Future of the Australian Electricity Market

[GraemeCook]

without directly addressing your last point, I say "piffle" to your three main summary points.
and as a consequence, who really who cares about whether hydrogen is "another political diversion" ...

And I say "piffle" to your comments!

Are you really suggesting:

• Hydrogen is cheap to produce,
• It is cheap to ship,
• It can be transported safely,
• It is cheap to store, and
• It is safe to store?

Your comment about "hydrogen embrittlement" seems consistent with my argument.

[ian]

something else I wanted to comment on ...

If the Australian electricity market is to convert to a mix of renewables and storage, rechargeable batteries won't cut it.
To guarantee the lights stay on -- something I suggest is a must -- Australia needs to be able to store grid scale power for around 72 hours.

At a rough estimate Australia currently uses 200 terawatt hours per annum. Allowing for the increase in usage driven by population growth and the increase in usage required to fully decarbonise the economy by 2050 -- I've seen estimates suggesting a three fold increase in electricity demand -- the demand for storage comes to about 5000 gigawatt hours. A Giga is 10^9, most power generators are rated in Megawatts 10^6, or the "number of homes" they can power.


Paul,
If I recall correctly, the power station you work at is rated at 500 MW.
So, if I have the proportions right your station would need to run flat out for 10^4 hours -- say 14 months -- just to charge the storage battery.

[ian]

And I say "piffle" to your comments!

Are you really suggesting:

• Hydrogen is cheap to produce,
• It is cheap to ship,
• It can be transported safely,
• It is cheap to store, and
• It is safe to store?

Your comment about "hydrogen embrittlement" seems consistent with my argument.

Graeme

perhaps I should have included an appropriate emoji somewhere in my screed.

but back to your points

• hydrogen is cheap to produce -- as long as you use electrolysis and "free" day-time solar power
• hydrogen is cheap to ship -- as long as you build specialised ships (Toyota, or is it the Japanese govt, have a trial ship in use today)
• hydrogen can be transported safely -- as long as you know about hydrogen embrittlement (I strongly doubt if the words "hydrogen embrittlement" have ever been mentioned in the hearing of any Australian politician), and apart from this forum who else who, doesn't work in a related metallurgical field has heard of the term?
• hydrogen is cheap to store -- well "cheap" is really a relative term. Do you mean "cheap" in the context of the alternative of heating the entire planet by an average of 3 degrees and relocating most seaside communities? Or do you mean cheap in the context of the price of petrol before the Covid pandemic and Russia invaded Ukraine?
• hydrogen is safe to store -- as long as you follow the required safety protocols. Hydrogen burns with a colourless flame so to detect a hydrogen fire you need to place a combustible material, like a straw broom, in the flame.

So yes, for me the issue of hydrogen embrittlement is the killer MUST SOLVE issue.


When I was writing my screed, I was thinking about the local (to me) Alberta politicians who are currently touting the conversion of Alberta's gas infrastructure into a nation-wide hydrogen gas distribution network, and thinking to myself


Hydrogen is so light and hard to contain that using an existing gas pipeline seems to me to be pure madness.


so, my apologies if my sarcasm was not immediately apparent.

[Bushmiller]

Paul
I have a slightly different interpretation of most of what you say.

With the influx of renewables onto the Australian electricity market, the price of renewable (solar and wind) electricity has fallen to near zero -- during the main sunlight hours -- which in turn is making coal based electricity generation uneconomic. Your power station has to burn coal at near full capacity for around 10 hours per day, and loses a boat load of money while doing so, and then in the morning and afternoon peaks, those gas burning "bastards" -- aka peaking generators -- jump in and run their gas turbines for a couple of hours per month stealing what little profit you might otherwise make.

So coal is rapidly exiting the market place -- what you expect in a privatised competitive market -- and being replaced by gas fired stations.

But there's a war between Ukraine and Russia -- oops my mistake, Russian has a "special military operation" underway in Ukraine.

