Future of the Australian Electricity Market

[FenceFurniture]

Right now, at 10am, the renewables in the system here are at 70%, and the price per kWh is 9c supposedly dropping to 6c in a moment...hang on...ok, 5c. Not negative though.

[Warb]

So if/when we reach the point where commercial solar generation on an average day can produce sufficient power to "run the world", should we not simply discourage the construction of additional commercial solar facilities, and encourage alternatives like wind that are not dependent on sunshine? And should we not do that directly, rather than through an indirect method such as pricing that punishes all producers rather than simply the targets?

Note that obviously we still have a storage issue that has to be addressed, but over-production of solar to the detriment of renewable investment as a whole is surely counterproductive? I don't think that rooftop solar, whether domestic or commercial (factory or shopping mall roof space) should ever be actively discouraged, because local generation and usage is always a good thing, but perhaps commercial RGC's (the commercial version of RECs, IIRC) should be rebalanced on an ongoing basis to drive the industry in a suitable direction? Or maybe this happens already?

[FenceFurniture]

I would have thought that by then we would just be adding on whatever generation is required of whatever highly developed type is currently used, and that "renewables investments" as such would be an historical artefact. That is, this period from say 2015 until maybe 2040 or so will be seen as The Great Energy Transformation Period. Everyone can then relax, and go back to business as usual for energy....and worry about the next crisis (water security? housing security? staggering numbers of refugees? prevalence of far-right nutjobs? invasions by another country?).

[Warb]

But if we're getting to negative prices, surely we are close to sufficient solar right now? I realise there are other factors at play, slow startup coal generators etc., but on the face of it, prioritising storage and non-solar renewables would seem more sensible even now. Solar is quick and cheap (relatively) to install, and domestic roof-top solar will continue to grow as long as retail prices are high. So why not encourage commercial generators to do something else? If we create a negative pricing issue we'll surely discourage investment in ALL renewables?

[FenceFurniture]

Again, I'll defer to the pros, but it seems to me that there will be far less commercial generation, even for solar, once we get storage sorted out and that will mean that -ve prices would be a thing of the past. I think (or at least hope) a big part of the future will be community batteries because there will always be landlords that won't put up solar panels (unless they are forced to) and there will always be roofs that can't have them (asbestos, shaded etc), and there will always be apartment blocks that don't have enough roof area to service the many floors below them.

When that is all largely in place we will be left with solving the industrial power conundrum. I don't know what proportion of power they use (compared to the type power consumption that can be provided by solar. Maybe by then (20 years?) there will be some sort of advancement in small or smaller scale Green H20 generation, perhaps where an industrial hub or town can have their own localised big sparks production.

I can see a lot of +ve disruptive tech will probably emerge. There's an incredible amount of stuff being developed in all areas of energy.

[GraemeCook]

Had some minor day surgery last week, and as I was in the recovery room I read some of the hospital magazines. One included an article on unintentional effects of pricing policy re renewables. Because of the anaesthetic, my memory is not 100%.

First, I will prefix my comments by stating that my local electricity retailer, Aurora, only offers a single feed-in tariff for solar panels - currently 8.883 cents per kWh. It does not matter if the wholesale price is negative or spiking, the retail feed-in tariff is the same.

The article said that this encouraged people to maximise the total output of their solar systems rather than optimising the output when it was most required - in the breakfast and dinner peak periods - when wholesale prices were highest. Peak solar production was commonly in early afternoon when wholesale prices were low or negative.

Current rhetoric is that ideally solar panels should face due north or slightly east of north in most localities - this does maximise the average output in a 24 hour period. However, demand varies in the course of a day. It suggested that, theoretically, panels could be re-orientated so that half faced east and half faced west. This would reduce the daily output by 15-25%, depending on latitude, but it would optimise output early and late in the day when demand was higher. But current feed-in tariffs discouraged this.

It suggested that feed-in tariffs should, somehow, be linked to wholesale spot prices. In most cases this would require upgrading of meters.

[FenceFurniture]

Aurora, only offers a single feed-in tariff for solar panels - currently 8.883 cents per kWh. It does not matter if the wholesale price is negative or spiking, the retail feed-in tariff is the same.

