Solar Panel Feed in Tariff

[BobL]

Interesting to see Australia's newest coal fired electrical generator plant in WA has been written off as worthless
Bluewaters coal-fired power station written off as worthless as renewables rise - ABC News

[Bushmiller]

Interesting to see Australia's newest coal fired electrical generator plant in WA has been written off as worthless
Bluewaters coal-fired power station written off as worthless as renewables rise - ABC News

Bob

That one sparked a bit of interest over this side too, but of course it is on your independent grid. Something does not quite ring "right" with that situation, but we would need to know more to comment, although I believe there is a financing issue with the banks.

Regards
Paul

[Warb]

Warb

3c/KWh, which equates to $30/MWh is how the wholesale market refers to power generation, but this figure is a little out of date. That price was typical about ten years ago or more. Wholesale price of electricity is both dynamic and volatile. It varies from state to state and season to season. Queensland is about the cheapest state and South Australia seems to be the most expensive. Winter and summer are the periods of highest demand.

The major difference between commercial generation and domestic is that domestic supply is not and cannot be asked to back off. The solar farms shut down if the spot price goes negative during the day.

I appreciate that the cost of power varies, and that coal fired power stations (as an example) are unable to react quickly to demand changes which causes prices to fluctuate - that is the nature of supply and demand. The same applies in many industries, including farming - it's hard to stop cows from producing milk in a glut, and nor can you stop feeding them! I live in a coal mining area, where the towns would/will simply cease to exist if/when the mines shut so this has a direct bearing on my life. However, the maximum prices, at least when I last investigated the figures, tend to exist only for seconds or minutes, at times of very short term peaks or (I read this several years ago, it may or may not be true!) when the networks and power stations make adjustments that cause very short term dips in supply or availability. Whilst a genuine number, those transient peaks may not have much bearing on the average price.

Above all, however, I was simply pointing out that the wholesale price of electricity is largely irrelevant to the consumer, because it comprises only a relatively small part of the bill - the poles and wires cost outweighs it hugely. It is therefore not valid to claim (as people were doing in the early days of solar) that they should get the same for their exported power as they paid for their "bought" power.

The storage of power is an interesting concept. I have not followed the story, but I was under the impression that the "Snowy 2" project was entirely based on power storage - at times of over-supply, water was to be pumped from a lower dam to a higher dam, such that it could be released to generate more power in times of short-fall. It was to be a closed-loop system, using no water (except evaporation) and giving the ability to "store" power. I believe there was also a plan to use Tesla batteries in Victoria to achieve the same thing - avoid power shortfalls by storing energy in times of over-supply.

Lastly, I'm not certain of the current ability of power companies to control domestic solar. In NSW I know that they can insist on a "fixed" export limiter, where the inverter is controlled by an export meter and artificially limits the amount of power exported by down-tuning the panels. However at one point I was told that the smart meters they were installing could, at their discretion, simply stop any power export whatsoever. This was, at the time, claimed to be to "prevent damage to the grid at times of oversupply", or some-such. Not sure if it's true!

[Bushmiller]

I appreciate that the cost of power varies, and that coal fired power stations (as an example) are unable to react quickly to demand changes which causes prices to fluctuate - that is the nature of supply and demand. The same applies in many industries, including farming - it's hard to stop cows from producing milk in a glut, and nor can you stop feeding them! I live in a coal mining area, where the towns would/will simply cease to exist if/when the mines shut so this has a direct bearing on my life. However, the maximum prices, at least when I last investigated the figures, tend to exist only for seconds or minutes, at times of very short term peaks or (I read this several years ago, it may or may not be true!) when the networks and power stations make adjustments that cause very short term dips in supply or availability. Whilst a genuine number, those transient peaks may not have much bearing on the average price.


Above all, however, I was simply pointing out that the wholesale price of electricity is largely irrelevant to the consumer, because it comprises only a relatively small part of the bill - the poles and wires cost outweighs it hugely. It is therefore not valid to claim (as people were doing in the early days of solar) that they should get the same for their exported power as they paid for their "bought" power.



