapid that the electricity authority has had to step in to slow them down.

The more retailers and network operators seek to recoup their investment in the face of lower demand, the more customers will be tempted to look after their own energy needs. Even halting all subsidies for rooftop solar will not stop it, said Macquarie. “The ever-increasing (grid) prices for domestic and commercial customers as well as rapid solar cost declines have brought on the advent of grid parity for German roofs. Thus, solar installations could continue at a torrid pace,” it notes. The same applies for Australia. ... Coal-fired power stations will not get built, for reputational and economic reasons, and gas – the much touted transition fuel – may also not get a look in. “Costs are just falling so quickly and the cost of fossil fuel are so much higher than public perception,” said Kobad Bhavnagri, head of clean energy research for BNEF in Australia. ”We could leapfrog gas as transition fuel.”

Bhavnagri said that by 2020 the “world could look quite different”. The market operator and system will be more experienced and adept at handling intermittency. “The case for gas is not as strong as people assumed a few years ago.”

The upshot of that analysis is that the plants we will be building in the 2020s will be – because they are the cheapest options – large scale solar with storage and other dispatchable renewables. The economic case for existing fossil fuel generators will be further undermined.

This explains why the fossil fuel industry in Germany, and in Australia, have been trying to halt the expanse of renewables. The primary policy goal of generators and fossil fuel industry for the past decade or more has been one of delay – to push back the build up of renewables long enough to extract maximum value from their existing assets, and even to create space so they can build more assets. The extractive industries have the same, simple plan.

All the major Australian utilities made clear in their submissions to the Climate Change Commission that allowing the renewable energy target to stand – and more wind farms and large scale solar PV to be built – would reduce the profits of their generators, quite dramatically. Yet diluting that target would allow them to build more gas-fired generation.

This is also why the utilities have also argued against the Clean Energy Finance Corporation, because it is designed to help usher in those technologies such as solar thermal and ocean energy that will be competitive in a decade’s time. But they can’t be competitive if none are built, and installation and manufacturing costs are reduced.

Many European markets are now at critical junctures with high penetration of wind and solar. This includes Germany, Italy, Denmark, Spain and Portugal. Australia, should it maintain its current renewable energy target, will follow soon enough. Germany, while reducing subsidies, is still increasing its renewables targets – 40 per cent by 2020 and 80 per cent by 2030.

Its biggest challenge is to figure out how to redefine the market rules so that it can provide enough economic incentive to prevent too many closures of fossil fuel plants, and to encourage existing gas to stay open rather than coal. It needs these gas plants to assist with the transition.

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Gas industry rattled by findings of triple normal levels of methane emissions

ReNew Economy has a report on research that may result in a massive tax bill for the coal seam gas industry - Gas industry rattled by findings of triple normal levels of methane.

LEVELS of the potent greenhouse gas methane have been recorded at more than three times their normal background levels at coal seam gas fields in Australia, raising questions about the true climate change impact of the booming industry.

The findings, which have been submitted both for peer review and to the Federal Department of Climate Change, also raise doubts about how much the export-driven coal seam gas (CSG) industry should pay under the country’s carbon price laws.

Southern Cross University (SCU) researchers Dr Isaac Santos and Dr Damien Maher used a hi-tech measuring device attached to a vehicle to compare levels of methane in the air at different locations in southern Queensland and northern New South Wales. The gas industry was quick to attack their findings and the scientists themselves.

The Queensland government has already approved several major multi-billion dollar CSG projects worth more than $60 billion, all of which are focussed on converting the gas to export-friendly liquefied natural gas (LNG).

More than 30,000 gas wells will be drilled in the state in the coming decades and the industry has estimated between 10 per cent and 40 per cent of the wells will undergo hydraulic fracturing.

The industry and state and federal ministers have claimed that electricity derived from coal seam gas will help slow growth in carbon emissions but, so far, no comprehensive independent lifecycle assessment of emissions has been carried out.

Last August, a Right to Information request submitted by me and reported in the Brisbane Times revealed that the state’s government was prepared to rely on industry-funded research when it came to understanding the industry’s carbon footprint.

A later report from the Australian Petroleum Production and Exploration Association, which looked at emissions from CSG when burned for electricity in China, was produced by Worley Parsons, a company which had won a $580 million contract to work on a major CSG-to-LNG project in the state.