The "war" has driven up the oil price -- it's now north of USD $100 a barrel.
The spot market for gas is based on the spot market for oil -- but gas is priced in Giga Joules (energy delivered), while oil is priced in terms of volume (barrels).
It is the spot gas market that is important as no gas powered electricity generator is going to enter into a long term gas supply contract -- aka take or pay -- if they only need the gas supplied for a couple of hours per month. So the gas required will be purchased on the spot market.
The current spot gas price is about 2.5 times what it was 12 months ago. (USD $2.996 vs USD $7.244)


So straight off there is part of your answer.

The war in Ukraine has driven oil prices northwards and they have dragged the spot gas price with them.

ian

I have to say nothing is completely simple.

You are correct with your statement that electricity prices have fallen dramatically during the "sunny" hours and indeed at times they go to zero dollars or even a negative price,, but it is not consistent and neither do power stations have to generate at their maximum load all the time. Most stations can ramp down to a minimum amount of generation during periods of low pricing and develop strategies to combat these low prices. The last ditch effort is to wear the below economic price as that is still cheaper than coming offline and having the added cost of a restart. Certainly in time the price will be so poor that stations will have to close but we are not there yet and until satisfactory means of storing electricity are developed the coal stations will be there for a long time yet.

The stations that are about to close, such as Liddell, are old, at the end of their useful life, too expensive to repair and would have been due to close anyway.

Although daytime prices are low, for the moment, the night time market is buoyant as the 2022 Q1 is showing.

I have not worked at a gas powered station, but my impression is that they do have contracts, although I can't say for how long they are. My reason for saying this is during the SA power crisis a couple of years back, there was huge criticism levelled at the Pelican Point gas turbine station, probably unfairly I might add. At the time of the excursion one unit had been mothballed and that was the first impediment to starting up in a hurry. The second impediment for a longer term startup was that they "had no contract" to supply gas to that unit. This leads me to believe that they did indeed have a contract for the other unit and gas was not purchased on a spot market. In fact if they were buying on the spot market I don't see how they could bid. Bidding now is done on a five minute time frame! You absolutely need to know your ongoing costs and fuel is big.

Gas turbines are in the normal course of events are only used during peaks, which are during the "sunless" hours and generally system demand can be covered by the coal fired units. There is a slightly unusual situation at the moment with a number of units offline for maintenance and of course the Callide unit 4 is, and will be, offline for quite some time yet so that is placing pressure on the market. It is a graphic demonstration of what might happen if coal fired units were retired prematurely.

I should probably mention that there are two levels of gas turbine plant: Those that have an HRSG tacked onto the exhaust utilising low pressure steam and those that don't, which are consequently once though and quite inefficient.

Regards
Paul

[Bushmiller]

Nothing is completely insurmountable, but some things are just too difficult or too uneconomic.

Many power stations have been making their own hydrogen, which is used for the cooling medium in the generators, for years. It is done by electrolysis and of course power stations have a cheap source of power to hand. The hydrogen is compressed and stored in large torpedo tubes at about 16mPa. At Millmerran we don't make our own hydrogen and buy it from a commercial supplier. So it is delivered by truck. I don't see the problem here. On our plant the pipework from the storage torpedoes to the individual units is stainless steel.

About half the hydrogen produced in the world is produced by a dirty process (steam reforming either natural gas or methane) and not electrolysis. That is not good for the environment. Hydrogen has to be made by electrolysis and the power source needs to be renewables.

Hydrogen needs development to make it easily available, but a few years ago so did EVs. While they are not yet ubiquitous we are in reach.

Regards
Paul

[ian]

You are correct with your statement that electricity prices have fallen dramatically during the "sunny" hours and indeed at times they go to zero dollars or even a negative price,, but it is not consistent and neither do power stations have to generate at their maximum load all the time. Most stations can ramp down to a minimum amount of generation during periods of low pricing and develop strategies to combat these low prices. The last ditch effort is to wear the below economic price as that is still cheaper than coming offline and having the added cost of a restart. Certainly in time the price will be so poor that stations will have to close but we are not there yet and until satisfactory means of storing electricity are developed the coal stations will be there for a long time yet.