The storage of power is an interesting concept. I have not followed the story, but I was under the impression that the "Snowy 2" project was entirely based on power storage - at times of over-supply, water was to be pumped from a lower dam to a higher dam, such that it could be released to generate more power in times of short-fall. It was to be a closed-loop system, using no water (except evaporation) and giving the ability to "store" power. I believe there was also a plan to use Tesla batteries in Victoria to achieve the same thing - avoid power shortfalls by storing energy in times of over-supply.



Lastly, I'm not certain of the current ability of power companies to control domestic solar. In NSW I know that they can insist on a "fixed" export limiter, where the inverter is controlled by an export meter and artificially limits the amount of power exported by down-tuning the panels. However at one point I was told that the smart meters they were installing could, at their discretion, simply stop any power export whatsoever. This was, at the time, claimed to be to "prevent damage to the grid at times of oversupply", or some-such. Not sure if it's true!

Warbs

The maximum prices vary in size. if you study the second example I gave, that five minute price spike made a huge difference to the average for the day. Averaged over the year not so big.

Regarding the feed in tariff that is exactly right. The distribution network is at least as high a proportion of the costs as generation.

I am skeptical of the Snowy 2.0 scheme. Many of the dams in the proposal do not have pumping ability and I think the capability of the scheme has been mischievously exaggerated. The Tesla battery is the largest of it's type, but is very small compared to even the size of the SA grid where it was first installed. You would need hundreds of those batteries. The SA battery provides 100MW for one hour only in what is one of the smallest systems on the Eastern Seaboard at a maximum of, say, 2000MW. The biggest advantage of the Tesla battery system is the ability to provide extremely rapid frequency control: Much better than Gas Turbines and much better than Hydro.

Regards
Paul

[Warb]

I am skeptical of the Snowy 2.0 scheme.

I've been skeptical about Snowy 2 simply because they tried to promote it as "new green power generation", which it's not - it's a lossy (meaning less than 100% efficient) method of storing power from ANY source, green or otherwise!

I have no idea of the granularity of the spot power price data. If that spike was 5 minutes, then as you say it would have made a big difference on the day, but if it was simply a "maximum" it could have lasted a second (or one single MWh sold at that price!?), and made almost no difference even on a daily basis. It is, however, interesting that it was such a massive price spike on a day when the demand figures aren't massively higher than the previous day. Do you know what caused it? The explanation I was given several years ago (as I said earlier, no idea of the accuracy!) was that such spikes lasted seconds and were caused by "switching" issues on the grid - i.e. someone somewhere changed something (deliberately or by mistake) and caused a momentary shortfall, with a "desperation" price response.

The Tesla batteries are largely a stunt, I suspect, both for Tesla and the various governments. Having said that, almost every green power or "climate change" action falls under the same heading (or is an opportunity to make someone some money) so that's nothing new!

[woodPixel]

We live in interesting times.

Big wind. Big solar. Big everything.... even 300 MW big batteries --> The batteries that could make fossil fuels obsolete - BBC Future


My poor coal shares are down.... a bit more.... than I'd like! (58%!!!)

BUT! I have a good investment in a tech called CAES - Compressed Air Energy Storage --> Liquid-air energy storage: The latest new “battery” on the UK grid | Ars Technica


It soaks up cheap power at "whatever time is cheapest" and sells it while its nice and high. Paid for the plant install within 1 year and it's 100% fat profit now I can see this rolling out hard, even into the smallest places.... the company can roll out these facilities like LEGO and a local engineering company can plug them up inside of a week. They need nothing more than a standard industrial block!

They scale indefinitely. Old caves, salt mines and oil wells are apparently useful. If not available, there is talk on underwater systems with vast air bags that just scale and scale and scale.

There are other useful side effects too. Compressing the air creates a lot of heat which is useful to industries, also cold when decompressed - again useful. There is talk that industries will spring up around these plants, just like the deep-sea beasties that pop out of nowhere on "smokers".


Back to solar in-feed tariffs for individuals.... there is a BIG future for this. Every milliwatt counts.


I'm surprised that roof space isn't leased by start-ups to use "your" solar to their profit.... soon... soon.