The Federal Energy Minister Martin Ferguson has also waved away suggestions that the government should commission its own independent research into CSG emissions, and was reported as saying such a study was “unnecessary”.

The work at Southern Cross University is arguably the first attempt to independently measure levels of methane coming from gasfield areas.

Dr Santos said in a university release: “The current discussions on CSG are often based on anecdotal evidence, old observations not designed to assess CSG or data obtained overseas. We believe universities are independent institutions that should provide hard data to inform this discussion. The lack of site-specific baseline data is staggering.”

In an interview with the Australian Broadcasting Corporation, Dr Maher said while it was not possible yet to say “definitively” that the raised levels of methane were due to leaks from the CSG facilities, “we have multiple lines of evidence to suggest that that is what is causing it”. He said the initial findings pointed to the CSG operations as a likely source of the raised methane levels – in particular, from “fugitive emissions.

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The Empire Strikes Back ? Gross Feed In Tariffs

Giles Parkinson at ReNew Economy has an interesting article on the attempts by some utilities (or at least by the regulator in Queensland, presumably at the prompting of the new conservative government) to retain profit margins in the face of large scale consumer uptake of solar power, proposing "gross feed in tariffs", where consumers are charged retail prices for all their consumption (including the power they generate themselves) while only paying the wholesale price back to the consumer for the power they generated themselves - How solar PV is turning utilities against consumers.

It the solar industry ever harboured any illusions about the challenges it is facing in imposing itself on a sector that has been virtually unchallenged for more than half a century, then they were certainly shattered by a series of attacks on their industry from utilities and pricing regulators over the last few weeks.

It is now clear – if it wasn’t before – that Australian energy utilities are moving decisively against the proliferation of solar PV in an attempt to protect their revenues and business models, as we predicted they would back in June. This is the claim of the solar industry, and they point to numerous examples of tariff changes, network impediments and the lobbying and influence over regulators.

Last week’s revelation that the Queensland pricing regulator was contemplating a tariff that could effectively kill the attraction of solar PV to households struggling under the weight of rising prices from the grid, was proof enough. The attempt by TRUenergy to bring a halt to the deployment of both wind and solar – citing the potential of both to cripple the conventional energy industry – is a further sign of the desperation of those utilities struggling to adapt.

There is no doubt that the debate over clean energy has moved beyond day to day concerns around climate change (even if it should not), and now that technologies such as solar can deliver electricity at equal or lower prices at the socket, the issue of technology cost is also nearly redundant. The battleground has moved to regulation, and policy decisions on the framing of tariffs and how to reflect the true value of producing and consuming energy. And it’s largely played out out of the public eye.

What is required is a new way of looking at the energy system. The hub-and-spoke model, like fixed-line telephony, is creaking under the strain of the so-called “self consumption” market and the ability of customers to produce their own energy.

And the regulation has gotten off to a bad start. The premium tariffs designed to give rooftop solar a kick-start and help reduce its “soft costs” – those for installing, pricing and maintaining the systems – were so badly managed in some key states (NSW, in particular), that utilities seeking to defend their territory and business models were able to gain the moral high ground and win favourable tariff structures under the lofty goal of protecting disadvantaged consumers.

Most tariffs in the country are now structured around a net tariff, which enables a household to use the electrons they produce to offset their consumption and rising retail prices from the main utilities. But any excess production is sold back at a peppercorn rate (under the guise of network and other costs) to the retailers, who then sell it to a nearby customer for between two and four times as much.

However, the utilities have been quietly pushing for an even more draconian measure to be introduced – a gross tariff, which will require households to sell all their output to the retailer and then buy it back at an inflated price.

Giles has a follow up article noting that the gross proposal has been abandoned, for now - Utilities say no to gross tariffs, yes to battery storage.

In a nod to the emerging power of the “pro-sumer”, Australian energy network operators and retailers have rejected a suggestion to move to gross tariffs for rooftop solar, saying it risked turning customers against them. Some suggest tariffs that would encourage homeowners to invest in more battery storage.

Operators of electricity networks in Queensland and the energy retailers have overwhelmingly rejected a proposal by the state’s competition authority to introduce gross tariffs for rooftop solar, saying they would be complex, expensive and unfair to owners of rooftop panels.

The Queensland Competition Authority raised some eyebrows, and a few hackles, last month when it raised the prospect of a gross tariff in an issues paper it prepared for deliberations around a “fair and reasonable” tariff for solar.

