Australia can move forward with renewables - by leveraging tariffs and the Prosumer

In the past we had limited but effective discretionary (or controllable) loads.

Today we have changed the consumption environment - changing to "prosumers" with a wide range of distributed energy sources and discretionary loads.

Our challenge is to engage the regulators to allow opportunistic "use of energy" and "dispatch of energy" based on the market price and grid capacity and constraints. In fact homes are morphing to predominately discretionary loads (EV charging, Hot Water, Pool pumps) rather than non-discretionary loads (lights, TV's, refrigerators).  Dispatch would include rooftop PV or energy stored in a battery. Discretionary use would include using your own battery, charging a car during a time when solar was not valued as feed in into the grid, or at night when the grid load is low and wholesale price is low.

Another day in politics 

Just had to throw this up at Twitter. Our Prime Minister is supporting coal. In fact there he is as its Chief Salesman. Just imagine if he got up and was selling a vacuum cleaner, or a can of coke... no, he gets up and tells us coal is great and it doesn't hurt you. 

In a world where both countries have experienced the six hottest summers in the last seven years, and where the last year has seen the worse wild-fires / bushfires ever. In the face of science you just go with the donation money and forget that you have to protect and serve.

Europe moves forward, and one step back in Australia

If you haven’t caught up with it, you should see the leadership in Europe outlined in the “Clean Energy for All Europeans Package”. It's inspiring to see the European Commission undertake this challenging but essential task.

What does amuse me sometimes is the American President being referred to as “the leader of the free world”. This European action represents leadership. Not failing to act in the face of one of the world’s most pressing problems. See:

http://europa.eu/rapid/press-release_IP-16-4009_en.htm

Clearly putting energy efficiency first, leading the charge in renewable energy is a massive ask to the European member states. One that my country Australia, and the US (perhaps I should exclude the Obama administration) have side stepped for too long, way too long.

My compliments to all those citizens in Europe that have enabled their leaders to embark on such a bold move. It reenergizes me to continue to lobby our government and work to help modernise generation and distribution companies in our Energy & Utilities sector.

In Australia we need stronger approaches to deal with climate change. A prime example of what’s wrong in our country is the announcement of the Queensland and Federal Governments’ support the Adani’s $21Billion Carmichael Coal Mine project. It had to go through an environmental approval process; but in Australia the environmental approval process excludes climate change impacts. So our leadership fails to count fossil fuel as an environmental impact.

Popular opinion at the end of the 1990’s committed the country to reduce carbon intensity (via the signing of the Kyoto protocol in 2005). However, from 1990 to 2012 Australia emissions from all sources (except land use and forestry) grew by 28%. Our government representatives were “cute” at the 1997 Climate Conference in Kyoto, getting concessions that the nations emissions could rise by 25-30% whilst we could “account this” as an 8% increase (increase over 1990 levels). The Australian delegation at the 1997 threatened to derail the conference unless we received special concessions. The “Australian Clause” as it came to be known allowed Australia to increase carbon emissions by 8% (but that accounts also for a 25-30% increase in fossil fuel emissions). So much for executing the will of the public.

So congratulations to the European Union. In the face of our performance in Australia – shame on our government – those people entrusted to look after our future, aren’t. They are making decisions like the Adani mine approval, and supporting the wrong targets.

Leadership “not” in Australia.

Hydrogen Economy - we might just get there

Whilst a languishing world economy needs low energy costs, when the predominate energy source is fossil fuels the chance of transformation to an alternative looks distant. Heartening is the continued push for alternatives. These alternative are at the production end (i.e. wind, solar, hydro, tidal, geothermal) and the storage point in the value chain. For road transportation, aviation and shipping electric energy storage has is detractions. A hydrogen economy seems one viable alternative. 

For a an overview of Hydrogen Energy - see here

http://www.conserve-energy-future.com/Advantages_Disadvantages_HydrogenEnergy.php

  

For a quick story on the potential - this might be of interest 

http://industry.gov.au/ONA/WhitePaper/Submissions/files/renewableh2.docx

Peak oil or not, the results of fossil fuel combustion is particulates and a mix of poisonous gases. The result of burning hydrogen is a fairly straight forward reaction:

2H2 + O2 → 2H2O

To get energy stored in the form of Hydrogen is an energy intensive process in itself. This is why the development of renewable inputs to our energy value chain are necessary. Remove fossil fuel from energy production, remove fossil fuel from energy storage and transportation - do it at an economic point of equivalence, and then we have a future. 

