Australian Wind Power Forecast: 75% Chance of More Blackouts Next Summer

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When your power supply depends on the weather, it somehow seems fitting that the chances of having power should be forecast in much the same way.

Robert Gottliebsen is a finance and economics columnist with The Australian who has been out and about, talking to engineers about Australia’s energy crisis; and seeking to fine tune his blackout forecast, following the closure of Victoria’s Hazelwood coal-fired power plant, representing the loss of 25% of Victoria’s base-load generation capacity; capacity that has, until now, not only kept the lights on in Victoria but in South Australia, too.

Energy crisis will be worse than expected, with costly blackouts coming
The Australian
Robert Gottliebsen
20 March 2017

I have moved around the country to find out exactly how bad is the Australian energy crisis. I located people who, unlike the government officials who advise politicians, actually know what is happening and are anxious that I pass on the information to my readers, and therefore the nation.

The looming crisis is much worse than I expected. Three state governments, Victoria NSW and South Australia, have vandalised our total energy system. The Premiers of each state clearly had no idea what they were doing and did not sit down with top engineers outside the government advisers to work out the best way to achieve their objectives — whether that be an increase in renewables or gas restrictions.

Not until Josh Frydenberg came to be energy minister did the Commonwealth start to understand the extent of the disaster. Prime Minister Turnbull and Frydenberg have taken the first step in overcoming the problem with the Snowy pumped hydro scheme, but it is only a small step and will take two or three years to be effective.

Here is what some of the best energy engineers in the country tell me:

• Without urgent action residents of NSW, Victoria and South Australia have a 75 per cent chance of blackouts next summer if the Hazelwood power station shuts on April 2. Those blackouts will cost the nation tens and tens of billions of dollars in the food, medicine and processing industries.
• Without government action gas supply might, repeat might, be sufficient in this year’s (2017) winter but there is no doubt there will be major shortfalls in the 2018 and 2019 winters;
• The Gladstone venture, in particular the Santos consortium, in effect “shorted gas” — i.e. signed contracts to sell gas they did not have while Shell has gas in the Bowen Basin but it is proving more costly to extract than expected Australia’s energy mess to spark our own Trump revolt.
• All industries and consumers will experience much larger energy costs from the network — but to be safe must also consider spending vast sums to be prepared for the power and gas shortages. This is third world.
• We have a power grid that has not been engineered for the decentralised sources of power that we are now generating led by renewables; many billions must be invested to make it efficient and that will have to be paid for by power users. The knowledge of how best do this is not held within the state or federal governments.
• The Snowy will help longer term but it won’t overcome the short-term crisis and many more Snowys are required.

So let’s go through some of those conclusions step by step and look at the causes and options

Blackouts are coming

Residents of NSW, Victoria and South Australia have a 75 per cent chance of blackouts next summer.

In the summer just past it was very hot in NSW and Northern Victoria, but cooler in Melbourne. We had blackouts in South Australia and went close to blackouts in Victoria/NSW when several NSW generators hit technical problems. If the wind and solar generation units installed to replace coal fail, as occurred in South Australia, there is not sufficient backup both in raw capacity and in network design.

To lock in the likelihood of blackouts for next summer the Victorian government is encouraging and allowing the closure of Australia’s largest generator: Hazelwood. Without Hazelwood, if it is simultaneously hot in Sydney and Melbourne blackouts are certain unless there is also a lot of wind in the right places and the network can get the power to the capitals. Answer: subsidise Hazelwood’s continuation at least until a clear plan is engineered to replace it (maybe NSW generators need to be boosted; certainly totally new back-up systems to solar and wind must be devised and implemented).

The problem with back-up gas (or any other sort) is that if you are producing large amounts of electricity from wind and solar then these back-up plants are only required for, say, 10 or 20 days a year. It makes them very high cost and totally uneconomic.

That’s why Engie’s Point Pelican gas plant in South Australia was shut during the crisis. The cost of erecting and running uneconomic back up plants to wind and solar must be costed into the renewables projects. It has not been.

Without government action gas supply might be insufficient in the coming 2017 winter and shortages are certain in the 2018 and 2019 winters

Victorian and to some extent NSW gas is stored at the Iona and Longford gas storage facilities during summer so there is gas available in peak times during winter. Unfortunately this summer extra gas was used for power generation while the Gladstone LNG plants sucked gas from Victoria to LNG export which means that its going to be close as to whether there is enough gas available this winter in Melbourne and Sydney. Without government action there is no chance of there being enough gas in the 2018 winter. Current prices are twice the old domestic price might double again as shortages kick in.

Santos in effect ‘shorted gas’

The energy market says Santos and Origin consortiums in Gladstone “shorted” gas by signing contracts to export gas they did not have. The Origin consortium denies this (and I accept the denial) and says it has plenty of gas. It says that Santos is the only consortium shorting gas (my words). But it is very tangled. Shell has enough gas via its British Gas acquisition but it was expected to have Bowen Basin gas available to cover the net “shorts” of Gladstone.

In the early days of Gladstone saga, Origin and Santos had reserves as a joint venture and Santos did not dream Origin would set up a rival LNG plant partly using Origin’s share of the jointly owned gas. Origin left Santos in the cold to thwart a British Gas takeover bid (BG is now part of Shell). Again, it’s a very messy web.

