RenewEconomy/Giles Parkinson: The changing shape of wind and solar in Australia's grid

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The changing shape of wind and solar in Australia’s grid
By Giles Parkinson on 5 July 2018

Australia is currently experiencing an unprecedented boom in solar and wind energy investments, both in terms of capacity and dollars. It will likely take the country to a 33 per cent share of renewables as early as 2020.

But there is another fascinating development taking place – as more and more wind and solar is added to the grid, the shape of their output is also changing, and in a way that should give confidence about a clean energy future based around a high level of variable renewable energy sources.

Two significant trends that are emerging: the first is the offering of “firming contracts” to those looking to source a significant amount of their supply from wind and solar, but wary of wholesale price risks when the sun don’t shine and the wind don’t blow.

The second is the development of projects that do much the same thing but this time by the physical combination of  wind, solar and some form of storage at the one site, or nearby. Proposals and projects are now emerging across the country.

One of the first “solar firming” products came from TFS Green, who helped put together a package for ERM Power that takes the risk out of contracting with a solar farm.

This is a product that simply seeks to manage the risk from variable solar output by providing price swaps. It allows a solar plant to provide a customer with a firm price for a flat load.

Around the same time, AGL launched a wind firming contract (see graph above), while more recently Macquarie was involved in what is called a “proxy revenue swap” for a wind farm in Victoria that will provide “baseload” green power for packaging giant Orora.

These proxy revenue swaps also emerged in two deals done for another two solar farms in Victoria and Queensland. The term sounds complicated and non doubt is, but is essentially a hedging contract.

All of these developments, note analysts at Morgan Stanley, are potentially disruptive because it enables corporates to structure electricity contracts the provide firm power, and match their usage, without having to resort to the big retailers.

That allows innovative renewable energy developers like Simec Zen Energy to contract solar farms, match them with large energy users like miners and manufacturers, and provide firm supply.

Simec Zen has started to do this with 5 of the biggest energy users in South Australia, will extend it to its Whyalla steelworks and other major customers once it builds more solar, battery storage and a pumped hydro facility, and will then take it national with plans for up to 10GW of solar.

CWP, which is building the Sapphire wind farm in northern NSW, and is looking to add both large-scale solar and battery storage nearby, is also considering a move into retailing for exactly the same reason, head of development Andrew Dickson told the Large Scale Solar and Storage conference last week.

And this is where the crossover between contracting and physical delivery gets really interesting.

“We are moving towards our own retail capability in the future,” Dickson says. “We can aggregate and shape products to meet growing needs of industrial users in the NEM, and we can do so at very competitive prices.”

Dickson also agrees with Morgan Stanley’s assessment – shared by the likes of Ausgrid CEO Richard Gross – that the days of a few dominant – are numbered. “That’s not the future,” Dickson says.

Roger Price, the CEO of Windlab, also talks of fully dispatchable renewables – or, to borrow the parlance of the coal lobby, “baseload renewables”, with the Kennedy Energy Park inland from Townsville.

The first stage of this project is being built now, combining 43MW of wind, 15MW of solar, and 4MWh of Tesla battery storage. “Big Kennedy” will likely be 10 times the size, or 20 times the size, depending on local appetite.

“It’s the perfect match,” Price says. “You get solar in middle of the day, the wind resource picks up as the sun starts to set, blows through night, then drops after the solar” emerges for the morning peak.

Tilt Renewables is another looking to combine wind and solar, as well as battery storage, based around its already completed Snowtown wind complex in South Australia.

This graph above was given in a recent presentation that shows the average output for wind and solar – combining the two, and then backed up with some form of storage, enables them to provide a firm contract to customers, without getting pasted by gas generators pushing the wholesale price up to the market cap.

And, of course, there is the Kidston project in North Queensland, not farm from Kennedy, where Genex Power is looking to combine 270MW solar and 250MW of pumped hydro, with maybe 6-8 hours storage, and then add 150MW wind power for good measure.

The output will look like this graph above.

Like the other wind-solar combinations, wind generation is inversely correlated with the solar resources, the pumped hydro compensated for the variability of wind and solar, and Genex executive director Simon Kidston describes it as the world’s “first baseload renewable energy project.”

Except, these are not really “baseload” plants in the true sense, or in what the coal boosters imagine they are, because they don’t need to be.

But they are fully dispatchable, which is what is important in a modern grid. “It is dispatch able renewable energy on demand 24/7,” says Kidston. That includes overnight, and in periods of peak demand. The clean energy transition marches on.

