Meeting the target
If you don’t understand where electricity comes from or how it is transmitted there is a short (simplified) primer on this website: Read More…
I suggested in an earlier paper on this site that the present renewable energy target is a ‘stretch goal’; that will be difficult or even impossible to meet without another, less variable, energy source than wind or solar.
The following table shows how some other countries source electrical energy. Compare Australia, 92.7% fossil dependent, with Switzerland, 1.1% fossil dependent.
Electricity Generation 2009
|
Coal |
Gas & oil |
Total fossil |
Nuclear |
Hydro |
Wind |
Solar |
Biofuels and waste |
Other sources |
|
|
Australia |
77.9% |
14.8% |
92.7% |
NIL |
4.7% |
1.5% |
0.1% |
1.1% |
<0.1% |
|
United Kingdom |
28.2% |
45.2% |
73.4% |
18.4% |
2.4% |
2.5% |
<0.1% |
3.3% |
<0.1% |
|
United States |
45.2% |
23.9% |
69.1% |
19.8% |
7.1% |
1.8% |
0.1% |
1.7% |
0.4% |
|
Germany |
43.4% |
14.9% |
58.3% |
22.8% |
4.2% |
6.5% |
1.1% |
6.0% |
1.1% |
|
Spain |
12.6% |
43.0% |
55.7% |
18.0% |
9.9% |
12.9% |
2.1% |
1.4% |
0.1% |
|
France |
5.3% |
5.0% |
10.3% |
75.6% |
11.4% |
1.5% |
<0.1% |
1.1% |
0.1% |
|
Sweden |
1.2% |
1.7% |
2.8% |
38.2% |
48.3% |
1.8% |
<0.1% |
8.9% |
<0.1% |
|
Switzerland |
<0.1% |
1.1% |
1.1% |
40.4% |
54.8% |
<0.1% |
0.1% |
3.5% |
<0.1% |
Source: IEA - International Energy Agency
Notes:
- France has 60 nuclear power-stations and is one of the lowest cost producers in Europe; exporting nearly five percent of its electricity. About a sixth of this is imported by the UK.
- The UK plans to build 10 or more new nuclear power stations over the next 15 years to rectify the growing shortfall and replace old technology - read more
To actually make a significant impact on carbon emissions in Australia we will certainly need a mix of nuclear generation; like almost all developed and most rapidly developing countries.
French domestic consumption is around twice ours in Australia (see the followng table). If we replicated the French we would need around 30 nuclear power-stations.
The quickest way to achieve this would be to first replace our oldest and most carbon intensive generators with nuclear stations; on the same site. The grid is a very costly component in the supply chain and is already in place from these sites.
As I have previously noted local communities would receive major health and environmental benefits and workforce and local economic impacts would be positive. But eight years is an impossibly short time-frame for nuclear power to be implemented and make a difference.
A new hydro-electricity scheme sufficiently large to make a contribution on the East coast (several times larger than the Snowy Mountains scheme) is even more problematic; bordering on impossible. It would involve damming all the high flow-rate coastal and northern rivers, like the Clarence. Even if environmental and community issues could be resolved, the major engineering works involved would take decades.
Several other renewable resources such as geothermal, waves and tides are on the drawing board. Some of them have remained there for over 100 years. But none of these have any chance of making a significant contribution (more than 1%) within eight years; if ever.
This effectively leaves us with wind and solar. I have already explained why wind becomes increasingly uneconomic as it approaches 20% of total energy delivered. South Australia and Tasmania are already approaching this barrier and rely on expensive DC links to Victoria to dispose of excess generation when local demand is low; and the wind is blowing at its optimum. When the wind is not blowing they depend on these links to keep the lights on.
While it has risen to saturation in the smaller southern states wind energy presently supplies little over 6,800 gigawatt hours of electricity annually – around 2.4 per cent of electricity delivered to the NEM in 2011/12.
Investment in wind has been growing at around 25% pa but this has slowed recently as the best opportunities are exploited and the smaller states have become saturated.
There are still some good as yet unutilised wind provinces in Victoria and less in NSW. Some wind farms have been delayed by local environmental objections but these will no doubt be overruled in due course. Good wind provinces close to the grid get less common further north; adjacent to much larger population centres in NSW and Queensland where fossil fuels will need to remain dominant.
