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On Australian Energy Utilities at the Brink?

Nothing like a healthy debate.

Lets be clear; pretty much all energy is cross subsidised in one form or another be it solar, coal or anything else down under.

Social cross subsidies exist in energy, water, sewarge all sorts of things. Some parts of society pay more, others less, some receive more value others less. Solar support is drantically falling. Support for fossil fuels is rising (see my blog for the data from Treasury)

The cost of the only solar support scheme today in Australia is around 3% of the average power bill and falling, before considering value to those investors who install or the network. The cost of owning, operating and delivering a  return on the network is around 50% and rising.

Solar is not a silver bullet and can't solve every problem, but it can make a far bigger contribution than it is and there is no doubt it can be meangingful.

I 100% accept that we rely on fuel, oil and other non renewables for day to day life; I am a realist. However, I can also see that there are new, better ways to do things that can improve our efficiency. Australians have the highest per capita use of energy in the world becasue it has been too cheap for too long and we don't have a miocum of respect for what the imapct is. Im not suggesting we should go back to the dark ages, just that we could do a whole lot more with what we have and that clearly, the incumbents are (quite predictably) defending their position by introducing barriers.

Lets evolve, I say.

 

May 25, 2014    View Comment    

On Australian Energy Utilities at the Brink?

Nothing like a healthy debate.

Lets be clear; pretty much all energy is cross subsidised in one form or another be it solar, coal or anything else down under.

Social cross subsidies exist in energy, water, sewarge all sorts of things. Some parts of society pay more, others less, some receive more value others less. Solar support is drantically falling. Support for fossil fuels is rising (see my blog for the data from Treasury)

The cost of the only solar support scheme today in Australia is around 3% of the average power bill and falling, before considering value to those investors who install or the network. The cost of owning, operating and delivering a  return on the network is around 50% and rising.

Solar is not a silver bullet and can't solve every problem, but it can make a far bigger contribution than it is and there is no doubt it can be meangingful.

I 100% accept that we rely on fuel, oil and other non renewables for day to day life; I am a realist. However, I can also see that there are new, better ways to do things that can improve our efficiency. Australians have the highest per capita use of energy in the world becasue it has been too cheap for too long and we don't have a miocum of respect for what the imapct is. Im not suggesting we should go back to the dark ages, just that we could do a whole lot more with what we have and that clearly, the incumbents are (quite predictably) defending their position by introducing barriers.

Lets evolve, I say.

 

May 25, 2014    View Comment    

On How Micro-Inverters are Changing Solar Energy Business Models

Hi Maury

Yes you are right; net prices are between AUD$1/W-$2/W for up to 100kW in Australia, sometimes larger! That is after a REC rebate of around $0.60c/W.

IMHO, FAR too low for most to be doing a  great job or making enough profit to be sustainable.

 

April 29, 2014    View Comment    

On 2014 Solar Energy in Australia: Swings and Roundabouts

Hi Gary

Great feedback, thanks.

I think you are pretty right too, and I must admit I do think in the Australian market context a lot. In many markets where there is room for more efficiencies and soft cost reductions, the impacts would be softened.

However, here we have a softening exchange rate, a shift from Teir 3 to Teir 1, softening electricty prices, and a desperate need for more margins in the value chain. Coupled with China's consolidation and a need to (at a minimum) lift profits to positive;  flat prices are our best hope for a while. 

Technology will adapt and I am ever the optimist so all I see is another bump in the road before we see the next leap and it will come.

 

January 26, 2014    View Comment    

On Transformative Solar Energy Storage Policy for California

Hey Bob

The offical documentation is now out and I quote "where MW represents the peak power capacity of the storage resource in terms of the maximum discharge rate".

Hence the terminology of MW

 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M078/K912/78912194.PDF

 

Nigel

October 21, 2013    View Comment    

On Transformative Solar Energy Storage Policy for California

Bob

Thanks.  

Quite right that getting terminology accurate is appropriate.

Early days on the policy and I forgive them for a little clumsiness on their press release. Hope you'll forgive me too, for not paying sufficient attention to detail and assuming they were talking about a peak capacity not storage capacity but missing the terminology flaw.

Having said that, I think you'll agree that merely the propsoal to develop such a policy, is in fact a great stride - the debate alone is porrgess in itself like we havent seen before. Like 80% cost reductions in PV. And like massive expansions in global PV and other renewable capacity.

Whether you agree with the methods used to drive these strides or not, you have to admit they are strides nontheless.

 

Nigel

October 21, 2013    View Comment    

On Energy Truth: Solar Reduces Emissions Despite Variability

Shaulk

65% of feeder capacity, in the case in point around 650KW peak PV on a 100kw feeder line. The links I previously provided provide several examples and data of other situations where 35% peak PV capacity has been recorded also. 

October 14, 2013    View Comment    

On Energy Truth: Solar Reduces Emissions Despite Variability

OK; we are crossing our wires a bit I supect!

I'm well familiar with Off Grid distributed generation in hybrid configuration with generators and batteries. Thats were I cut my teeth 20 years ago. They work and beautifully and are highly cost effective against small generation sources.

What I was referring to ( and thought you were too) was the penetration of DG on existing electricty networks, which is a more recent phenomonom. There are several studies  at http://www.apva.org.au/ which cover the topic well in several Australain locations.