So back to the start of the dialog. Whilst the world economy is benefiting from low fossil fuel energy costs, the point of equivalence for renewables and the Hydrogen economy is a big stretch. If our investments in renewables drive us to this cost point then a jump in fuel price should make it a no brainer. I’m very happy to see that investments continue in the Hydrogen economy. One day as fossil fuel pushes up in price we may see a rapid transition. 

Who would call Tony Abbott stupid?

Well who would say our Prime Minister in Australia is stupid? Not I; even though the financial community across the world is supporting a transition to renewables.

The following article is from the Financial Times - 24th September 2014

Well, what would Rockefeller's investors know any how? They made their money in oil, and they now recognise when it's a lost cause. Yes, they would call Tony Abbott stupid.

Well, lets try someone else. How about Warren Buffet? That's the same guy that invested $15B from the world's most famous investment fund (Berkshire Hathaway Inc) in renewables and said this year that there's another $15B where that came from - he's betting the farm on it. Nice one Warren... Yes, he'd call Tony Abbott stupid.

The CEO of GE, Jeff Immelt priced carbon internally in GE from 2005, forcing lower carbon emissions. The market thought he was crazy until the 2008 oil shock (when oil rocketed to $147/barrel) and GE's diesel electric trains and jet engines which had been driven to the most efficient in the world had order books the envy of every other company. Jeff said when he was in Australia a few years ago that the Australian Government was crazy for not having an ETS.  So I think definitely Jeff would call Abbott stupid.

In fact, many companies around the world including Shell and BP price CO2 internally to bring about a certain behaviour. Ha, not Australia, we dropped our Carbon Tax!

So, do I call Abbott stupid? No, I don't have to, many much more eminent people than I would stand up in front of me to call Abbott stupid. Why should I waste my breadth? He doesn't listen anyway.

Renewables finally supported in the US

Great news:

Buffet's agreement could boost solar power in the U.S.

Buffet is unreal - how fantastic is this? In the last few years Buffet places 10M shares (worth $31B) with the Gates foundation to fight critical illnesses of the poor; he props up key financial institutions in light of the GFC; and now gets money focussed back on renewables - helping to address the issues of climate change after sections of the press have deluged the media with fear and doubt about climate change. I can't quite understand how the media have better knowledge than climate scientists; but obviously bright forward thinking people like Buffet take positive action and put their money where their mouth is - taking this very positive solar power action. Good on you Warren!

The religion of climate

I have to have a laugh sometimes. Someone said to me recently “Do you believe in Climate Change?”. My answer? “I didn’t know it was a religion”. I asked the person if they had looked at the science behind climate change. They said yes. I said “do you accept the science”. They said no. I said “what alternative analysis do you have”. They looked at me blankly. I think really they didn’t want to accept the premise of consequences that the science of climate change predicts from changing our atmospheres 200ppm of CO2 to 350ppm CO2. There is always a consequence to changing a balanced condition. The answer is if we change the conditions back (to 200ppm) can we recover from climate change. The scientist proposition is if we hold carbon to less than 400ppm we should hold climate change to 2C. That sounds like a feasible goal and a desirable goal. So why are we arguing rather than acting?

Because we don’t want to accept the presented science facts. We have accepted the science on skin cancer….. so we keep out of the sun. We have accepted the science on CFC’s and the Ozone hole, so we have created substitutes. We have accepted the science of lead and heavy metals as a poison, so we have modified paint and substituted lead in petrol. We have accepted the science of Acid rain, so we scrub coal fired power station exhaust from SO2 by-products. We have accepted the science of increased food production from Genetically modified plants, we have accepted electricity, electronics, Xray machines, antibiotics, plane flight, cellular telephones, TV, computers… all the results of science and legitimate research…..but apparently we listen to a plethora of non-climate scientists tell us not to “believe” in climate change. We might as well ask a geologist to do brain surgery since we want to ignore the specialist we have trained and educated to tell us about climate and the consequence of 400ppm.

So, when someone next asks you if you believe in Climate Change, ask them what religion they are pedalling, because it’s not an opening for true fact based scientific debate.

Townsville – can it break the nexus of high power costs?