[Bushmiller]

I've been skeptical about Snowy 2 simply because they tried to promote it as "new green power generation", which it's not - it's a lossy (meaning less than 100% efficient) method of storing power from ANY source, green or otherwise!

I have no idea of the granularity of the spot power price data. If that spike was 5 minutes, then as you say it would have made a big difference on the day, but if it was simply a "maximum" it could have lasted a second (or one single MWh sold at that price!?), and made almost no difference even on a daily basis. It is, however, interesting that it was such a massive price spike on a day when the demand figures aren't massively higher than the previous day. Do you know what caused it? The explanation I was given several years ago (as I said earlier, no idea of the accuracy!) was that such spikes lasted seconds and were caused by "switching" issues on the grid - i.e. someone somewhere changed something (deliberately or by mistake) and caused a momentary shortfall, with a "desperation" price response.

The Tesla batteries are largely a stunt, I suspect, both for Tesla and the various governments. Having said that, almost every green power or "climate change" action falls under the same heading (or is an opportunity to make someone some money) so that's nothing new!

Warbs

The pricing is set in five minute bands, which it is why it represents such a lot of money. It is supposed to change to one minute bands but I can't recall if that is scheduled for 2021 or 2022 and it may or may not happen.

What causes a price spike? It could be many things and it is dependent on the available power at that moment. It is only partially linked to the level of demand. However periods of high demand will dictate more risk. A typical scenario would be where there was a hot day with the system stretched and then a unit or more than one unit trips. Initially the existing generators with spinning reserve will attempt to pick up the shortfall. At some point the price will rise and for a short while (that five minute period) there will be money to be made. Then the peaking power plants (gas turbines, hydro etc) will kick in and assuming they can cope with the demand the price will fall to a lower level but still high.

Equally the opposite can occur with a transmission line failing. This results in a load centre being disconnected. There is now too much power, the price falls and the generators back off towards their minimum levels. It may be that the price falls to negative numbers. Negative prices actually happen far more frequently than the elevated prices, but it is not talked about by no-nothing politicians as it is not so sexy and does not get them the attention they seek. The negative prices are more likely to be there for sustained periods of time. Recently I saw SA sit with negative prices for most of the daylight hours! It is not limited to SA either.

The challenge for the future and for renewable power systems is to find suitable means of storing energy to re-use to make electricity. If we take solar power it is effectively active for about six hours a day and that does not include cloudy days. Solar power would require four to five times the available generation to provide for the hours where solar does not function: Then that generation has to be stored. Hydro, hydrogen, salt-beds, batteries ,compressed air are all capable of storing energy and likely down the track there will be others to provide a mix: We are not close to being at that point yet.

The Tesla battery and other similar batteries are supreme at providing frequency control. Their downside is being expensive and too small. You are correct about the Tesla being a stunt, although I would probably describe it more as a PR exercise to demonstrate what is possible for the future and how quickly it could be done given the right incentives.

Regards
Paul

[Warb]

I'm surprised that roof space isn't leased by start-ups to use "your" solar to their profit.... soon... soon.

This has actually been happening for some time. My uncle investigated it a few years ago. A company would install a PV system on the roof of his building, and pay him a fixed amount to have it there. They would take all the generated power (clearly worth more than they would pay him!), manage and maintain the system. After a predefined number of years it would revert to his ownership, I assume that timeframe allowed them a healthy profit and presumably was close to the reliable, "high output" life expectancy of the panels*. That's fairly close to your concept of leasing roof-space!

*Whilst they have always made 20+year claims for panels, the real-world output normally starts to drop long before that point. Indeed the fine print of the warranty often states 80% of initial output after 20 years. Given that almost all the panels are Chinese, and the importers, distributors and installers start, fail and (conveniently) pop up again with different business names but the same phone number (hence have no responsibility for previous warranties), the warranties are largely worthless anyway.

Interesting but largely unrelated story; a solar installer in SA (from memory) did this "install cheap systems then go bust" trick some while ago. Unfortunately for me they left a webpage up with MY mobile phone number on it - after being very confused by the first two or three angry phone calls, I Googled my own mobile number and found the website in question. I have no idea if this was a misfrint or if they picked a number at random to throw people off the scent, but for months I got SA and Vic residents phoning me up demanding I fix their PV systems! Some of them got quite upset, apparently they felt it was my responsibility to fix their system even after I explained that I had nothing to do with Chris or Clint or whatever his name was.......

