The government recently issued a policy statement on electricity that has a laudable primary objective of providing the reliable and economic supply of electricity that we desperately need. It then goes on to discuss a scenario that features rapid load growth that is largely met by wind and solar power.
It seems that the government’s scenario is shared by most decision makers in the electricity industry. It assumes that there will be a 50% increase in electrical energy demand driven mainly by electrification of transport and industry and that most of this increase will be met by low-cost wind and solar power. When wind and solar are in short supply, consumers and industry will reduce demand while hydropower stations, batteries associated with home solar installations and electric cars will provide extra power to the system. There will also be some support from gas peaking plant and pumped storage.
I have failed to find any evidence that this scenario is credible.
The belief that wind and solar can provide a low-cost reliable supply is not supported by the evidence which shows that the more wind and solar power on a system, the higher the power price. The cost is high because, much of the time, wind and solar generate less than 50% of their rated power. So, to provide the energy needed by a 1000 MW load, about 2500 MW of wind and solar power is needed plus 1000 MW of backup generation to supply the load when wind and solar are on holiday. Cheap it is not!
There appears to be no credible evidence supporting large scale electrification of transport. Worldwide sales of heavily subsidised electric cars are not increasing at the expected rate. Major manufacturers are losing money on their electric cars and many of them have suspended plans to expand production. For obvious reasons, people seem to be very reluctant to buy an expensive vehicle that costs more and depreciates faster than a conventional vehicle. Industrial electrification relies on having a low-cost reliable supply available into the future. Not a current possibility.
There is no evidence of widespread use of batteries associated with domestic solar and electric cars being used to support the power system during shortages. Given that domestic solar is about three times as expensive as a solar farm, batteries associated with home solar power and electric cars are likely to make only a tiny contribution to solving the problem of intermittent wind and solar power.
Increased use of existing hydropower storage has major problems because hydro storage is fully committed to managing winter peak demand and providing extra power during dry years. Existing hydro stations have numerous environmental constraints that limit their inherent flexibility. Shutting them down and reducing river flows when renewables intermittently provide surplus energy is not an option.
Gas peaking plants will be seriously constrained by the lack of gas and gas storage.
Pumped storage has some promise but, as Lake Onslow has shown, building a pumped storage scheme that has enough storage to maintain supply during a dry year is impossibly expensive and fails if dry years follow one another in quick succession.
Industry leaders seem to be unaware of many other factors that are relevant to the present situation, for instance, Transpower’s warnings about insufficient generating capacity that will result in increasing power prices and the risk of blackouts. When wind and solar power are abundant, there would be a large amount of surplus energy that would cause a price crash and seriously reduce their income. Other significant factors such as keeping the lights on during several days of not much wind or dry years are ignored. Emissions-free, safe and reliable nuclear power, which is cheaper than wind and solar when the cost of backup is included, is also ignored!
Most of the senior people in the industry seem to believe that generators will continue to build wind and solar farms sufficient to meet the expected load growth. They ignore the fact that, the more wind and solar we have on the system, the more often there will be an energy surplus and, when wind and solar power are in short supply, there will be very high prices. Both will seriously damage the economics of new wind and solar farms and it is difficult to see why any rational organisation would want to continue building them.
The reality is that we will be exposed to an increasing risk of shortages and high prices for the next few years. The risk will then diminish only if the government takes dramatic measures to change the way the industry functions. I believe that this must include abandoning the failed market structure and replacing it with one that is suited to the electricity industry.
Regarding the electricity market, the Electricity Authority seems to believe that, with a few tweaks, it will continue to work well. It was supposed to provide a reliable and economic supply and, instead it has delivered shortages and increasing prices and left us in a situation where it will be very difficult to avoid severe shortages and high prices for the next few years.
What can be done? It seems to me that as a result of the recent shortages associated with low lake levels, the government has lost confidence in the scenario described at the beginning of this article. A few weeks ago it issued terms of reference for a wide-ranging report on all aspects of the electricity market and is now looking to convene a small group of experienced power system engineers who are not wedded to the idea that wind and solar are cheap and the market is working well. The group needs to assess what can be done to mitigate the risk of shortages and blackouts in the short-term and then devise a new industry structure that will guarantee us a reliable and economic supply into the future.
