Four Possible Scenarios For Australia’s Energy Future

by Joshua S Hill.

In Australia, wind power is rapidly replacing coal-fired capacity.
In Australia, wind power is rapidly replacing coal-fired capacity.

A new report published by the Future Grid Forum has outlined four possible scenarios which could represent the way Australia’s national electricity system may grow.

The Forum brought together more than 120 representatives from the electricity industry, government, and community. The aim was to “inform and inspire the national conversation about the future of electricity in Australia.”

The report presented to the participants is available for download here.

The Future Grid Forum presented four scenarios “that have far-reaching implications for the current and future electricity supply chain and would alter the electricity system in Australia.” The four scenarios are:

  • Set and forget
  • Rise of the prosumer
  • Leaving the grid
  • Renewables thrive.

“All of the choices in the Future Grid Forum scenarios have consequences for the price of electricity, something that has significantly impacted consumers in recent years,” said CSIRO Energy Flagship Chief Economist, Paul Graham. ”Electricity will not get cheaper in the coming decades, but bills can be reduced through the adoption of energy efficiency, peak demand management and on-site generation.”

“These steps, in combination with general wages growth, means the share of income average households spend on electricity is projected to be similar – shifting marginally from 2.5 per cent in 2013 to between 2.3 and 2.9 per cent in 2050 depending on the scenario.”

The four scenarios present ways in which consumers can take greater control of how they consume and produce electricity.

“This proactive shift could potentially influence the business model for the electricity sector, encouraging the emergence of new services to supply an individually tailored product – not dissimilar to the telecommunications industry shift from a one-size-fits-all landline telephone system to a wide variety of mobile and associated data and entertainment services,” Mr Graham said. ”One of the Forum’s scenarios looks at the option for around a third of consumers to disconnect from the electricity grid through the use of on-site generation using technologies like rooftop solar panels and battery storage; and this is projected to be economically viable from around 2030 to 2040.”

“Under the full range of scenarios Australia could see on-site generation grow from the current figure of 8 per cent to reach between 18 and 45 per cent of total generation by 2050, but mostly while staying connected and using the grid as an electricity trading platform.”

The four scenarios are helpfully explained in the following four images.

set and forget

rise of the

leaving the grid

renewables thrive

The Forum is clear to make the distinction between scenarios and predictions.

“They are windows through which we can view potential futures for Australia’s electricity sector and have been developed through extensive quantitative modelling, analysis and social dimensions research,” they note.

Unsurprisingly, the Forum believe that technology is going to play a much greater role in the way that we move forward, allowing for “more sophisticated ways of managing household demand during peak times through the introduction of devices such as smart air conditioners and in-home storage systems.”

“Better strategies for peak demand management could save two cents per kilowatt hour or $1.4 billion per annum on distribution costs for households,” Mr Graham said.

“This is an extraordinary time of change for Australia’s electricity industry and the Forum partners see the release of this report as an opportunity to begin a national conversation to decide the right answers for the sector, its stakeholders and, most importantly, all Australians,” Mr Graham concluded.

Australia has consistently been behind the curve in energy innovation, thanks primarily to heavy reliance on massive coal reserves. Movement has been made — including recent solar records reaching 3 GW — but there is a long way to go.

This article, Four Possible Scenarios For Australia’s Energy Future, is syndicated from Clean Technica and is posted here with permission.

About the Author

Joshua S. HillJoshua S Hill I’m a Christian, a nerd, a geek, a liberal left-winger, and believe that we’re pretty quickly directing planet-Earth into hell in a handbasket! I work as Associate Editor for the Important Media Network and write for CleanTechnica and Planetsave. I also write for Fantasy Book Review (.co.uk), Amazing Stories, the Stabley Times and Medium.   I love words with a passion, both creating them and reading them.

Why The Hot Money Is Chasing Energy Storage

by Giles Parkinson

Originally published on RenewEconomy

What do Bill Gates and Warren Buffett have in common? Apart from being very, very rich, it is a growing interest in battery storage and other “smart” technologies that will redefine the way our electricity grid operates – hopefully to the benefit of the consumer.

