Some lessons from Australia on clean energy opportunities and challenges for electricity grids, large and small

Presented by Iain MacGillAssociate Professor, School of Electrical Engineering and Telecommunications; Joint Director (Engineering), CEEMUniversity of New South Wales, Sydney, Australia

March 1, 2018

Some lessons from Australia on clean energy opportunities and challenges for electricity grids, large and small Iain MacGill Associate Professor, School of Electrical Engineering and Telecommunications Joint Director (Engineering), CEEM

Payne Institute for Earth Resources Seminar Series Colorado School of Mines

Denver, 1 March 2018

The lessons are also questions

2 Lessons on sustainable electricity industry transition

3 Lessons on sustainable electricity industry transition

A collaboration between the Faculties of Engineering and Business, working with Science, Built Environment, Social Sciences, Law Sustainable Energy Transformation

– Facilitating high future renewable energy penetrations – Sustainable energy services in developing countries – Clean energy technology assessment

Energy & Environmental Market Design, related policies – `Designer` renewable & energy efficiency markets – The interface between electricity markets and `external` policies

Distributed energy – Technical integration challenges and opportunities – Market and regulatory frameworks to facilitate efficient distributed

energy investment, participation by energy users

Sustainable Energy Transformation– Facilitating high future renewable energy penetrations– Sustainable energy services in developing countries– Clean energy technology assessment

CEEM‘s research focus

Lessons on sustainable electricity industry transition 4

Distributed energy– Technical integration challenges and opportunities– Market and regulatory frameworks to facilitate efficient distributed

energy investment, participation by energy users

A destination – shaped by energy trilemma Can we have it all, choose any two, might we get none?

5 Pathways to a clean energy future

(World Energy Council, 2016)

IEA pathways

6 Lessons on sustainable electricity industry transition

(IEA, World Energy Outlook, 2017)

Energy options - Australia spoilt for choice

Pathways

to a clean ener

gy futur

e

7 (Geosciences Australia, 2012)

To date, Australia’s chosen path..

8 Lessons on sustainable electricity industry transition

(Australian Energy Statistics Update, 2017)

The Australian National Electricity Market

Lessons on sustainable electricity industry transition 9 (Finkel Review, 2017)

.. eg. South Australia

10 Lessons on sustainable electricity industry transition

(IEEFA, Power Industry Transition, here and now, 2017)

(Clean Energy Council Market Update, 2017)

Australia a unique restructuring example

NEM lessons for liberalisation and regulation 11

(IEA, Power Markets and RE, 2016)

Wholesale market prices

13 NEM lessons for liberalisation and regulation

(Grattan Institute, 2017)

… and volatility

NEM lessons for liberalisation and regulation 14 (AER, State of the Energy Market, 2017)

‘Market driven’ investment, divestment

NEM lessons for liberalisation and regulation 15 (AER, 2017)

Retail pricing – does this look like success?

NEM lessons for liberalisation and regulation 16 (AER, 2017)

(AER, 2017)

(The Australia Institute, 2017)

Residential PV penetration

Lessons on sustainable electricity industry transition 17

(Finkel Review, 2017)

Distributed ‘rooftop’ PV now an increasingly significant wholesale market issue

(APVI Solar Map, 2018)

Resource adequacy tightening

NEM lessons for liberalisation and regulation 19

(Grattan Institute, 2017)

SA blackout – Was it wind?

A complex question

Electricity industry run to remain secure, major failures almost always involve multiple factors

Wind and residential PV added to the challenges

20 NEM lessons for liberalisation and regulation

(reneweconomy, 2016)

.. at present time amongst the world’s most expensive, wholesale, retail and utility scale VRE electricity, fair reliability, amongst world’s most emissions intensive as well .. and who’s to blame? VRE, gas market, market power?

21 Auctions/tenders vs the RET - costs vs value

(ACCC, 2017)

(AER, State of the Energy Market, 2017)

Variable renewables and reliability

22 Lessons on sustainable electricity industry transition

(IEEFA, Power Industry Transition, here and now, 2017)

Renewables costs - Recent policy efforts increasingly auction / tender based

(IRENA, 2017)

Auctions/tenders vs the RET - costs vs value 23

How can they reduce renewables costs The cost of most renewables is mostly the cost of Capital ..and the cost of Capital is mostly the cost of Finance ..and the cost of finance is mostly the cost of Risk Low cost renewables is low financial risk renewables and auction/tenders have excellent risk profile for project developers

Auctions/tenders vs the RET - costs vs value 24

… and associated tenders to date

Falling costs, and these are bundled energy ‘black’ and REC ‘green

Reasonably high transparency

At present, renewables PPAs in Australia are coming in at less than wholesale prices, the ‘clean energy ‘ is effectively free

25 Auctions/tenders vs the RET - costs vs value (Climate Council, 2017)

Off-grid supply

28 Possible lessons for RE integration in Myanmar from the Australian experience

Generally highly subsidised

PV’s now increasingly competitive as ‘fuel saver’ on diesel grids

Opportunities for 100% renewables (+storage) on remote grids

Mini-grids implemented, operated by utilities – Growing interest, capability

in RE and RE integration although still much to learn

(AECOM/ARENA, Australia’s off-grid clean

energy market, 2014)

Solar SeTUP

Lessons on

sustainabl

e electricity

industry

transition

29

(NT Power and Water,

2016)

Pushing higher PV in Diesel grids

Lessons on

sustainabl

e electricity

industry

transition

30

(NT Power and Water, 2016)

Higher penetrations – smarter PV, diesel, storage and load control

Lessons on

sustainabl

e electricity

industry

transition

31 (NT Power and Water, 2016)

What exists is possible MW scale solar + battery mini-grids with no synchronous units ..however, performance under major disturbances? ..and what of transition to greater power electronics interfaces

32 Lessons on sustainable electricity industry transition

(Tesla project on American Samoa)

Where next? State RE targets in the NEM

33 Auctions/tenders vs the RET - costs vs value (Climate Council, 2017)

A framework for policy

Lessons on sustainable electricity industry transition 34

Open data, tools

35 Lessons on sustainable electricity industry transition

Where next? "The best way to predict your future is to create it!" Abraham Lincoln

“Keep calm.. & carry on” Thoughtful, careful, efforts

36 Lessons on

sustainable

electricity

industry transitio

n

37 Lessons on sustainable electricity industry transition

Many of our publications are available at:

www.ceem.unsw.edu.au

Thank you… and questions