 

October 13, 2013    View Comment    

On Energy Truth: Solar Reduces Emissions Despite Variability

Gday John

You obviously know a hell of a lot about large power generation and the electricty sector so ill take your comments on board wrt to the study.

I think the salient point, as you say is " Our current power grids that are normally designed to...." Around the world Im seeing the need to move to a new normal, if we are going to take advantage of the opportunities for DG and agree, if things stay the same there will be problems.

Having said that and I know it varies, there are a groing number of examples of very high penetration rates (up to 33%) which are not causing problems. In Australia we have numerous examples with some feeders experiencing 65%+ penetration of solar - and it is working just find. There are some great studies which I can forward if you are interested. In other places, where the network is weak voltage rise can be an issue, but this is simply resloved through intelligent control systems which are standard in places like Germany and Italy.

Bring on the new normal !

October 13, 2013    View Comment    

On Solar Energy in the Bush

Rendered useless? Ever heard of batteries??

You obviously haven't seen a well designed OG System. The main system at the homestead requires diesel support around 2% of the year according to the owner to run a small industrial facility and a dozen homes.  The cabin we were in has no backup at all. None. 

Solar and wind are not perfect but offer a cost effective and silent alternative. Compared to their previous diesel fuel bill the solar system will pay for itself, including finance in 2-3 years. 

You are right. They should never have relied on a solar alternative that avoided 24hr diesel generation and pats for itself in a few years. What frivolity! 

Virtually nothing in this world is carbon free, but utilising options which dramatically reduces carbon consumption seems imminently more logical than not using them because they are imperfect, surely.

Solar is the cake. Diesel is the fog over the cake. In the case described, it actually proves it (and there are GW of other examples) and your comments simply highlight your biased view.

September 27, 2013    View Comment    

On Proof That Renewables Can Out-Compete Coal

Well, I have certainly stimulated some passionate debate and thats a good thing.

I won't bother defending myself against some of the personal critisism, thats people right to express a view on my credibility if they choose, But I will take a moment to add some centext and references.

John's point about this being an advocay peice is quite right. I am an advocate for renewables in what is often an unbalanced debate and so this peice was unabashedly designed to be an example of how renewables are emerging. However, I did clearly make the point that "there is more to complex energy trading markets than this simple story". I wholly acknowledge the complexity and other dynamics at play.

Nonetheless that statements made by RWE that solar in particular were largely responsible were their comments, not mine, quoted stratight off their press release.

Scotts point about subsidisation and the cost to the community is valid too which is why I mentioned that most forms of energy are subsidised and a links to some examples. It is worth highlighting perhaps that being Australian, I was looking through a local lense where we dont have guarenteed acess and we have very limited subsidies.

Paul's ponit on cost benefit pass throughs to customers is also a great point worthy of an entire debate on its own. Here in Australia in one State, utilities have been forced to pass through whoelsale cost reductions to consumers, although its the only State who has done so. It has resulted in reduced prices but is highly unique. Once agin, I ackowledge the complexity of the dynamics and that lower costs don't always translate and rarely inthe near term. However, the point was that RWE drew their own conclusion that of their own non renewables "its no longer competitive.” Thats not my statement, its theirs.

Kevon makes a  succint point on market intervention. Its why I made the point carefully that "sending any non renewable business broke, or in much of Australia’s case, wrecking State budgets by stripping returns from State owned assets is not “a win” for anyone". Market intervetion is however part of life and the key point I was making is given what the current situation is, are we seeing transition to new energy sources that can provide new business opportunities, that utilties and States are being too slow to embrace? Nothing stays the same forever including energy markets, so I am actually arguing that their is a chance for them to avoid such losses, although I aknowledge that is not easy.

Kim-Mikael suggests that it is mostly gas under review, but looking at the investor release here http://www.rwe.com/app/Pressecenter/Download.aspx?pmid=4009732&datei=2 it suggest that a significant amount of coal/lignite is also under review.

In summary, do we have a distorted market where energy and markets are cross subsidised in a variety of complex ways? Yes.  Are renewables (irrespective of subsidisation) increasingly competitive and forcing revolutionary changes in the energy market? Yes. Is the a huge opportunity to think about where our energy mix could and should be in the future and an impending need to utilties to adapt? Yes. Will it be comfortable? No.

Thanks 

Nigel

August 16, 2013    View Comment    

On Tesla-NY Times Dispute Reveals Different Truth

Max; your story offers some much needed clarity on this issue, and I can personally confirm the steep learning curve!

I switched to an all electric motorcycle (Zero DS) last year after decades on conventiona motocycles.

I reckon it too the better part of 6 months to really get over the range anxiety, noting however that mine is an older machine with much less range than current gen. I had several instances where my day gat screwed up because I miscalculated or fell into the trap of not anticipating the worst (ie heat, wind etc), but its was exhilerating to be opening up some new nueron paths and re-learning how to drive.

It takes a little time, but IT and EV technology are making it easier by the second. Zero released an incredible app yesterday for example, which would make my life so much easier with access to better data and the ability to manage performance characteristics form a smart phone.Wish it worked on 2010 model!

February 21, 2013    View Comment