The solar industry immediately condemned the proposal, saying the idea of forcing customers to sell all their solar power to retailers and then buy it back at a much higher price was inequitable and would effectively mean the death of the industry, as it would remove the attraction of rooftop systems as a hedge against rising electricity costs. And it seems that the utilities, who were suspected by some, of quietly advocating the move, have recognized the risk of putting consumers offside if such a tariff was introduced.

Most of the submissions put to the QCA by network operators and retailers pointed to the potential complexity and cost of a gross tariff – particularly in having to change metering arrangements.

Interestingly, it was TRUenergy, under fire over its proposal to sharply reduce the development of utility scale wind and solar developments by curtailing the ambition of the renewable energy target, which said most clearly that gross FITs were unfair because they were not equitable to consumers.

It noted that households that invested in rooftop photovoltaic systems do so in the expectation that they will be able to consume less grid energy, and thereby gain a sense of control over their costs.

“Under the proposed changes, households would be required to ‘sell’ energy to the grid at the cost of energy, and then ‘purchase’ energy for their own use, at up to three times the price,” it noted in its submission. It said it would be confusing and “may create the perception that electricity retailers are benefiting at the consumer’s expense.”

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$100b of Australian LNG projects imperiled by African gas rush ?

The SMH has an article speculating that east african may be the next frontier for the gas age, imperiling new Australian coal seam gas projects - $100b LNG projects imperiled by African gas rush.

The discovery along Africa's east coast of the world's biggest gas finds in a decade threatens to undo investment plans on the other side of the Indian Ocean. Royal Dutch Shell, BG Group of the UK and France's Total may scale back projects to build liquefied natural gas export plants in Australia and switch to Tanzania and Mozambique, where the new prospects lie and will cost about half as much, according to Jefferies International.

The LNG boom in Australia, where $180 billion of planned investment was set to make gas the country's fastest-growing export over the next five years, risks losing strength as labor and material shortages force up building costs. As energy companies consider the next $100 billion of projects, a switch to East Africa would hold back Australia's market share in China and India, where energy consumption is forecast to rise more than 60 percent by 2030.

“Because of the volume that's been discovered in East Africa, the economics look to be able to challenge Australian LNG projects, given the cost inflation they have experienced,” said Peter Hutton, an RBC Capital Markets analyst in London. “All companies will have that on their radar.”

The Asian market for LNG, gas that's chilled to a liquid for shipment by tanker, accounts for about two-thirds of global demand and will grow by 6 percent a year this decade, according to Sanford C. Bernstein & Co. Among six Australian projects scheduled to reach investment decisions in 2013, few will be approved because of climbing costs, Neil Beveridge, a Hong Kong- based analyst at Bernstein, said in a report this month.

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Australian Electricity market to be opened up to curb demand

The SMH has a report on the latest plans by the Australian energy market regualtor to make power prices more market driven - Electricity market to be opened up to curb demand.

In a bid to drive down surging electricity prices, the national wholesale electricity market is to be opened up to large energy users for the first time. The move is part of a series of measures aimed at cutting power demand during peak periods of the day, such as late afternoon.

Central to the new proposals, households will be pushed to cut electricity consumption during these peak periods - typically first thing in the morning and during the late afternoon and evening - in a bid to slash the need to spend tens of billions of dollars on new equipment, outlays which are driving up power prices.

In NSW, for example, electricity prices have risen upwards of 60 per cent over the past three years, which has prompted a fall in power demand for the first time on record.

In a report issued this afternoon, the Australian Energy Markets Commission, which oversees the electricity and gas markets, has outlined detailed plans for an overhaul of the market.

The key measures include:

* allowing large power users direct access in the wholesale electricity market for the first time;
* changed electricity tariffs to encourage more energy usage in off-peak times of the day, such as the afternoon and late evening;
** open up the sale of household and small commercial electricity, such as from rooftop solar panels, to buyers other than electricity companies.

The SMH also notes that following cost blowouts and the usual conservative conspiracy theories gaining traction in Victoria, smart meters aren't mentioned by name in the new recommendations - Smart meters too toxic to touch.

It is perhaps the biggest single public policy failure in the energy sector of the past decade - mandated smart meters which are being introduced in Victoria.

With the cost of the roll-out now estimated at more than $2 billion - more than twice the initial estimated cost - it has added another lucrative profit source to the activities of the power distributors.