[AlexS]

I am skeptical of the Snowy 2.0 scheme. Many of the dams in the proposal do not have pumping ability and I think the capability of the scheme has been mischievously exaggerated.

Agree wholeheartedly. Also, bear in mind that the whole Snowy scheme was designed as an irrigation scheme - hydro power was simply a serendipitous by-product.

To run an irrigation scheme (in particular, this one) you need to get the water downstream where the irrigators are. To run a hydro-electric scheme, you need to keep the water as far upstream as possible. Someone is going to discover, very quickly and to their great discomfort, that you don't get between an irrigator and a bucket of water.

[Warb]

What causes a price spike? It could be many things and it is dependent on the available power at that moment. It is only partially linked to the level of demand. However periods of high demand will dictate more risk. A typical scenario would be where there was a hot day with the system stretched and then a unit or more than one unit trips. Initially the existing generators with spinning reserve will attempt to pick up the shortfall.

So the pricing system is automated and all customers (i.e. the energy retailers or whatever other bulk users buy wholesale) pay the same? I wondered how that worked!

The guy who told me about the wholesale pricing spikes many years ago said that the large spikes were caused by network switching issues, and whilst he didn't mention the negative prices he actually implied that the system was too easily manipulated - "when higher prices are available as a result of something tripping there must be motivation for such a trip to occur" was his underlying theory. Whilst I assume there are checks and balances to avoid this, my experience of PV (and, it must be said, most areas of business) is that it's rare to find a business that won't leverage an opportunity to make extra money, so I can understand where he was coming from even if it wasn't true (and I assume it's not!).

Energy generation, storage and (importantly but usually ignored) usage is a fascinating subject and vital to our future. Sadly it is largely undermined by the fact that every player is constantly trying to benefit themselves and secure their own future - working together for the good of society as a whole seems to be a concept that is alien to most people and businesses. My own belief is that all forms of energy generation (and storage) should be investigated and encouraged, and the grid should be maintained and upgraded to allow such a disparate system to be managed effectively. Sadly, as I stated in previous posts, I'm not sure this is happening - the gold plating of the grid seems largely to involve spending money but not necessarily improving anything, the businesses involved are all simply trying to make money whilst resisting any significant change in the market, and the politicians (as always) are interested in themselves and getting votes. The green party I find especially disappointing, seemingly having abandoned any common sense approach to "green issues" and become intent on side issues and demanding a perfect solution or nothing at all.....

And nobody is promoting "use less" because it doesn't make money!

[Warb]

Agree wholeheartedly. Also, bear in mind that the whole Snowy scheme was designed as an irrigation scheme - hydro power was simply a serendipitous by-product.

To run an irrigation scheme (in particular, this one) you need to get the water downstream where the irrigators are. To run a hydro-electric scheme, you need to keep the water as far upstream as possible. Someone is going to discover, very quickly and to their great discomfort, that you don't get between an irrigator and a bucket of water.

The concept, as I understand it, is that the water is pumped between a higher and a lower dam. The result is that there is no net usage of water, meaning it shouldn't impact the systems ability to provide irrigation water unless the levels are sufficiently low as too have no water to pump back up. It does, of course, require the construction of new dams (either high or low) to increase the net storage capacity by the amount of "energy storage water" envisaged. Once those dams are constructed, it should at worst require a short term reduction in irrigation water (or a La Nina year!) to fill the extra capacity, after which it should be business as usual.

As a farmer who does sometimes use supplementary irrigation (not from Snowy dams or rivers!) I must also say that the majority of the Australian public 100% fully understand that food comes from supermarkets and not farms, so any impacts on farmers isn't relevant anyway.....

[Bushmiller]

So the pricing system is automated and all customers (i.e. the energy retailers or whatever other bulk users buy wholesale) pay the same? I wondered how that worked!