Gates has built up a collection of energy storage investments – including Aquion Energy, Ambri, and LightSail – and Buffett is a major investor in Chinese electric car and battery developer BYD, soon to unveil a home battery storage solution in Australia.

Last week, Gates and well-known cleantech investor Vinod Khosla last week bought into Varentec, a US company that is developing “smart” technology that will link storage devices and renewables, and lead to what Khosla describes as “cost-effective, intelligent, decentralized power grid solutions.”

Energy storage, as described by investment bank Citi in its new Energy Darwinism report, is likely to be the next solar boom. Citi says the main driver of this investment will not be just to make renewables cost competitive, because they already are in many markets – but for the need to balance supply and demand.

This, in turn, will make solar and other renewables even more attractive. It may even mean the end to the domination of centralised utilities, as storage will allow the industry to split into centralised backup (based around the old rate-of-return regulated utilities model) and much smaller “localised” utilities that harness distributed generation such as solar and storage.

This could be deployed even on a “multi street” basis, Citi says. (Yes, Grant King, the Sydney suburbs of Pymble and Gordon could go off-grid – see our interview with the Origin CEO here). In Germany, some small towns are doing just that, and Citi notes that KfW, the German development bank that kicked off the solar boom 10 years ago, has now begun an energy storage subsidy program.

This presents yet another challenge for generators, which are being displaced by the huge impact of solar generation in markets such as Germany, and in Australia too.

“If, as we expect, storage is the next solar boom and becomes broadly adopted in markets such as Germany, the electricity load curves could once again change dramatically causing more uncertainty for utilities and more disruption to fuel markets,” Citi notes.

This could be good news and bad news for generators and network operators. The first graph (figure 26) shows what is happening to baseload generation on sunny days in Germany with lots of solar. Similar impacts are being felt in Australia and the US. Baseload generation is squeezed out, but flexible gas generation finds a role.

With storage, this evens the output of solar. That’s bad news for flexible gas, because it is no longer needed as much, and while the overall level of baseload is reduced, at least it is fairly consistent.

“So, solar initially steals peak demand from gas, then at higher penetration rates it steals from baseload (nuclear and coal) requiring more gas capacity for flexibility, but then with storage, it benefits baseload at the expense of gas,” Citi writes.

“Who would want to be a utility, with this much uncertainty?”

Citi says that while energy storage is in its infancy, and subsidies will be needed for solutions that right now are still expensive and largely uneconomic, increasing amounts of capital are being deployed in the industry.

“Much of the historic investment in battery storage technology has been in the automotive sector given the development of electric vehicles. However, increasing efforts are being made elsewhere, most notably for the purposes of either small-scale residential storage (via the integration of Li-ion batteries into the inverters which convert solar electricity from DC to AC), or at a grid level.

It is important to note that while the holy grail for the automotive industry has been maximising energy storage capacity while reducing weight (electric vehicle batteries are enormously heavy, and thereby affect range, performance etc), at a residential or grid level, size and weight is far less of an issue.

The industry is still at that exciting (and uncertain) stage where there are many different competing technologies, and it is not yet clear which will emerge as winner(s).

At a grid level investments are being made into compressed air storage, sodium sulphur batteries, lead acid batteries, flow batteries, Li-ion batteries, and flywheels to name a few. These are all discussed in more detail in the report highlighted below.

So while storage is still very much a nascent industry, we should remind ourselves that this was the case with solar in Germany only 5-6 years ago. The increasing levels of investment and the emergence of subsidy schemes which drive volumes could lead to similarly dramatic reductions in cost as those seen in solar, which would then drive the virtuous circle of improving economics and volume adoption.” — Citi

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This article, Why The Hot Money Is Chasing Energy Storage, is syndicated from Clean Technica and is posted here with permission.

About the Author

Giles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

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