And the backlash has been so intense that the Australian Energy Markets Commission omitted any reference to "smart meters" in its 192-page report released yesterday. The report outlines a series of measures to overhaul the electricity market by boosting so-called demand-side participation - that is, measures to encourage lower demand at times of peak electricity prices.

The report is littered with the term "better metering" and even "interval metering" as a means of introducing "more innovative pricing options" to the electricity market, to cut the need for a new round of capital spending.

The issue of smart meters has become so toxic politically that the NSW government, for example, refuses to countenance a mandated roll-out, fearful of a tabloid newspaper-generated backlash, such as occurred in Victoria, even though the federal government is threatening penalties if it doesn't go down this path.

And as Victoria has found, there has been no advantage in being the "first mover" in introducing smart meters, since technology has moved on since it launched this program several years ago now, especially since many so-called smart meter functions are little more than a smartphone app these days - especially with the national broadband roll-out.

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Overstretching the Australian LNG Industry

Paddy Manning has an article on the SMH on the Australian LNG boom (starting the gas age) - Too much too soon has left LNG industry overstretched.

The proponents of Australia's massive liquefied natural gas boom are doing the hard yards.

Seven enormous projects worth more than $US172 billion ($165 billion) combined are under construction all at once. Already this year two operators - BG Group and Santos - have announced cost blowouts, of $US5 billion and $US2.5 billion, at their respective coal seam gas projects - Queensland Curtis LNG and Gladstone LNG.

Santos's efforts to window-dress the announcement, as a pull-forward of upstream capital expenditure scheduled for post-2015, fell flat.

In the last fortnight, in quarterly earnings calls, Chevron admitted it faced rising costs on its $US43 billion Gorgon project on Barrow Island, and its budget and schedule were under review, and Shell flagged it could delay Australian LNG projects worth $US17 billion.

The head of global gas for energy analyst Wood Mackenzie, the Edinburgh-based Noel Tomnay, says Australia will be ''one big bad news story for the next couple of years, with delays to projects and cost over-runs. It seems inevitable.''

Australia's strong dollar, rising labour and compliance costs are being blamed for the pressures, and competition from lower-cost countries is causing investors to think twice about Australian LNG.

Tomnay says this year's cost blowouts are unlikely to be the last announcements. ''With that in mind, it would be a brave board that went out to investors right now with an investment decision on another Australian LNG project,'' he says. ''Would the market reward another announcement? Probably not. It would be more pragmatic to announce a breather. 'Annual capital expenditure on Australian LNG is going from $US10 billion to $US40 billion, which is highly inflationary. There has to be a hiatus.''

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Santos produces first shale gas in Australia

The Business Spectator reports that Santos are getting some positive market feedback after expanding into shale gas in inland Australia (supplementing their natural gas and coal seam gas production) - Santos pins hopes on first shale gas.

Oil and gas producer Santos says Australia's first commercial shale gas well is ready to go into production, helping to boost supply and keep prices stable in eastern Australia.

Santos said its Moomba-191 well in the Cooper Basin was now producing dry gas after the company reported an increase in underlying first half profit and maintained its full-year production guidance on Friday. ...

Chief executive David Knox said shale gas flows from the Moomba well were a significant milestone in the company's program to unlock the vast unconventional gas potential of the Cooper Basin that straddles the South Australian and Queensland border.

"The shale well result has been an outstanding result for us and potentially for eastern Australia for the very long-term future," Mr Knox told analysts on Friday. ...

"The share price is up because of the surprisingly good flow rate that they're getting at their Moomba 191 shale gas well," Mr Wood said. "You can start to talk about some very large numbers on the back of that, but it's very early days. Certainly this flow rate was better than we were expecting."

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Gas projects to push up Australian electricity prices

The SMH reports that natural gas prices are on the rise in Australia (as expected as LNG export projects close the gap between local prices and those in Asian export markets) - Gas projects to push up electricity prices.

Wholesale electricity prices will remain weak for the next couple of years, but domestic gas prices are expected to surge in the future, pushing up electricity bills, as Queensland's export gas projects come on stream.

Speaking at a conference earlier today, TruEnergy managing director Richard McIndoe made the forecast, although he expects that eventually the development of shale gas reserves will help contain electricity prices towards the end of the decade.

Weak wholesale prices are a mixed blessing for the large generators and retailers such as AGL, Origin Energy and TruEnergy, since it depresses the profits of their generation units, although it helps to give their retail arms greater flexibility to discount prices to maintain margins and protect their competitive position in the retail market. ...