  
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Battery storage • Featured • Renewables • Solar • Wind

    john

    Another one bites the dust
    Another one bites the dust
    and another one down and another one down
    another one bites the dust
    Apologizes to the song writer.

    Every week another myth is broken open and shown to be dismally misinformed.
    With sufficient Wind Solar Battery and PHES then RE can supply power.
    Add Solar Energy Storage to the mix and we have another that can be used to ensure in the worst outcome situation that power will be reliably supplied.
    OK you may say this is only tiny compared to the amount of FF generation at present.
    Granted but build more and more of the above especially where resources are favorable near large load, then this will become the energy mix that the country will build.
    It is possible a large HVDC Transmission line may be needed to bring power from the west to the east and if the figures stack up this may be put in place.

    There are a large number of FF Generators that will get to end of life over the next 20 years and they need to be replaced.
    As i see it the above will happen plus there is another energy source not in the mix and that is tidal and wave energy of which there is an abundant supply not even tapped to any extent as of yet.
        Ralph Buttigieg

        Yeah, looks good but can we wait until its actually built and run for a year or two before claiming victory?
            RobertO

            Hi Ralph Buttigieg, And can we also bring the time table forward to say 10 years (5 to 7 years would do me but I am an optimist) From a practicable look we could if we wanted to, but the Fed Gov would need to agree to it and move quickly, if only they would get out of the way.
    William Grace

    Although these developments are logical in the present circumstances it will be more efficient in the end for storage to be ‘pooled’ at network level rather than twinned with individual generation to produce a ‘firmed’ generation profile. I wrote about this at the time of the now forgotten Finkel Generator Reliability Obligation – see here https://sustainableplaces.com.au/finkel-wrong-storage/
        Ren Stimpy

        Wave generation?
            William Grace

            Definitely – wave generation strongest in winter when solar is weakest. Reduces necessary storage. LCOE of total system including storage is more important that LCOE of each form of generation.
                Ren Stimpy

                Wave generation is not even a thing yet. Not even a tiny fraction of a percent. Don’t even try to give us a “definitely” before you have even tried to establish a business case, you dickhead.
    Chris Fraser

    It tends to put importance back on transmission and connectivity. Assuming the capacity of the system is OK, it seems a strong argument for higher levels of utility scale wind and solar.
    Tim Forcey

    “Caseload” or “baseload”?

    Typo above?
    Ralph Buttigieg

    Thanks Giles for continuing to confirm my belief we don’t need NEG, Federal emission targets , carbon taxes etc.
    As you say we will be 33% RE around 2020. But theres more good news to come:

    Aprox percentage renewables (from memory)

    SA 40%
    Tas 100%
    ACT 100%
    Vic 40% by 2025
    QLD 50% by 2030
    NSW 19% now more in 2020s
    Plus about 1GW on rooftops a year

    So its going to be 40-50% sometime in the mid 2020’s I would think.
    More when Snowy 2, Battery Tasmania , extended networks or whatever come along to stablise the system.

    Hysterical ranting about the “extreme right” might be good click bait but achieve little more. Seems RE is now beyod the tipping point. They don’t need subsidies (the RET certificates will be worth SFA after 2020 anyway) nor emission targets.

    What is needed is to stop the socialists build expensive subsidized coal burners, a do no harm approach.
        Ren Stimpy

        If by stop the socialists you are referring to Tony Abbott and George Christensen, those two Captains of government, then I agree.
        Kevfromspace

        SA is at 50%, while ACT and TAS are not quite yet at 100% – closer to 85 or 90% right now.
    Jon

    It’s looking good on an “average day” basis especially with a bit of time shifting inside the day or across a couple days.
    The harder but is when there’s a few cloudy days in a row or a large high pressure system than hangs around for a few days becalming the turbines.
    It’s great to see this happening and the more generation systems are spread around the less localised conditions will disrupt the network.
    Some fairly major transmission upgrades and big pumped hydro is needed to tie it all together I recon.
    Brian Tehan

    I’ve been for lots of winter holidays up around near there off the coast. My recollection is that the maximum wind is in the afternoon, regular like clockwork (it’s annoying). I’ve looked up recentBOM stats and yes, the maximum wind appears to be between about 12pm and 5 or 6 pm – on the coast and Inland at Hughenden where the farm is. I’m not sure when the information for the graphs was recorded.

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