After 3 weeks in Townsville (on the Townsville Smart City Challenge) I am energised at community spirit and support around sustainable practices and energy conservation efforts in an Australian city.

The two accelerators driving escalating (and almost runaway) costs for electricity in Australia are peak demand and fuel source costs. (refer AGL report)

Peak demand drives sizing for an electrical distribution network to a level that is uneconomic, or unsustainable. What Townsville have done in a community engagement program, and district cooling programs is commendable. Reshaping demand so that the network does not require 3 times the base load capacity for a few hours on the hottest days in the hottest weeks; because engineering this type of network is like building a road network that provides no congestion in a large city between 8am and 9am. Imagine, building a 12 lane highway and on-off ramps that doesn't congest in peak hours but is almost empty the rest of the time! Too, too expensive……… but that’s how we build energy networks today. They have the capacity to run everything connected at peak load times, and they sit relatively under capacity the rest of the time. The alternative is like road congestion; in electricity we could shed load which means turning off suburbs – and largely we have avoided that to date. Where I live in Brisbane there is a classic example. For 90% of the time the load is less than 3GW in the entire city. For less than 0.01% of the time the load is over 4.5GW. So the capacity for the extra 1.5GW is used less than 100^th (actually less than 1000^th) of the time; but Energex has to supply that capacity. In poles and wires and substation capacity let’s just say an extra 50% capacity has to be added. That’s a lot of money in a multi-billion $ grid.

Townsville have started to address this with mechanisms such as, white roof initiatives to reduce maximum heat absorption in houses and therefore maximum cooling load. District cooling that cools water down outside peak hours and uses the cold stored water for cooling during peak hours (relieving the need to run air-conditioning compressors at peak time). There are many other initiatives – such as LED lighting, all to be commended for the way it reduces consumption and peak load. Simply put, the city becomes more affordable!

The next issue is source fuel cost. Peak Oil that I have written about before has occurred. Peak Oil means production of oil based fuels is reducing whilst consumption (driven by the economies of China and India) is increasing. The result here is obvious. Any commodity; that gets scarcer, or particularly where supply is less than demand increases at an unsustainable rate. We even saw this with Bananas in Queensland after cyclone Yasi. Bananas went from $3.50 to $4 per kg to $12 - $14 per kg after the cyclone and floods. Of course this will come back down when supply increases…. But on the fuel front supply won’t increase… read more on peak oil and you’ll understand the false sense of security we have now.

Listen to the ABC science show podcast

Read further - Dr Fatih Birol, the chief economist at the International Energy Agency (IEA) in Paris:- IEA reading also see his video

Oil price increases (or constraints) will knock on to gas prices and coal prices as substitution occurs. All fossil fuel sources are linked to the price of oil….

Cooper String, a clean energy corridor is part of an answer to relieve Townsville of the need to source fossil fuel based energy from South Queensland. It is renewable based which is reducing in cost of construction over time, whilst fossil fuel based energy is increasing. It doesn’t take a mental giant to see that a point in time the renewable source cost will be less than the fossil fuel costs – making Townsville and surrounding communities a more affordable place, with a higher intrinsic level of energy security.

On top of this, the other impact of Townsville sourcing coal based generation from South East Queensland is the water impact. Water is scarce in south east Queensland the majority of the time. However 1KWh of power generated by a coal fired power station uses up to 15 litres of potable (drinking) water. In Queensland’s case the figure is much lower, probably around 2 litres per 1KWh (given constraints and the hi water efficiency coal fired generators used) – we are drawing water from South East Queensland - an area that has built a desalination plant to supply enough drinking water for Brisbane! For every cubic litre of water made through desalination we need over 2.5KW of power to create it. Does anyone see the sense in that? No, unfortunately we plan water and power quite separately. So water uses lots of power, power uses lots of water – renewables are potentially a non-water using source (ie wind and PV). Conservation and renewables are part of a bigger picture of survival and economically healthy futures. Releasing Northern Queensland from coal fire power in South Queensland looks after the precious commodity of potable water and its associated high energy requirements (to run desalination).

Sense from a high level planning point of view releases Townsville from southern coal fired power production. Cooper String is one such answer to this power / water dilemma. In the above scenario a carbon tax in Australia also accelerates an important departure from fossil fuel and becomes a strategic element for sustaining our affordable way of life.