Over the next three to five years, the launch of export gas projects in Queensland will see domestic gas prices rise, which will push up wholesale electricity prices, he said and it will ‘‘drive the bidding practices of coal-fired generators’’.

Additionally, strong Asian demand for coal, especially from India in the coming years, will keep coal prices high ‘‘and set wholesale [electricity] prices higher’’, he said. These pressures will be especially notable as low-priced coal contracts in NSW roll-off, he said. But further out ‘‘solar and shale gas may bring prices down’’, he said.

Earlier this week, the Australian Energy Markets Operator slashed forecasts for new power generation capacity.

In recent trading, the wholesale electricity price has been holding at around $30 a megawatt hour, and has changed little over the past 15 years.

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Australian ocean energy could power Melbourne by 2050: CSIRO study

ReNew Economy points to a new study from the CSIRO on ocean power potential in Australia - Australian ocean energy could power Melbourne by 2050: study.

Did you know that wave energy has the potential to supply about 11 per cent of Australia’s electricity – the equivalent to powering a city the size of Melbourne – by 2050?

If the results of yesterday’s Climate Institute’s “Climate of the Nation 2012″ report are anything to go by, you probably didn’t. Because while that study found overwhelming support among Australians for the development of renewables, most of this was directed towards solar, wind and hydro, with only 25 per cent of respondents nominating wave energy as their most preferred option (although this number still beat out nuclear and coal).

The fact is, not nearly enough is known about ocean renewable energy in Australia – a situation the CSIRO hopes to redress with its new report, “Ocean renewable energy: 2015-2050.” The report, released today – and from which the above fact was gleaned – is the result of the CSIRO’s efforts to understand the potential of this clean energy source, and to inform the ocean energy industry, government and investors about the challenges and potential for the technology.

“Given the potential of ocean energy and the fact that it’s a very new technology, CSIRO wanted to understand what is the sustainable level at which this resource could be used for energy supply and whether it could be competitive with other energy technologies,” said Ian Cresswell, acting director of the CSIRO Wealth from Oceans Flagship. “Assessing the opportunities and challenges from resource to the market is a first for ocean renewable energy in Australia.”

The study was carried out by the Wealth from Oceans and Energy Transformed Flagships and included an analysis of the resource, cost to market, technologies and future take-up projections by oceanographers, engineers, economists. It also engaged the ocean energy industry and related sectors.

As the report – which can now be viewed online – points out, wave energy converters are still an emerging technology. CSIRO’s research uncovered at least 200 devices around the world in various stages of testing and demonstration, but found that relatively few had publicly available data on deployments at sea in full operational mode. ...

Nonetheless, the study identified 16 Australian companies that are either actively developing ORE projects, have received significant government and/or private funding, or have announced ORE plans; and it pointed to some home-grown technologies being offered to the market – the most advanced being the CETO submerged buoy system, and the OceanLinx oscillating water column system.

The largest ORE project in Australia (recipient of a $66 million grant from the federal government) was identified as the construction of a wave farm off the coast of Victoria by Ocean Power Technologies Australasia (OPTA), a company with a US-based parent.

As for Australia’s ocean energy potential, the report found that Australia has an abundant wave energy resource and could produce 24-hour power, either from the tides, currents or waves. The nation’s best resource was found to be concentrated along the southern coastline, as well as a consistent, yet smaller, contribution on the east coast – although the report said characterisation of this resource area required further attention.

The areas the report says could benefit most from wave energy technology include Perth, the southern coastline, and (less-so) the east coast of Australia (see chart below). It also found that tidal technology could supply niche areas such as north east Tasmania and WA’s Kimberley region and ocean thermal energy off the coast of far north Queensland.

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Canberra grants pave way for world’s biggest wave turbine

Giles Parkinson at ReNewEconomy has an article on the release of some government funding to wave power companies BioPower (mentioned in this post on biomimicry) and long time developer OceanLinx to build pilot plants (following an earlier funding round to Carnegie Corp in WA) - Canberra grants pave way for world’s biggest wave turbine.

The Australian government as upped its investment in two nascent, Australian-developed wave energy technologies, announcing new grants worth almost $10 million to help bring the two new systems to the market, including what is believed to be the world’s biggest wave energy turbine.