Meanwhile, leaving aside individual consortium guilt or innocence, Gladstone in total is draining gas from Bass Strait and the Cooper Basin, offering much higher prices. There is available gas in Victoria and NSW but former NSW premier Mike Baird and Victorian Premier Daniel Andrews have stopped development.

Solution: People who short shares or commodities usually are aware of the dangers of such practices. Malcolm Turnbull and Josh Frydenberg need to teach the shorters the danger of such practices.

As I understand it, some 5 per cent of the Gladstone exports need to be diverted to the local market. That might be organised on a voluntary basis. If that can’t be done, the Commonwealth needs to use emergency powers to divert 5 per cent of the total Gladstone output to local use. Normally I would oppose such an action but we face an emergency, albeit partly brought on by Messrs Baird and Andrews.

National Party leader Barnaby Joyce needs to convince farmers that the Queensland scheme, which sees farmers enriched if gas is found on their land, will be implemented in Victoria and NSW via a condition in environmental approvals or some other mechanism. He also needs to convince them that fracking is safe although Victoria can cover the shortfall without fracking, an easy fix for our east coast gas mess. There is also gas that can be piped from Northern Territory and/or the Bowen Basin gas. But both deposits require time and money to produce and pipe the gas. Gas prices will stay high.

We have a power grid that has not been engineered for the decentralised sources of power that we are now generating.

A decade or so ago we had a centralised power grid where large amounts of power was generated from concentrated sources and was distributed to the retail network. Now power comes from a vast variety of sources that are geographically dispersed. Many industrial users have their own power and, of course, households have solar panels. All these power sources seek to export power via a grid that was not designed this way.

At present the system is an inefficient mess. The state decisions to install solar and wind power should have been accompanied by a very detailed plan to change the distribution system. This is the job for skilled engineers rather than by public servants and ministerial advisers seeking Green votes.

In the old days payment for investment in the grid was charged on the basis of power used. Many users with their own power generation capacity would like that to continue. But that means those in apartments without access to their own power generation will receive huge bills. The cost impost may therefore be imposed via a grid access change. To avoid it people will gave to go completely off the grid. Again as in back up power the extra investment in networks is part of the cost of going green

Its not that the solar and wind decisions were wrong but communities needed to be told the whole picture. The trouble was most politicians either did not know or did not want to know. They were after support from Green voters and the media.
The Australian

A pretty solid wrap-up by Robert Gottliebsen, but this line left us wondering whether he really had been paying attention to the engineers he’d spoken to:

If the wind and solar generation units installed to replace coal fail, as occurred in South Australia, there is not sufficient backup both in raw capacity and in network design.

Wind power and solar for that matter do not and cannot “replace coal” as a power generation source: coal-fired power is available 24 x 365, irrespective of whether the sun is out or the wind is blowing.

And the claim that South Australia’s power crisis is due the fact that wind and solar units ‘fail’, suggests that Robert believes that the routine events known as ‘sunset’ or ‘calm weather’ are not part of the renewable energy system’s ‘design’.

If the inability to produce power when the sun goes down or the wind drops counts as a ‘fail’, then those kind of ‘failures’ are a daily occurrence – just like the failure that occurred on 8 February this year, which left 90,000 South Australian families sitting boiling in the dark (see above).

Then there is Robert’s angle about people going “off grid”. That’s clearly happening in South Australia, but the businesses purchasing high-capacity diesel generation sets aren’t doing so willingly: it’s a matter of economic life or death.

And it’s all very well for Robert and people of his means to encourage people from the same strata to build mini power stations on their roofs and in their backyards, but there are plenty who are stuck on the lower rungs of the social and economic ladder who can’t afford to splash out $30,000 for a self-sufficient system of solar panels, Tesla batteries and generators. Vanity signalling is not cheap.

No, the less fortunate struggle to pay their escalating power bills until, one day, they reach the very limit of their means, the debt collectors are sent in and their power supply is cut.

Tens of thousands of homes are disconnected from the grid in South Australia with thousands more soon to join them: using gas barbecues to cook, hurricane lanterns for light and kerosene fridges or Eskys to keep their perishables from perishing (see our post here).

Australia’s Large-Scale Renewable Energy Target has not only destroyed the once world-standard reliability of our power supply, the rocketing costs of the subsidies and the need to throw hundreds of millions of dollars at state-owned batteries, diesel generators and gas turbines, as is about to occur in South Australia and $billions at an uncosted Snowy pumped hydro scheme is a form of malevolence against the poorest and most vulnerable in our society. Let’s call it a crime against the people.

Then there is the effect that rocketing power prices and an increasingly unreliable supply has on the ability of power hungry industries to do business, employ people and pay meaningful wages.

Again, in places like Port Pirie, Port Augusta, Whyalla, the Latrobe Valley and Roxby Downs, it’s the working classes who suffer first and most from Australia’s ideological obsession with wind and solar power.

On his next lap of the country, Robert would do well to tour some of those places and talk to the people whose lives and livelihoods depend upon affordable, reliable and secure power supplies. Then Robert would be able to provide us with a forecast for the misery and unnecessary suffering that’s about to be caused by Australia’s suicidal renewable energy policies.