We must all hope they succeed.
I have failed to find any evidence that this scenario is credible.
The belief that wind and solar can provide a low-cost reliable supply is not supported by the evidence which shows that the more wind and solar power on a system, the higher the power price. The cost is high because, much of the time, wind and solar generate less than 50% of their rated power. So, to provide the energy needed by a 1000 MW load, about 2500 MW of wind and solar power is needed plus 1000 MW of backup generation to supply the load when wind and solar are on holiday. Cheap it is not!
There appears to be no credible evidence supporting large scale electrification of transport. Worldwide sales of heavily subsidised electric cars are not increasing at the expected rate. Major manufacturers are losing money on their electric cars and many of them have suspended plans to expand production. For obvious reasons, people seem to be very reluctant to buy an expensive vehicle that costs more and depreciates faster than a conventional vehicle. Industrial electrification relies on having a low-cost reliable supply available into the future. Not a current possibility.
There is no evidence of widespread use of batteries associated with domestic solar and electric cars being used to support the power system during shortages. Given that domestic solar is about three times as expensive as a solar farm, batteries associated with home solar power and electric cars are likely to make only a tiny contribution to solving the problem of intermittent wind and solar power.
Increased use of existing hydropower storage has major problems because hydro storage is fully committed to managing winter peak demand and providing extra power during dry years. Existing hydro stations have numerous environmental constraints that limit their inherent flexibility. Shutting them down and reducing river flows when renewables intermittently provide surplus energy is not an option.
Gas peaking plants will be seriously constrained by the lack of gas and gas storage.
Pumped storage has some promise but, as Lake Onslow has shown, building a pumped storage scheme that has enough storage to maintain supply during a dry year is impossibly expensive and fails if dry years follow one another in quick succession.
Industry leaders seem to be unaware of many other factors that are relevant to the present situation, for instance, Transpower’s warnings about insufficient generating capacity that will result in increasing power prices and the risk of blackouts. When wind and solar power are abundant, there would be a large amount of surplus energy that would cause a price crash and seriously reduce their income. Other significant factors such as keeping the lights on during several days of not much wind or dry years are ignored. Emissions-free, safe and reliable nuclear power, which is cheaper than wind and solar when the cost of backup is included, is also ignored!
Most of the senior people in the industry seem to believe that generators will continue to build wind and solar farms sufficient to meet the expected load growth. They ignore the fact that, the more wind and solar we have on the system, the more often there will be an energy surplus and, when wind and solar power are in short supply, there will be very high prices. Both will seriously damage the economics of new wind and solar farms and it is difficult to see why any rational organisation would want to continue building them.
The reality is that we will be exposed to an increasing risk of shortages and high prices for the next few years. The risk will then diminish only if the government takes dramatic measures to change the way the industry functions. I believe that this must include abandoning the failed market structure and replacing it with one that is suited to the electricity industry.
Regarding the electricity market, the Electricity Authority seems to believe that, with a few tweaks, it will continue to work well. It was supposed to provide a reliable and economic supply and, instead it has delivered shortages and increasing prices and left us in a situation where it will be very difficult to avoid severe shortages and high prices for the next few years.
What can be done? It seems to me that as a result of the recent shortages associated with low lake levels, the government has lost confidence in the scenario described at the beginning of this article. A few weeks ago it issued terms of reference for a wide-ranging report on all aspects of the electricity market and is now looking to convene a small group of experienced power system engineers who are not wedded to the idea that wind and solar are cheap and the market is working well. The group needs to assess what can be done to mitigate the risk of shortages and blackouts in the short-term and then devise a new industry structure that will guarantee us a reliable and economic supply into the future.
We must all hope they succeed.
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a power systems engineer with worldwide experience. He has been a climate sceptic for the last 25 years. This article was first published HERE
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