Tag Archives: wind power

Wind power helping lower electricity prices

Originally published on the Beyond Zero Emissions (BZE) blog.

When it comes to wind energy for every setback there has been some good news.

In August, the Victorian government amended state planning rules for wind energy. The changes applied onerous conditions on wind energy projects and arbitrarily set up exclusion zones for vast tracts of the state. Whether it’s a community-owned project like Hepburn Wind or a utility-scale development, wind energy projects will be a lot harder to build in Victoria.

As Beyond Zero Emissions Executive Director Matthew Wright noted, “Ted Baillieu has put the brakes on Victoria’s transition to 100 per cent renewable energy.” The wind industry will now focus investment in states with reasonable planning policies and without the ideological opposition to renewable energy.

One such state is South Australia, where just a day after Baillieu’s backward step Labor Premier Mike Rann endorsed the construction of one of Australia’s largest wind farms—a massive 180 turbine, 600 MW farm that will generate enough electricity to power 200,000 homes every year.

This isn’t the only good news story about South Australia’s wind energy sector, which currently provides around 20 per cent of the state’s electricity. The increased penetration of wind energy is reducing the cost for consumers. This experience flies in the face of the fossil fuel lobby’s  ‘Can’t Do’ campaign’s claims that renewable energy will increase electricity bills and should not be built.

“While the levelised cost of energy from wind farms is higher than that of baseload coal and gas,” explains Giles Parkinson at Climate Spectator, “the deployment of wind energy here and overseas is having a surprising impact on energy market prices: it is causing them to fall.”

Why is this so?

The concept of the “merit order effect” is not one often discussed in the mainstream media, but it is the reason for wind resulting in reduced energy costs.

The national electricity market utilizes a “merit order dispatch system” (also known as “economic dispatch“). In this system, all energy production capacity (be it wind, coal, solar or gas) is ranked according to the price the generator bids into the market. Generation capacity is dispatched in order of merit (i.e. from lowest cost and upwards) to meet the demand (dispatch target) for a trading period. “The final price is set by the last generator needed to meet demand”, explains Parkinson of the merit order mechanism. “The higher the demand, the higher the price paid by all.” This merit order system ensures the system demand is met for the lowest possible cost.

The bids placed by the generators generally reflect the short run marginal cost of the generator, and typically renewable sources (e.g. wind and solar) have low marginal costs. As such, they are ranked lower in the merit order than high marginal cost plants (e.g. gas). Renewables, through the merit order dispatch process, can therefore defer or even avoid the dispatch of higher marginal cost generators, and consequently avoid the associated higher pool prices. Renewable generation can result in lower wholesale electricity prices than would otherwise be experienced.

Climate Spectator reported that Windlab Systems modelling suggests the proposed 700MW Kennedy wind farm in Queensland would cause pool prices to fall by about 9 per cent due to the merit order effect. Parkinson writes that this would equate to savings in costs to consumers of around $330 million, not including further cost benefit from a reduction in transmission losses because of the proximity of the wind farm.

Decisive action is needed from Australia’s politicians to grow the wind industry, which is ready to provide Australia with a massive swathe of clean, renewable electricity. Aside from reducing the carbon-intensity of our electricity sector, wind energy developments can result in savings for consumers meaning there are plenty of good reasons for politicians to act.

– BZE Media Team

Ted Baillieu – Premier of Victoria or coal industry rep?

Ted Baillieu with fellow climate change denialist Tony Abbott (Picture: John Hargest)

The fossil fuel industry is sure getting their money’s worth with Ted Baillieu and his Liberal/National Party Government.

In Ted Baillieu’s Victoria, building a wind farm is now almost impossible and the feed-in tariff for solar panels has been cut by over 50%. However, building a coal mine 800m from a primary school is OK, and if a mining company wants to dig for coal or drill for gas in your backyard, polluting our land, water and air, there’s nothing you can do about it.

