Some of Australia’s largest clean energy investors are warning power grid limitations and policy uncertainty threaten to stunt the next wave of wind and solar projects needed to replace retiring coal generators.
As federal government statistics suggest the uptake of new renewable energy capacity for 2020 is on course to match last year’s record-breaking 6.3 gigawatts, institutional investors including Macquarie Capital, John Laing, RWE Renewables and Lighthouse Infrastructure have renewed warnings about deteriorating investment conditions. According to the investors, the worsening conditions risk imperilling the pipeline of projects required in the future.
These range from issues around inadequate network infrastructure supporting new projects coming on line, and rules crimping revenue received for power generated in certain parts of the grid.
“If you have significant uncertainty around the level of revenues that you’re going to achieve for a project moving forward, that really does have an impact on your investment decisions,” the newly appointed chair of the Clean Energy Investor Group, Simon Corbell, told The Age and The Sydney Morning Herald.
“These are major handbrakes on new clean energy development.”
The Clean Energy Investor Group, representing investors holding $9 billion across 49 renewable energy assets nationwide, intends to ramp up advocacy for a redesign of the energy market to encourage the flow of lowest-cost capital and achieve goals of the energy transition at the lowest cost to consumers and taxpayers.
Federal Energy and Emissions Reduction Minister Angus Taylor said statistics from the Clean Energy Regulator, showing 837 megawatts of new large-scale renewable energy capacity had reached financial close in the first half of 2020, dispelled any “myths” that investment in Australia was falling away.
Mr Taylor said between 2 and 3 gigawatts of large-scale renewable energy projects were expected to achieve financial close across 2020 – six times the average yearly capacity prior to 2017 – signalling “confidence in the sector despite the economic challenges of COVID-19”.
“Australia is a world leader in renewable energy,” Mr Taylor said. “This dispels the myths that some continue to spread around a stall in investment.”
Coal and gas-fired generation remain the dominant sources of Australia’s energy supply, together accounting for 77 per cent. But a surge in investments has driven projections that wind, solar and hydro power could increase to as much as 30 per cent of the mix by 2021. Some projections say renewables’ share could reach nearly 30 per cent by the end of 2021, while the Australian Energy Market Operator (AEMO) says the system could safely accommodate up to 75 per cent renewable energy by 2025, provided that market conditions and regulations were modified.
If no action was taken to address existing region-specific and grid-wide technical challenges, AEMO said it would need to restrict power from wind and solar to between 50-60 per cent of overall supply at any point in time.
Mr Taylor on Thursday said the increase of renewable energy across the network brought with it “reliability challenges” due to wind and solar farms’ inability to produce power on overcast and still days compared to fossil fuels.
He said the government was seeking to address those challenges with a $1 billion “grid reliability fund”, which is considering backing several projects, including pumped hydro, gas and renewable generation to ensure stability of energy supply across the grid.
Mr Corbell said investors were urging the Morrison government to focus more of its efforts around ensuring not only the reliability of the National Electricity Market (NEM), but also a clear pathway for a higher level of integration of renewables.
“While the federal government is focusing on short-term issues around grid reliability, it has not yet chartered out a long-term plan for how to increase and manage the increase of integration of renewables to the NEM,” he said. “And that’s critically important to achieving a clean energy future and reducing Australia’s greenhouse gas emissions accordingly.”
Due to climate change, wildfires are set to become an increasing problem
Millions of acres burn every year in wildfires across the United States, with the worst seasons on record occuring in the past two years. Climate change is blamed for making these fires increasingly worse year-on-year, making things tough for power grid engineers in an increasingly volatile climate reality.
The average wildfire season today is three and a half months longer than it was as recently as the 1980s. The number of annual large fires in the US has tripled — burning six times as many acres as in wildfire seasons only decades ago.
Wildfires are occuring where they were rarely seen before
Temperature averages in Siberia were nearly 10°C above normal for the first five months of 2020. Temperatures in the Russian Arctic region and Siberia continue to break records, thawing the tundra and contributing to an increase of hundreds in wildfires, most in areas inaccessible by firefighters. Siberian wildfires today are breaking out over nearly 3 million acres (1.2m hectares). The smoke cloud is unprecedented, extending over the United States and Canada.
How power lines contribute to wildfires
There is growing evidence that power lines themselves trigger wildfires.
High winds are a key contributing factor, vegetation contact, where high winds blow trees and branches onto power lines, sparking fires. In other cases, wind can snap wooden distribution line poles, causing live wires to fall onto nearby dry grass, setting it on fire.
California is particularly at risk because of drought conditions that have turned its forests into tinderboxes from August to November, when high winds are common. The Redwood Fire burned more than 36,000 acres, destroyed hundreds of homes and businesses, and lead to nine deaths.
Introducing OTELLO – real time notifications the moment problems arise
Developed in Cape Town, South Africa, OTELLO is an innovative grid management system developed to meet Africa’s steep energy challenges. It is a solution in two parts – a device installed across the network, and a software platform that visualises the data and provides real time notifications when network performance moves out of accepted safety thresholds.
Each OTELLO device is a linux-based edge computer, which process data locally as it enters the device, while simultaneously streaming it onwards a central data store. With a built-in GPS clock that is time synchronised to within ±100ns from absolute time, the full fleet of devices work together in perfect harmony, delivering the full picture of network performance.
OTELLO records and reports on a comprehensive set of RMS, phasor, harmonic, environmental & synchrophasor data, encompassing over 9,000 parameters.
OTELLO’s data visualisation platform reports and interprets the data for the end user. Available for all smart devices, OTELLO will notify the appropriate team members at the moment anomalies occur on the network. If storm clouds suddenly begin to form over the city and solar supply drops rapidly, OTELLO will send emergency push notifications and emails in real time to the people who matter.
Beyond emergency notifications, OTELLO’s unique capabilities can also:
- Provide interaction and control down to the mini-substation level, providing engineers and operators with unprecedented visibility and remote management of the entire enterprise.
- Predict, detect and prevent wildfires caused by high voltage power-lines.
- Provide detailed information and insights through an ongoing forensic record, enabling long-term decision making and informed capital investments.
Keen to know more?
OTELLO is set to change the way the power grid is managed. If you’d like to see more of what the system is capable of, speak to us.