It suggested that feed-in tariffs should, somehow, be linked to wholesale spot prices. In most cases this would require upgrading of meters.

This is high-lighting how antiquated the whole system is – you could say it's not FIT for purpose.

Maximising the attitude of panels for feeding as much as possible back to the grid is a ridiculous notion brimming with short-term thinking. A few years ago the FITs were much higher than now. Changing the attitude of the panels to get the most out of them for the house in question won't be all that cheap an operation, but having panels facing E, N & W is where it's at. Actually, probably facing NE, N, NW would be the most appropriate for ¾ of the year.

[havabeer69]

another day,
another new battery tech

I guess techincally this ones old (70's), but a company wants to mass churn it out
NASA Battery Tech to Deliver for the Grid - IEEE Spectrum

[Bushmiller]

another day,
another new battery tech

I guess techincally this ones old (70's), but a company wants to mass churn it out
NASA Battery Tech to Deliver for the Grid - IEEE Spectrum

haveabeer

Interesting, but not yet tested on a large scale in the real world (only in outer space ). In a way it is a bit like the SMRs, around which there is much hype as if they already exist: Except they have not been produced yet in the commercial world. Also, on the H2 batteries, I did not see much indication of cost. Cost, as we know, is something that just cannot be ignored.

I certainly subscribe to the argument that Lithium-ion battery storage by itself will be insufficient. It will serve as a stop gap until something else takes over.

Regards
Paul

[Warb]

The article said that this encouraged people to maximise the total output of their solar systems rather than optimising the output when it was most required - in the breakfast and dinner peak periods - when wholesale prices were highest. Peak solar production was commonly in early afternoon when wholesale prices were low or negative.

Current rhetoric is that ideally solar panels should face due north or slightly east of north in most localities - this does maximise the average output in a 24 hour period. However, demand varies in the course of a day. It suggested that, theoretically, panels could be re-orientated so that half faced east and half faced west. This would reduce the daily output by 15-25%, depending on latitude, but it would optimise output early and late in the day when demand was higher. But current feed-in tariffs discouraged this.

It suggested that feed-in tariffs should, somehow, be linked to wholesale spot prices. In most cases this would require upgrading of meters.

I sometimes find myself wondering who writes these articles, and where their allegiances lie. The power industry, obviously, would much rather keep the supply of power entirely under their own control (and therefore profit) and are usually very negative about roof-top PV, as exemplified by their bid a while back to punish roof-top solar owners with an additional daily fee (supply charge). This, they said, was to recover the costs of running the grid from people who didn't pay the "poles and wires" part of each kWh they self-consumed.

The "maximum daily generation" alignment of panels is no longer relevant, and that advice is very outdated. At present the FiT is very low, 6c to 8c, compared to the (in NSW) 60c rate when much of the "maximise daily production" advice was relevant. These days most PV installers suggest E and W facing for morning and evening production.

The reality, of course, is that for most people the alignment will very simply be "which way the roof faces". Also, of course, since the 60c FiT days the price of PV has reduced (though seems now to be creeping up again) so the approach is often to install as much as possible (or can be afforded) wherever the roof points!

The other issue is that the power industry is pushing up prices at an alarming rate - my last increase was approaching 50%. At that point, the FiT is almost irrelevant - people are installing PV to avoid the bills, so linking the FiT to the spot price is largely pointless. The industry is in an interesting situation, like all businesses it is trying to increase profits, but by increasing prices it is actively encouraging people to install PV which in turn reduces the market for power. This is not just domestic usage, many businesses with available roof space are doing the same thing. As storage technology becomes cheaper, if the power companies keep increasing their prices I am sure more and more people will end up with sufficient PV+storage to leave the grid completely. The power companies need to realise this and adjust their thinking to suit. Perhaps their approach to profit should be driven by efficiency and customer service, rather than bloat, poor service and price hikes!

It is also the case that the future is quite unpredictable. For example, PV produces most power at solar noon, when traditionally "everyone is at work". But since Covid we have encouraged people to work from home (this may now be changing, but for the sake of argument let's run with it!), so now a great many people who would previously have been at work will now be at home perhaps 3 days a week. There's a fair chance that this translates to a huge rise is home air conditioning usage during the day. So large chunks of that overproduction of solar power could well be soaked up. Prior to Covid, just 3 years ago, that "working from home" boom wouldn't have entered into the equation! The same changes apply to EV's - we can encourage the installation of car park charging systems such that when EV's become the norm they can soak up the excess PV during the day rather than being charged at home overnight. We can modify our world and lifestyles to make the best use of available resources, but that requires thought and cooperation!