Last week the Baillieu Government attacked renewable energy on two fronts. First, they introduced new planning laws that allow anyone within 2km of a proposed wind farm to veto the proposal. The Clean Energy Council estimates that this will cost Victoria $3.6 billion and thousands of jobs, as wind energy companies move to other states and other countries. Victoria’s population density means that it will be virtually impossible to build any more large-scale wind farms beyond the ones which already have planning approval.

However, destroying the wind energy industry wasn’t enough for Ted, two days later he announced that the feed-in tariff for solar panels (photovoltaics) was being cut from 60 cents per kilowatt hour (60c/kWh) guaranteed for 15 years, to 25c/kWh, guaranteed for 5 years. Estimates are that this will blow-out the payback period for putting solar panels on your roof (the time it takes before the amount you save on electricity covers the amount you spent on the panels) from around 7 years to around 14 years. Again, thousands of jobs and large sums of investment money will be destroyed.

Not only are Baillieu’s 19th Century energy policies costing jobs, increasing our reliance on coal and damaging our economy, they will also result in higher electricity prices. When the wind is blowing, or the sun shining on a hot day, wind and solar power can provide electricity cheaper than coal and gas power plants – driving down the average cost of electricity over a period of time (for more info on this click here).

So the question to ask is why? Why is Ted Baillieu willingly driving up the cost of electricity, cutting jobs and investment? Why is he destroying an industry that has around 90% support amongst the Australian public? Why is he abandoning climate action when he himself voted for a 20% by 2020 emissions reduction in the Victorian Parliament in 2010? The answer to these questions is in who is benefiting from these policies.

As is often the case with energy policy in Australia, the beneficiaries of Baillieu’s policies are the powerful and well-connected fossil fuel industry, in particular the gas and coal-fired electricity generators. As mentioned above, once a certain amount of renewable energy is built into our electricity grid the average wholesale price of electricity begins to fall – eating into the profits of the coal and gas companies. If renewable energy is held back, then these companies can continue to bring in exorbitant profits and consumers get stuck with ever increasing electricity prices and greenhouse gas pollution.

Don’t let Baillieu get away with it. As a start, you can send him an email by clicking here.

Join the backwards march!

Put this one in your diaries! We are having a backwards march to show our anger at how Victoria is going backwards under Baillieu. Sunday 13 November, 1pm, Parliament House.

* Cattle trampling our national parks
* New wind farms blocked and solar energy attacked
* Co2 emissions target ignored
* Endangered species habitat logged
* New coal-fired power station approved and funded with taxpayer money
* Anglesea coal mine continued
* Green Wedges threatened
* Westernport destruction fast-tracked

For more information click here.

Premier Baillieu said he would ‘fix the problems, and build the future’, but when it comes to climate change and our environment his government has created new problems and is threatening out future!

His government has no formal environment or climate change policy, and no clear vision for a more sustainable Victoria.

So after 12 disappointing months we’re marching backwards to demonstrate the direction the Premier is taking us.

JOIN HUNDREDS OF OTHER CONCERNED VICTORIANS TO TURN THINGS AROUND FOR OUR ENVIRONMENT AND ASK: WHERE IS YOUR PLAN PREMIER?

The real public opinion on renewable energy

Originally published in ABC’s The Drum.

By Andrew Bray

As the shift to clean energy transforms the competitive landscape of the world economy, Australians face some very big decisions indeed. The cheap, fossil fuel-based energy that has been our economic trump card until now is starting to look more like a dud hand.

So where do Australians want to get their energy from in the future and what do they think about renewable energy as an alternative?

It suits the Opposition and some sections of the media to pretend that the only thing we care about is our cost of living but you’d think Australians would be smart enough to walk and chew gum at the same time. We all watch our bills but that doesn’t stop us from also considering issues like pollution and the costs of energy into the future.

So to test the case, the 100% Renewable Energy campaign decided to bypass the media and get it straight from the horse’s mouth. We wanted to hear directly from our communities what they thought about renewable energy.

From February to May of this year, community groups associated with the campaign conducted over 14,000 face-to-face conversations at people’s doors, in their lounge rooms, at markets and community events and on the sidelines of football matches. Conversations took place from Bega to Bunbury and Cairns to Hobart.