The stations that are about to close, such as Liddell, are old, at the end of their useful life, too expensive to repair and would have been due to close anyway.

Although daytime prices are low, for the moment, the night time market is buoyant as the 2022 Q1 is showing.

Paul
I wasn't meaning to imply that coal power stations were on their way out.

all coal fired stations will have a minimum fuel quantity that has to be burned to keep the steam temperature and pressure high enough so that the power station can come back online almost instantaneously -- the spinning reserve (?) -- or at a predicable future time as solar power output declines.
.
.

I have not worked at a gas powered station, but my impression is that they do have contracts, although I can't say for how long they are. My reason for saying this is during the SA power crisis a couple of years back, there was huge criticism levelled at the Pelican Point gas turbine station, probably unfairly I might add. At the time of the excursion one unit had been mothballed and that was the first impediment to starting up in a hurry. The second impediment for a longer term startup was that they "had no contract" to supply gas to that unit. This leads me to believe that they did indeed have a contract for the other unit and gas was not purchased on a spot market. In fact if they were buying on the spot market I don't see how they could bid. Bidding now is done on a five minute time frame! You absolutely need to know your ongoing costs and fuel is big.

I would have said that for a gas fired plant, fuel costs are huge -- something like >95% of the operating cost.

But your other point is about Pelican Point having "no gas supply contract".
Gas supply contracts take several forms -- the supply infrastructure and the gas (energy) itself.
Pelican Point couldn't suddenly purchase the vast quantity of gas required unless the gas supply line to the plant is already pressurised.
So to me "no gas supply contract" strongly implies that, with one (out of two (?) units) mothballed, the Pelican Point owner had determined that the cost of keeping the plant's gas supply line fully pressurised between March and December 2016 was too costly at a time when it was expected that the plant may only need to be available to run for the few peak load hours over January and February 2017. The gas supply line wouldn't be drained, but the pumps that kept the supply line pressurised would be turned off. Remember that keeping the supply line pressurised costs Pelican Point money.

Also, at the time of the excursion -- late September 2016 -- the management expectation at Pelican Point would have been that the gas turbine wouldn't need to be available to supply electricity till late December that year, if at all over that summer. So "no gas supply contract" could mean what it says -- there was no contract in place in September because it was anticipated that the plant would not need to be available for switching on (gas supply line pressurised and gas supply contract (based either on the future spot market or a take-or-pay basis) for at least 3 months.

[ian]

Many power stations have been making their own hydrogen, which is used for the cooling medium in the generators, for years. It is done by electrolysis and of course power stations have a cheap source of power to hand. The hydrogen is compressed and stored in large torpedo tubes at about 16mPa. At Millmerran we don't make our own hydrogen and buy it from a commercial supplier. So it is delivered by truck. I don't see the problem here. On our plant the pipework from the storage torpedoes to the individual units is stainless steel.

Paul
I don't pretend to be a metallurgist, but on the basis that the Millmerran hydrogen pipework is all stainless steel, the idea (in Alberta) that the existing non-stainless steel natural gas network can be used to distribute compressed hydrogen across the country is ludicrous.

[FenceFurniture]

Toyota must have done research into hydrogen embrittlement. They are releasing a Prius and a Corolla in 2023 and both are H powered. The components of the engine and onboard storage that are steel (and exposed to H) would reveal the answer.

[Bushmiller]

something else I wanted to comment on ...

If the Australian electricity market is to convert to a mix of renewables and storage, rechargeable batteries won't cut it.
To guarantee the lights stay on -- something I suggest is a must -- Australia needs to be able to store grid scale power for around 72 hours.

At a rough estimate Australia currently uses 200 terawatt hours per annum. Allowing for the increase in usage driven by population growth and the increase in usage required to fully decarbonise the economy by 2050 -- I've seen estimates suggesting a three fold increase in electricity demand -- the demand for storage comes to about 5000 gigawatt hours. A Giga is 10^9, most power generators are rated in Megawatts 10^6, or the "number of homes" they can power.


Paul,
If I recall correctly, the power station you work at is rated at 500 MW.
So, if I have the proportions right your station would need to run flat out for 10^4 hours -- say 14 months -- just to charge the storage battery.