The guy who told me about the wholesale pricing spikes many years ago said that the large spikes were caused by network switching issues, and whilst he didn't mention the negative prices he actually implied that the system was too easily manipulated - "when higher prices are available as a result of something tripping there must be motivation for such a trip to occur" was his underlying theory. Whilst I assume there are checks and balances to avoid this, my experience of PV (and, it must be said, most areas of business) is that it's rare to find a business that won't leverage an opportunity to make extra money, so I can understand where he was coming from even if it wasn't true (and I assume it's not!).

Energy generation, storage and (importantly but usually ignored) usage is a fascinating subject and vital to our future. Sadly it is largely undermined by the fact that every player is constantly trying to benefit themselves and secure their own future - working together for the good of society as a whole seems to be a concept that is alien to most people and businesses. My own belief is that all forms of energy generation (and storage) should be investigated and encouraged, and the grid should be maintained and upgraded to allow such a disparate system to be managed effectively. Sadly, as I stated in previous posts, I'm not sure this is happening - the gold plating of the grid seems largely to involve spending money but not necessarily improving anything, the businesses involved are all simply trying to make money whilst resisting any significant change in the market, and the politicians (as always) are interested in themselves and getting votes. The green party I find especially disappointing, seemingly having abandoned any common sense approach to "green issues" and become intent on side issues and demanding a perfect solution or nothing at all.....

And nobody is promoting "use less" because it doesn't make money!

Warbs

The contracts are negotiated individually and could vary, but as the retailers have the opportunity to approach the suppliers for the best deal it is reasonable to assume the contracts they negotiate will be similar. A further variation depends on which of the states they are based as the average price, as I have mentioned, is not the same for each state.

I think your "guy" may have misled you. I only gave a single example of why a price spike would occur: There are many. Switching issues would be unusual. Line constraints would be more common either because of maintenance or overloaded lines, mechanical damage from storms or even a Goanna falling across the lines (that tripped a unit at Liddell many years ago). In South America the Condor was responsibly at times as their wingspan was large enough to contact two wires, which provoked a phase to phase fault and a dead Condor.

One thing I can categorically state is that no generator trips a unit to create a shortage of supply as it would mean that to supply their contracts they may now have to buy power at the elevated prices. I will give an example. Kogan Creek power station near Chinchilla in QLD has the largest single unit in Australia (about 780MW). Lets assume they have half their capability under contract. Perhaps the price on the spot market is $75/MWh. Something goes wrong and the unit trips. The new price jumps to $1500/MWh for one time segment and then settles back to $120/MWh. They still have to supply power for their contract. Firstly they have lost 390 MWs at $75. Also they have to buy from the market to supply the contracts. They are hugely out of pocket.

Our nightmare at Millmerran is that the price goes up with a huge spike and one of our two units tripping is the cause!

You are quite right when you point to business manipulating the market. This is human nature and indeed the greed of human nature. Major utilities (electricity, gas and water) should not be in the hands of private ownership, but they are ans we have to thank the politicians and their greed for that. It is what it is and no amount of lamenting by me or anybody else will change that. Even if the politicians did have a reflective moment where they saw the error of their ways they cannot afford now to buy back: On top of that I don't believe the will is there either.

A few years ago the competitive market and the rules that governed it were a little "loose" and the generators could organise their price bands at short notice to maximise their income. At the time it was within the rules, but no longer so. From just before 1960 to the middle 90s the primary aim of electricity markets in Australia was continuity of supply. Now that continuity only comes at a price. The price spikes could be eliminated by load shedding, but there would be a public outcry. Load shedding only occurs when the equipment is at risk or the lines are down. It is a rare situation where we have load shedding.

Investigations are conducted when a significant pricing event has happened. There was one a little while ago where one generator had apparently flaunted the regulations. I actually thought they had been pinged big time, but I heard a few days ago that they are still fighting it. Interesting that as it is a government owned enterprise.If it had been us we would have gone for a row!