The sheer number of people we spoke to eclipsed any of the focus groups or randomised polls that are traditionally used to gauge the public mood.

The support we found for renewable energy was overwhelming. The people we spoke to support renewable energy and they want to see politicians get on with the job of bringing it online.

Some 91per cent of participants thought that the government should be implementing strong policy to support new jobs and investment in renewable energy while 86 per cent of participants thought Australia should develop a plan to move to 100 per cent renewable energy.

Another finding was that 90 per cent of the people we spoke to thought we should be installing more renewable energy to counter rising energy prices.

This might come as a surprise given recent publicity about rising electricity prices, but it shouldn’t. The Australian Energy Market Commission (AEMC) identified in its recent report that the three main causes of rising prices were investment in ageing infrastructure, increasing costs of fossil fuels and uncertainty about carbon pricing – none of which involved support for renewable energy.

By contrast, the recent history of solar PV in Australia has demonstrated that the more it is installed, the cheaper it becomes. The cost of small grid systems dropped in price by 40 per cent last year according to the Australian PV Association and we can expect to see a similar trajectory with large scale solar as installations begin here.

But perhaps more interesting than the survey figures were the over 4,000 comments we recorded when the conversations switched to general discussion.

Madge, an 82 year old woman from Townsville interrupted her daytime TV to speak with us. After being reassured that building more renewable energy won’t mean giving up her air conditioning, she told us “Well of course I want solar, I’m a Queenslander!”

David, in Dulwich Hill, Sydney, exclaimed “I can’t understand why we aren’t just using the sun and the wind. It’s just common sense.”

Indeed, the common sense we heard directly from thousands of Australians was the most valuable discovery of the conversations and “just get on with it!” was the sentiment we heard the most.

Common sense isn’t generally associated with government decision making and nor is it readily apparent in the din of vested interests bellowing at the government through the headlines.

So if the government wants to introduce some of this common sense into its carbon pricing package, how would they go about it?

Julie from Tasmania expressed it well when she told us “Tax big polluters. Use the profits of the tax to fund research for renewable energy. Make substantial change and jobs and investment will come.”

The plan to price carbon pollution has been a difficult sell for the government but if they could tap into people’s attraction to renewable energy and deliver significant new funding for research and commercialisation, they could find their plan much more popular than it currently is.

And that kind of leadership would be applauded by the likes of Paul in Orange, NSW: “Australia should be a world leader in renewable energy. Instead we lag behind the rest of the world.”

The final word should go to Dot, a 92 year old woman from Campbell’s Creek in Victoria.

“Go ahead with renewable energy. God gave us a brain and it’s up to us to use it. There has been enough talk.”

You wouldn’t have thought it was rocket science.

 

Andrew Bray is an organiser for the 100% Renewable Energy campaign.

Doorknocking for 100% renewable energy

The doorknockers get ready to hit the streets

Around forty people spent last Saturday afternoon doorknocking in Clifton Hill and North Fitzroy as part of the 100% Renewables campaign. Doorknocking happened in around 40 neighbourhoods and towns all over Australia capping off a few months of action, where ordinary people knocked on the doors of their neighbours and gathered 20,000 conversations about renewable energy.

Yarra Climate Action Now and Darebin Climate Action Now collected over 500 surveys, or ‘conversations’, in the inner-north of Melbourne, covering the federal seats of Melbourne and Batman. We found overwhelming support for a transition to 100% renewable energy, not only for climate reasons but also because renewable energy creates jobs and will reduce the price of electricity. While a carbon price was supported, it was clear that additional measures like a large scale feed-in tariff are urgently needed to build more wind and solar thermal energy plants.

Well done to the many doorknockers and thanks to the local residents who spoke to us. Your voices will be heard in Federal Parliament at the end of June, when independent Rob Oakeshott tables the 20,000 surveys. We will also deliver the results for each electorate to the individual political representatives, and full results will be posted on this website when they are available.

Renewable Energy: how it reduces the cost of power

From 100percent.org.au. To get a printable pdf version of this fact sheet click here.