Even at current growth rates, unconstrained by resource issues, it would be very optimistic to project wind generation of more than 21 TWh pa by 2020. This would leave a shortfall in the MRET of around 20 TWh to be made up somehow.
Solar energy is even more constrained than wind in terms of the total contribution it can make. This contribution is not related to price but to the capacity factor (the percentage of time that the power-station is able to operate at its nominal peak capacity).
Thus a typical well located wind turbine produces at full power for an average of around 35% a year, whereas well located solar might manage half this. Rates of around 10% are more typical for photo-voltaic (PV) solar in urban locations where shadowing and pollution can be an issue. I have discussed this in more detail elsewhere - read more.
The price of PV solar is falling rapidly, dimming the prospects for solar-thermal technology because good thermal sites, with adequate insolation and a better capacity factor, are generally far from the grid; whereas PV solar can be adjacent to the consumer.
While still more expensive than wind, PV solar is more widely available and can more easily be located in urban areas close to demand. As the price of PV panels falls their relatively poor efficiency, particularly when not optimally located, can be compensated for by simply adding more panels.
It sounds great; or so the solar industry tells us. So why is capacity factor important?
The recent German experience is informative. Germany now has around 30GW of heavily subsidised PV solar capacity; most of it in urban areas. On two or three occasions this year (2012) generation exceeded total German demand. While the excess energy was exported the actual price received in the European energy market was very low.
In that market it is possible for the price to become negative; as experienced by Denmark that has a saturated market for wind power at around 20%. This means that Germans must either pay to have the energy taken away or must shut down excess capacity - this is very hard to do with domestic feed-in generation.
To cope with this Germany has recently heavily cut back incentives for feed-in solar generation - much to the alarm of the solar industry - read more. This has happened as the contribution of solar generation to annual German electricity production approaches just 5.4%.
This suggests that a target for solar any higher than say 6% of total generation, is a formula for massive over-investment and waste. The capacity factor will inevitably be forced down and further incremental growth will simply add unwanted peak generation. These panels cost carbon to make, install and maintain and net carbon released could well be positive as a result.
Theoretically Australia could absorb say 10 TWh of annual PV solar generation. This would take us to around the capacity that is already causing inefficiency and waste in Germany today. But such a massive, and potentially wasteful, investment program in just eight years would still leave us with a shortfall against the present MRET of around 10TWh.
As the Australian renewable energy industry finds it increasingly difficult to meet the MRET generation target the LGC price will rise.
Several industry commentators, including Origin Energy, are already forecasting that this cost will quickly outstrip the carbon tax impost.
Last year IPART also forecast steeper increases in the future due to the projected increase in these proportions to meet the escalating mandatory target.
A steep increase in the LGC price will encourage the building of very marginal, presently unprofitable, wind farms that contribute very little to the overall energy market. It will also hand extraordinary wind-fall profits to existing wind farms.
This will be in no ones interest except the investors in existing farms; and the overseas manufacturers of wind turbines. The only local manufacturers of large (>1MW) turbines have long since closed; due to the small market and high A$.
I have previously argued that Electricity is already doing its ‘fair share’ in the move to renewable low carbon technology through these mandatory renewable energy targets.
On these grounds there is an argument that existing electricity generators should have been exempt from the carbon tax; at least until the Large-scale Renewable Energy Target (LRET) can be absorbed into a full properly structured carbon trading scheme.
If as appears likely, the renewable energy target is unachievable in the proposed time-frame the MRET has potential to:
- spawn remote, poorly located and otherwise uneconomic wind and solar generators - themselves consumers of energy in their construction and support;
- require the construction of highly inefficient and expensive transmission lines to remote generation sites - that are inherently wasteful of energy, capital and materials - and releasing millions of tonnes of carbon in their manufacture, installation and maintenance;
- drive the price of electricity to the top of the world price table;
- further damage the domestic manufacturing sector;
- result in the proliferation of alternative local generation solutions - using fossil fuels less efficiently than at present; and
- still fail to meet the target, that makes no provision for falling energy demand - as a result of the projected steep price increases.
It seems inevitable that the very steep future increase in electricity prices predicted within the industry will quickly become politically unsustainable and a new scheme will need to be devised for more comprehensive carbon reduction well before 2020.