[GraemeCook]

I sometimes find myself wondering who writes these articles, and where their allegiances lie.

I vaguely remember source as UNSW but .... (Anaesthetic) and I was in a medical facility so magazine was probably 10 years old!

... The "maximum daily generation" alignment of panels is no longer relevant, and that advice is very outdated. At present the FiT is very low, 6c to 8c, compared to the (in NSW) 60c rate when much of the "maximise daily production" advice was relevant. These days most PV installers suggest E and W facing for morning and evening production. ...

Not down here. CSIRO still suggest due North as starting point. Rannnnng three installers and one said NNE and two said 020 degrees - essentailly the same thing. One mentioned the easterly offset was due to afternoon shading from Mt Wellington. None mentioned east-west alignment.

... The reality, of course, is that for most people the alignment will very simply be "which way the roof faces".

True; this seems dominant except where it is modified by planning rules. I live in a heritage listed suburb and we are barred from installing solar panels on street facing roofs - side and rear roofs are fine. NBN connection boxes cannot be on front of buildings either.

... At that point, the FiT is almost irrelevant - people are installing PV to avoid the bills, so linking the FiT to the spot price is largely pointless.

Again, not down here. The big user of domestic energy is heating - 70% of houses have heat pumps - and houses need heated when the sun isn't shining. Mid-winter, it gets dark at 5 pm.

And the daily peak demand periods for electricity are morning and evening, not mid afternoon when solar production is at its peak.

... It is also the case that the future is quite unpredictable. ...

Like horse racing!

I see the basic problem as an instability in the supply - sun and wind are not fully predictable - coal stations cannot be ramped up quickly - batteries are not yet cost effective (in most circumstances) - and solar does not work at night.

We need some lunar panels.

[Warb]

I see the basic problem as an instability in the supply - sun and wind are not fully predictable - coal stations cannot be ramped up quickly - batteries are not yet cost effective (in most circumstances) - and solar does not work at night.

Entirely correct, although changing rapidly. I started the process of installing more panels on my new house, and wanted to include a battery. I went through the process of working out whether a battery was a sensible investment or a nice-to-have, and decided it was simply a luxury. However, that changed significantly with our last energy price hike. I haven't done the math in detail, nor included such things as the return on investment had I bought shares instead of a battery, but on the basis of our current pricing I suspect the payback time for my 25kW PV system including 20kWh of batteries is now below 15 years. Prior to the price hikes (nearly 50%!) I had guesstimated it as >25years, and 15 years is potentially within the lifetime of the battery. A few more price hikes and it might look like I knew what I was doing!

Apart from the FiT being trivial in comparison to the retail price of power, the other reason why I commented on it being largely irrelevant is because of export limiting. I realise this doesn't apply across the board, but for those affected there is zero point in aligning panels for maximum daily production, when for most of the day the panels will be restricted by the export limit. Under those conditions, even for maximum daily export (rather than unachieved potential production) the east/west split is better.

[Warb]

Then you should research the NSW Govt ESS scheme for replacing old HWS with Heat Pumps for free - have to pay some installation costs, and not sure how that will work in your area. Here in Katoomba my total outlay for a 215 litre HP installed will be around $160.

Edit:
The information below is not correct, though it is stated as being the case on several supplier websites. The real information is a few posts further down the thread.

I've spent some time looking at this, and it's not a "free" replacement, it's a set $ discount. For replacing an electric heater I'm told it's a $1200 rebate (or $350 to replace a gas heater). This is added to the STC's and any other schemes that apply. The result is that you can indeed have an electric storage system replaced with a heat pump for next to nothing (I've seen $33 quoted), but only if you don't care what brand of heat pump you get! The heat pump systems involved in the $33 deal carry a RRP (according to the supplier/installer of around $3200. The Sanden system is waayy more than that! The end result is that a Sanden system, even after the ESS and STC's, will cost you a bit above $5.5k. However, that's still $1200 cheaper than the dealer down the street who isn't approved for the ESS, so thanks!