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For years the prevailing public view has been that renewable energy will make electricity more expensive. Now, as more countries move towards a renewable energy future, evidence is showing that more renewable energy in the mix actually results in cheaper power, and offers to do the same for Australia.

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International experience: enjoying the benefits

Some of Europe’s early adopters of wind include Germany, Belguim and Denmark. In April 2010 a study showed how wind power was causing a drop in the overall cost of power in these countries. It found that in 2009, the average wholesale electricity price fell in these countries by between €3 and €23 per MWh ($4.3 – $32.8 per MWh based on an exchange rate of A$1=€0.7). If this reduction in wholesale prices occurred in the Australian market and was fully passed on to the consumer, it would lower household electricity bills by up to 15%.*

Europe is not alone in reaping the economic gain of wind power. Since 2005 in the United States, the average wind project has been producing electricity at less than the national average wholesale price (see Figure 1 below). The only exception to this being 2009 as the global economic downturn lowered the cost of wholesale electricity, which you can see as an anomaly in the last data point. In short, this means that the effect of wind power in the US for the last five years has been to reduce the overall cost of electricity.

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Figure 1 – Average Cumulative Wind and Wholesale Power Prices Over Time, from the US DoE Wind Technologies report 2009

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What does this mean for Australia?

Studies from some surprising sources show that increasing Australia’s share of renewable energy would produce the same economic benefit here. A study from the Business Council of Australia (BCA) shows that increasing renewable energy in Australia through the Renewable Energy Target (RET) would result in a lower cost of power, compared to without the RET (see Figure 2).

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Figure 2 – difference in wholesale electricity price with and without the MRET. From the BCA report: Modelling Success, page 134

A study for the National Generators Forum** backs up this conclusion, finding that the RET would reduce the electricity pool price by 5%. Based on the figures in the National Generators Forum report, electricity retailers would be $10 billion better off in 2015 with the RET than without it.

The Business Council of Australia and National Generators Forum haven’t exactly been the biggest supporters of renewable energy over the years for reasons outlined below. However, even their own reports can’t avoid the fact that renewable energy is a good thing for electricity prices.

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How is renewable energy lowering the cost of power?

Renewable energy has a few important advantages over conventional fossil fuel power that produce these economic benefits. Because renewable energy power plants are normally smaller and more distributed through the electricity network, it makes for an electricity grid that is more stable, with numerous points of power supply and more resilient to disruptions to infrastructure or peaks in demand. Further, most renewable energy power plants have zero fuel costs. As they are greenhouse pollution-free, they don’t have to worry about carbon costs. Less moving parts on many power plants also means renewables are easier to maintain and operate. Basically, when a renewable energy power plant gets built, it will run for next to nothing.

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Why then is it more expensive to purchase green power?

In complying with renewable energy target policies, electricity retailers need to prove that they have bought enough renewable electricity from the wholesale market. This comes in the form of renewable energy certificates, each one representing a unit of clean energy. The certificates and the energy they represent have a set price, which the retailers pay and then pass on to the consumer.

However, that’s only one side of the story. In buying electricity from a market with lots of renewables contributing, the total cost to retailers will actually drop thanks to the economic benefits of renewable energy. Unfortunately, while retailers are all too happy to pass on the economic costs of buying certified renewable energy, we consumers don’t necessarily see them pass through the savings from renewables.

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So if renewable energy makes power cheaper, why are policies to support renewables opposed so much?

For most of us, renewable energy brings only benefits from cleaner, safer and more affordable power. The only real losers are the generators of old, dirty fossil fuel electricity. So competition is a major factor as renewables and fossil fuels are both in the same game of providing electricity.

But the major economic benefit of renewable energy is felt at times of peak electricity demand. When there is a major surge in demand – for example, on a hot summers’ day when lots of air conditioners are on – the wholesale electricity price often skyrockets hundreds or even thousands of times above the normal price. Peaks might not last long, but they are a major earner for the electricity generators. An example of these spikes in electricity cost can be seen in Figure 3.

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Figure 3 – Victorian wholesale electricity prices in late January 2009. Peaks are clearly visible during the day on both the 28th and 29th of the month. Graph produced from data accessed from the Australian Electricity Market Operator.