Ian

I missed this post before.

I have previously stated that for the Aussie grid to become fully renewable, the daytime capability needs to be closer to four times the current demand: That is is to store energy, be that batteries, pumped hydro, hydrogen production or any other form of energy storage that may be developed. Add cloudy days (could be up to a week) and the required capacity has probably risen to five times the current generation. Add the electrification of all the transport that is currently powered by other fuels and you may be talking six or seven times current demand. Actually with other forms of fuel throttled back presumably the industrial refining processes would be diminished so some electricity would be offset. However, I think the principle is clear: Down the track we will require much more electricity than is currently the case.

I am not clear on your comments regarding charging batteries from fossil fuelled stations as that would be counterproductive.

Millmerran has 2 x 435MW units. Power stations consume about 5% of their rated output to run their own auxiliaries (fans, pumps etc). So in our case we can send around 825MW "over the fence" into the grid. That of course is under ideal conditions. There are many factors that may limit the output, but normally our aim is to generate as much power as possible while ever the economic viability is there.

Regards
Paul

[FenceFurniture]

Add cloudy days (could be up to a week)

AHEM! Spoken like a true Queenslander! Can I just point out that down here, due to La Niña, between ~November and March there were probably 10 sunny days, and around maybe 15 days without rain. All the rest of the time it was persisting down wi' rain and the cloud cover was pretty dense. Electricity generation via Solar would have been considerably down I should think. Apparently this is the way of the future – smoke clouds or rain clouds.

Sometimes it stopped raining at night.

[Bushmiller]

Paul
I don't pretend to be a metallurgist, but on the basis that the Millmerran hydrogen pipework is all stainless steel, the idea (in Alberta) that the existing non-stainless steel natural gas network can be used to distribute compressed hydrogen across the country is ludicrous.

Ian

Neither am I a metallurgist. At the very least I would have to research the issue. Most articles refer to hydrogen embrittlement caused during the manufacturing process of the steel resulting in material failure down the track as opposed to a reaction with hydrogen being "piped" through the lines.

The torpedoes we use to store hydrogen, and are the transportation vessels (eight to a semi trailer), don't appear to be stainless, but I would have to check that when I am next at work. I am now in the transition phase to retirement and job share with a colleague so I am not back at work until 11 May.

Regards
Paul

[Bushmiller]

AHEM! Spoken like a true Queenslander! Can I just point out that down here, due to La Niña, between ~November and March there were probably 10 sunny days, and around maybe 15 days without rain. All the rest of the time it was persisting down wi' rain and the cloud cover was pretty dense. Electricity generation via Solar would have been considerably down I should think. Apparently this is the way of the future – smoke clouds or rain clouds.

Sometimes it stopped raining at night.

Brett

I nearly made a reference to the "Sunshine State" not being typical. However, you have identified a solar flaw!

Regards
Paul

[Chris Parks]

Toyota must have done research into hydrogen embrittlement. They are releasing a Prius and a Corolla in 2023 and both are H powered. The components of the engine and onboard storage that are steel (and exposed to H) would reveal the answer.

There have been several Hydrogen powered vehicles released to the market and the notable manufacturers are BMW, Honda & Toyota. The latter have provided several vehicles to the Federal for use in the ACT and Honda have pulled their latest attempt from the market in the US in recent times. It is a bit like VHS & Beta, someone is going to lose and my money is on Hydrogen not being practical for transport purposes at this point in time. For static industrial use where distribution is not so much of an issue I feel the jury is still out and my crystal ball is all scratched so I can't see into the future.

[Chris Parks]

I am now in the transition phase to retirement and job share with a colleague so I am not back at work until 11 May.

Regards
Paul

Practising for retirement is really hard work but someone has to do it.

[FenceFurniture]

my crystal ball is all scratched

All of my balls are scratched too. Regularly.


I was going to say earlier that you probably have some kind of handle on how cloudy the last 5-6 months have been (although you fared a little better with cloud coverage than up here). What do your stats say about solar electricity generation?