The government is providing $5.6 million to BioPower Systems to install a 250kW full-scale pilot plant of its bioWAVE technology off the coast of Victoria, and is also providing just under $4 million to Oceanlinx, to install a 1MW demonstration plan of its Greenwave technology in South Australia.

Both grants are being made under the $126 million Emerging Renewables program, and follow an earlier $9 million grant to Carnegie Wave Energy, which is building a $31 million, 2MW grid-connected demonstration of its CETO technology near Fremantle in Western Australia.

BioPower CEO Tim Finnigan said the grant, along with a $5 million grant from the Victorian state government, means that its $15 million project was now fully funded. “This puts us into a position to complete the project, get it on the grid, and prove the technology at scale,” he told RenewEconomy. “It’s a pretty big development for us.”

The technology is best described with an image, see below. It’s designed to lay flat on the ocean floor when the waves become too big (it calculated this to be around 1 per cent of the time).

It is designed to absorb energy both at the surface and below. It is mounted on sea-floor, the demonstrator will be in about 30m of water, and the array of buoyant floats, sways back-and-forth in tune with the waves, and the energy contained in this motion is converted to electricity by an onboard self-contained power conversion module, and is delivered through a cable.

However, the first demonstration plan will weigh 400 tonnes when it is installed at a site 4kms from Port Fairy on the southern coast of Victoria. “We not trying to prove a light-weight structure right now,” Finnigan says. “We will carve our way to that over time.”

Like Carnegie Energy, Finnigan says the long term goal for wave energy has to be to match wind – which means capital costs of around $2 million/megawatt and a levellised cost of energy at $100/MWh or below. He says BioPower has a four-stage plan to reach that target by the end of the decade. ...

Meanwhile, Oceanlinx says it believes its GreenWave device (see below) is the first in the world to be rated at 1MW, and its efficiency has improved 50 per cent since an earlier, smaller version that was deployed near Port Kembla in NSW. The 20m by 20m structure, around 17m high, will sit in around 10m of water. It features an oscillating water column, with the turbine and other moving parts above the waterline. The 2,000 tonne concrete structure will sit on the ocean floor.

CEO Ali Baghaei says this demonstration unit will have an LCOE of 28c/kWh, which will fall to 16c/kWh once 5MW have been installed and to below 10c/kWh once 75MW have been installed. The initial project will cost $7.2 million, with the balance coming from a recent $8 million fund raising from existing investors. ...

Resources and Energy Minister Martin Ferguson said the grants made Australia “one of the world’s largest supporters” of wave energy technology. “Wave energy is still very much an emerging technology and this funding will position Australia as a global leader in developing this technology,” he said in a statement, adding that wave energy had the potential of providing 1300 terawatt hours per year, or about five times Australia’s total electricity requirements.

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Carbon Price Comes Into Effect, World Doesn't End - Not That It Will Help Labor

Australia's carbon tax commenced on July 1 and the nation's economy seems to be trundling along OK, in spite of the apocalyptic predictions of the conservative fringe who seem to think that the small (and largely compensated for) cost is somehow going to wipe out one of the few well performing developed economies. Crikey's Bernard Keane has a look at the lunatic fringe and their opponents - the pathetic rabble in the Labor government who introduced the tax (not that they would have ever done such a thing if the Greens hadn't forced them to) and are hoping the electorate will base their beliefs on evidence at the next election - Labor and the myth of the rational voter.

Amid the torrent of earnest declarations, comments and wisecracks to mark the start of the carbon price yesterday, there was a moment of bright, shining stupidity that captured the entirety of this “debate”. Radio entertainer Neil Mitchell lashed out at Wayne Swan on Twitter for noting that Whylla, contra Tony Abbott’s apocalyptic claims, remained in existence.

“Is this stuff from Wayne Swan really the level of political debate we want?” he angrily demanded. “People in Whyalla and Yallourn and similar are actually concerned for their future. This reaction is offensive to them.”

It’s apt that we’ve reached the point where the mere assertion of a fact, and one as anodyne as the continued existence of a town, should be deemed by a media figure (albeit one whose job description is to be professionally offended on behalf of his audience) as “offensive”. The carbon price has always been a fact-allergic debate. I speak not so much of the senility of the anti-carbon tax protesters with their hilarious signs and deep anger at a world that won’t stop changing on them. Nor of the proud leadership of the assertion-based community by News Limited, with its decreasingly trusted newspapers.

It goes back further than that, to the original Kevin Rudd policy which was, let us not forget, a truly wretched concoction the development of which demonstrated all the faults that eventually killed that government.