The benefits of renewable energy, outlined above, help to manage the electricity supply and demand, and soften the spikes in wholesale prices during peak times, meaning they are not as profitable for fossil fuel electricity generators. That’s why renewables are met with such strong opposition from the fossil fuel industry: they are threatening the profits of a few companies.

We can’t let the vested interests of a handful of dirty energy companies prevent a future of safe, clean, reliable and affordable power. We need to make the shift to a 100% renewable energy future now!

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*Assuming a final delivered electricity price of 20c /kWh is reduced by 3c / kWh).

**CRA International, 2008. Market Modelling to Assess Generator Revenue Impact of Alternative GHG policies, prepared for the National Generators Forum.

Melbourne launch of the Zero Carbon Australia Plan

100% renewable energy for Australia within a decade is possible and affordable. Come along to the energy event of the year to find out how.

This free public lecture will be the launch of the Zero Carbon Australia Stationary Energy Plan.

Hosted by the University of Melbourne Energy Institute.

Wednesday 14 July, 6-8pm

Basement theatre, The Spot, 198 Berkeley St, Carlton

For further information click here

Speakers:
John Daley (CEO Grattan Institute)
Keith Lovegrove (Solar Thermal Group Leader, ANU)
Lane Crockett (General Manager, Pacific Hydro)
Matthew Wright (Executive Director Beyond Zero Emissions)

Australia handicapped by 19th-century technology

Originally published in the Sydney Morning Herald on 3 Feb.

Renewable energy is the fastest growing power source in the world, and already generates baseload electricity on the scale of utilities. Large solar thermal plants with heat storage can dispatch power around the clock every day of the week regardless of whether the sun is shining, and make handsome profits during demand peaks.

Wind power is being installed on scales that dwarf Australian grid requirements. These and other clean energy technologies are replacing coal on modern grids. While Australia continues to throw money at 19th-century technologies, Spain, China, the US and others are charging ahead with zero-emissions power generation, and creating export markets.

Spain consumes about as much electricity as Australia, though its population is about twice as large. Like Australia, Spain is blessed with strong, consistent sunshine, and it uses this attribute to ensure energy security. Already it has built 24-hour baseload solar plants, using molten salt to store heat which is then used to create steam and turn turbines. It started with Andasol 1, a 50MW plant, and has now completed two similar projects. More than 1,800MW of projects are under construction and the government has just approved another 2,440MW for their feed-in tariff scheme for construction over the next three years.

The Gemasolar project is the shining light of the Spanish boom in baseload solar power. This solar thermal plant has created 1500 jobs and will operate at 60 to 100 per cent of maximum turbine output for up to 90 per cent of hours each year. Very low maintenance shutdown requirements allow this efficiency, far greater than coal-fired power generators in NSW. When the turbine is idle, heat is bled off the ”cold” 290-degree salt storage tank to keep the turbine seals warm, allowing fast starting – as seen in the best hydro and gas plants. This capacity for baseload and fast-start ”dispatchable” power generation places the Gemasolar plant among the highest-value electricity plants, a fact not lost on investors.

This solar generation capacity is in addition to Spanish wind power. Wind turbines supply 11 per cent of Spain’s electricity demand, and this will more than double to 25 per cent by 2020. Another 6000MW of wind power is approved for installation in the next three years. That is just shy of three plants the size of the Bayswater power station near Muswellbrook, with all the jobs but no emissions.

Spain is phasing out coal and nuclear, and the companies that built the nuclear plants have re-tooled to build solar thermal plants with heat storage. These companies did not want to own the nuclear plants they built, but they have set up investment vehicles to own solar thermal plants.

Compared to the 10 years it takes to get a nuclear plant up and running, solar thermal plants with 24-hour baseload capacity have construction times as short as nine months, so such projects are not exposed to the same political, industrial and financial risks as nuclear plants. Envisaging a lucrative market for their solar infrastructure and expertise, the Spanish anticipate a healthy return on any subsidies for these technologies.

To read on, click here.