All forms of energy should be investigated, but I despair when some types are put forward and hailed as being the new Messiah of electricity generation when they are completely untried and looking very shaky economically. No type of electricity generation will "fly" unless it is commercially viable. That is how it is. Not only that it has to be viable for a long time, because it requires a huge investment to get started. The longevity aspect has been one of the barriers to renewables, in my opinion, because our governments won't commit and scandalously, again in my opinion, talk about new coal fired and gas fired plants. That sort of talk I believe is close to criminal. These stations have to run for fifteen to twenty years to get the investment back and would have a normal life expectancy of forty to fifty years. No private company in their right mind is going to commit to that.

Using less is an option. In fact the overall demands are down, but I don't think this is a conscious effort by the community.

Regards
Paul

[Bushmiller]

The concept, as I understand it, is that the water is pumped between a higher and a lower dam. The result is that there is no net usage of water, meaning it shouldn't impact the systems ability to provide irrigation water unless the levels are sufficiently low as too have no water to pump back up. It does, of course, require the construction of new dams (either high or low) to increase the net storage capacity by the amount of "energy storage water" envisaged. Once those dams are constructed, it should at worst require a short term reduction in irrigation water (or a La Nina year!) to fill the extra capacity, after which it should be business as usual.

As a farmer who does sometimes use supplementary irrigation (not from Snowy dams or rivers!) I must also say that the majority of the Australian public 100% fully understand that food comes from supermarkets and not farms, so any impacts on farmers isn't relevant anyway.....

Warbs

You might find this article interesting:

NSW has approved Snowy 2.0. Here are six reasons why that's a bad move (theconversation.com)

I alluded to the pumping capacity being exaggerated and I think it was this article that supported this claim. I have also seen that cost have already ballooned from less than $5 billion to more than $10 billion.

Not looking good for a variety of reasons. I know our rainfall in this region is well down. I don't know the situation in the Snowy region.

Tasmania got their DC link from mainland Australia to provide security in case they underwent a protracted dry spell, which would have spelled disaster for their hydro stations. Once they had their link the hydro companies sold power back the other way to mainland Ozdepleting their dam supplies.

Greed.

Then the DC cable broke.

Disaster: For nearly a year!

Regards
Paul

[Mobyturns]

We are the fortunate recipients of the Queensland Solar Scheme.

QSS FIT 44 c/kWh
Tariff 11 - general domestic to 30/06/2020 - 23.661 c/kWh
Tariff 11 - general domestic post 30/06/2020 - 23.661 c/kWh

Service Fee - to 30/06/2020 - 90.345 c/day
Service Fee - from 30/06/2020 - 90.666 c/day

Some may find this project interesting Project Details (genexpower.com.au)

250MW Kidston Pumped Storage Hydro Project (K2-Hydro)

Quick Facts:
Location: Far-North Queensland
Nameplate capacity: 250MW
Generation duration: 8 hours
Storage capacity: 2,000MWh
Upper reservoir: Wises Pit (52ha)
Lower reservoir: Eldridge Pit (54ha)
Project lifespan: 80 years
Number of turbines: 2
Turbine details: 125MW reversible turbines
Start-up time: <30seconds
Max gross water head: 218m

[Fuzzie]

From my point of view the feed in tariff was almost a secondary consideration in making the decision to install solar in our new house.

At current bank interest rates the financial equation of a capital investment is quite persuasive without a feedin tariff. If you have the money to buy a system rather than letting it sit in the bank getting 0.01% interest, installing solar and offsetting the electricity you would otherwise purchase is a winner straight out of the blocks as a direct investment return. Capital depreciation is offset by the bonus of feed in tariffs that shorten the payback period of the initial investment. Most systems seem to have a capital payback estimate of about 7 years with a significantly longer estimated lifetime in which your electricity use becomes essentially free irrespective of feed in tariff. If you are producing at a significant excess rate to your usage you also have the potential of a bonus small untaxed income as well as reducing the pay back period.

Is the investment return the most important thing rather than the fact you are perhaps actually reducing your carbon footprint and doing something positive to reduce accelerators of climate change?

However having made the decision to install solar it is only common sense to try and get your best financial return as well, even if some of the excess power eventually gets shed by the retailer. My old house is with Origin as the best feedin, my new house is with AGL as the best feedin. The best feedin is a moving target.