[FenceFurniture]

I've spent some time looking at this, and it's not a "free" replacement, it's a set $ discount. For replacing an electric heater I'm told it's a $1200 rebate (or $350 to replace a gas heater). This is added to the STC's and any other schemes that apply. The result is that you can indeed have an electric storage system replaced with a heat pump for next to nothing (I've seen $33 quoted), but only if you don't care what brand of heat pump you get! The heat pump systems involved in the $33 deal carry a RRP (according to the supplier/installer of around $3200. The Sanden system is waayy more than that! The end result is that a Sanden system, even after the ESS and STC's, will cost you a bit above $5.5k. However, that's still $1200 cheaper than the dealer down the street who isn't approved for the ESS, so thanks!

I'm just waiting on a quote from a local(ish) installer on a Sanden unit.

But something doesn't appear to be right with those figures. If the $3200 unit (presumably an EcoGenica 215 litre) is $33, then how come the Sanden is only $1200 cheaper and not $3167 cheaper? I'm aware that the STC rebate on the Sanden 250 litre is the same as the 350 litre, and that's because the heat pump is the same.

We have gas central heating here which is hell expensive in winter ($600 for the coldest 3 months), and I would love to replace that, but I haven't seen any info on replacing heaters, only air conditioners. This page lists what can be replaced but I can find no further mention of replacing windows and doors, and draught proofing.

[Warb]

But something doesn't appear to be right with those figures. If the $3200 unit (presumably an EcoGenica 215 litre) is $33, then how come the Sanden is only $1200 cheaper and not $3167 cheaper? I'm aware that the STC rebate on the Sanden 250 litre is the same as the 350 litre, and that's because the heat pump is the same.

I'm actually still trying to work it out! I have one quote that includes $924 of ESC's and $864 of STC's, to give a price of $5590 for a 250L unit.

I have a second quote, which isn't broken down into items, for a 315L tank, including a WiFi module, wall mount and additional cost for installing the compressor remotely (AKA drilling three holes through the wall!), for $5679.

I assume the 315L tank costs more than the 250L version (but no idea how much), the WiFi module costs $300, I'd assume the "remote mounting" fee would be $150 (because isn't that the standard "money for nothing" price?) and the wall bracket probably another $100 or so. So the second quote is discounted from the first, but not, I suspect, by $1200.

Edit:
I think the discount is indeed a combination of the STC's (federal) and the ESC's (NSW state), therefore I suspect that the $924 of ESC's and the $864 of STC's are the total rebate available. It may be that some water heaters qualify for slightly more or less, based on their output. I now suspect that the references I have found to a $1200 rebate are simply marketing or math or both, but do not actually represent a rebate in addition to the STC's and ESC's. I can only suspect that the calculation that results in an "RRP" $3200 water heater costing only $33 to install is more likely based on the "RRP" being entirely hypothetical, and in fact it's just a cheap unit! It has also, more than likely, been designed to maximise the rebates in order to be a cheaper option for the customer whilst still being profitable. There is also the possibility, and I've seen this many times with other products, that all of the websites offering these $33 installs are in fact owned by a single entity operating under many names!

The main problem here is that as you (I think) said right at the beginning, the government websites explaining this are entirely useless. They have a great many words that glorify their actions, and explain why they are doing this, but don't actually clearly state WHAT they are doing!

My overall conclusion is that if I want the Sanden unit, it's going to cost me $$$!

Edit:
The NSW scheme does indeed provide "ESC's", based on the technology being replaced, and also the location (metro, rural etc.). The value of the ESC's, just like the STC's, can change. The fixed $1200 does not exist, it is an incorrect statement by a few (same company but different names?) installers, who are either ill-informed, deliberately misguiding customers, or (benefit of the doubt) have simply calculated the rebate for their particular offering, then rounded it to an easy number and then quoted it as "the rebate from NSW".

The outcome, I believe, is that the $33 system is inherently just a far cheaper system than the Sanden. It gets the same/similar $ discount (based on like for like sizing, location etc.), but has a much (much) lower price tag before any discount is applied.