To cover politics in that period was to hear, ad nauseum, the dulcet tones of Penny Wong averring “can I say, we think we’ve got the balance right” for a policy that in effect delayed any action on decarbonisation until the 2020s courtesy of a series of cave-ins to rentseekers, while Labor devoted itself to the twin, and incompatible, goals of trying to both win Coalition support for the package and split its opponents on the issue. When, finally, the policy was abandoned in the face of a crude but effective campaign by Tony Abbott, and Rudd’s fortunes slumped, it was no more than his government deserved for a deeply cynical approach to an issue it had portrayed as the greatest moral challenge of our time.

That his successor promptly ensnared herself in the same issue (LOL citizens’ assembly) and then smashed her credibility to CO2-molecule sized pieces with her post-election reversal was every bit as much just desserts for the women who’d lobbied Rudd hard to dump the issue and run.

As if taking his lead from his opponents, Abbott’s approach has been every bit as mendacious and more. Climate action is the issue par excellence on which Abbott has exemplified his political trademark, a tendency not so much (as Gillard is often accused) to believe in nothing as to believe in everything, occupying all possible positions on an issue, leading the Coalition’s primary advocate of a carbon tax to become its most dogged opponent. But that reversal was merely the platform for an extended campaign of wild overstatement. Abbott’s predictions of the end of Whyalla and other centres and various industries remain unwithdrawn, although some of the metaphors he has deployed have, rather in the manner of Maxwell Smart’s “would you believe” in the face of an incredulous villain, been replaced with softer versions as time has gone on.

With such examples from their political leaders, voters have followed suit. Voters are irrationally convinced that what is in effect a modest carbon price will have grotesque impacts on the economy, far beyond those occasioned by, say, the financial crisis. According to Essential Research, more than half of voters believe the carbon price will increase fuel prices “a lot” when it will have no effect at all. Around 40% believe it will increase grocery prices “a lot”. Nearly a third think it will increase unemployment a lot; one in five think (contrarily) it will increase interest rates a lot.

We’re not talking about the idiot fringe here waving “Bob Brown’s Bitch” placards and likely to die decades before the most serious impacts of climate change are felt. These are real, normal voters, with apparently functioning brains.

The Labor plan — or more correctly the Gillard plan — is that in the face of evidence that the carbon price has lifted unemployment or interest rates or the price of bananas, such voters will abandon their prejudice and look anew and sympathetically at the government. In aid of such a magical transformation, the government is running a campaign at almost election-level intensity, with the Prime Minister’s press staff spending the last 48 hours churning out media alert after media alert. The government will also be aided by a likely further fall in inflationery pressures that will see CPI remain almost flat, while fuel prices may even fall further.

But voters won’t change their minds at all, and certainly not in the time between now and the next election. For one thing, this sort of change, if it occurs, takes a long time: despite the fact that the GST is now firmly embedded in the Australian economy, 30% of voters still think it was a bad idea. That’s after more than a decade.

But, worse, the Labor fantasy is based — irrationally — on the idea of a rational voter. This is less than ever a plausible view of democratic Australia. We’re decreasingly willing to let facts influence our views of public policy. We regard the economy through a lens of our partisan beliefs, so that Liberal voters see only economic misery and financial hardship. We think we’re doing it tough financially even as we travel overseas. We’re convinced many multiples of asylum seekers are arriving than ever set foot here. We refuse to accept the copious evidence that our incomes have risen far more quickly than prices in recent years. We filter information out that doesn’t accord with our views. If that leaves us with no information at all, that’s no problem.

The cliché that you’re entitled to your own opinions but not your own facts thus appears decreasingly relevant. Indeed, not merely are you entitled to your own facts, it’s right to be offended, Neil Mitchell-style, at anyone offering contrary information. To be contradicted by someone is damn near an attack on your freedom of speech. The irrational anger that motivates some climate denialists to make threats of death and injury to scientists is only an extreme example of the fact that many of us now feel entitled to our own facts.

Perhaps it’s why everyone is so “offended” now. Offence is an entirely subjective state, one unable to be contradicted by any smart-aleck quoting evidence.

Labor’s plan to turn its fortunes around is a fantasy, a fact-based fantasy when the real world relies on make-believe. We’ll spend the next couple of months establishing that. Then it’ll be back to square one. Back to where Labor was in February.

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