Tackling Australia's Power Price Hike Through Green Investment

Australian electricity prices more than doubled in the past decade, leaving energy consumers of all sizes to demand cheaper alternatives from their providers. For utilities, the pressure is on to deliver low-cost solutions, and for Alinta Energy, it means investing in renewables and storage.

“The focus for us is really on our customers and the energy challenges they are facing,” says Gary Bryant, General Manager, Asset Strategy at Alinta. Last year, the company purchased a 30 MW battery from Kokam to improve reliability and mitigate peak grid prices for mining customers in the Pilbara region. Since then, many other renewable projects have been green-lit.

Gary Bryant, General Manager, Asset Strategy, Alinta Energy

Energy and Mines spoke to Bryant to understand the drivers behind Alinta’s renewable strategy, what targets the company has set itself, and why investing in green energy in Australia is not always an easy task.

Energy and Mines: What are the top energy challenges that Alinta’s operations are facing?

Gary Bryant: Our retail consumers tell us that the number one issue for them is affordability and we work across our business to try to find ways to make energy more affordable. There is also an increasing focus on green power.

For our large commercial and industrial customers, of course affordability is also key, but they need to know that they have a reliable supply.

Reliability was one factor behind our Newman Battery Storage Project. In 2018 we switched on what was the largest Australian battery to be developed for an industrial application at our Newman Power Station in the Pilbara – which provides energy to large mining operations.

For the iron ore industry, generating hundreds of thousands, if not millions of dollars’ worth of output an hour, a reliable energy supply is crucial. This battery helps us better handle peak demand periods and also improve our efficiency and lower our greenhouse gas emissions.

E&M: Can you give us an update on Alinta’s renewable energy and storage portfolio?

GB: We have a 2020 target for 1,000MW of owned and contracted renewable energy and we’re well on our way to delivering that target.

Earlier this year we announced plans to build West Australia’s biggest wind farm by mid- 2020. The 214 MW Yandin Wind Farm will comprise 51 Vestas 4.2 MW wind turbine generators – with a capacity factor around 50%, this facility could provide power for up to 200,000 homes a year. The wind farm will be located near the town of Dandaragan, around 175km north of Perth.

It’s a high-quality wind resource and the project is expected to cost approximately $400 million and will generate around 150 jobs during construction.

There’s also our 35 MW Battery Storage Project and we have off-take agreements for several renewables projects including the Badgingarra Wind Farm in WA (130 MW).

E&M: What opportunities do you see emerging in Australia, for your industry and others, as a result of the current shift towards clean energy?

GB: As a business we try to do things a little differently. Our storage project in the Pilbara is an example of this because we wanted to develop a battery that was fit for purpose. We focused on ‘grid-forming’ capability – which hadn’t been done before. The fast dispatch means we don’t need to run an additional gasfired turbine for spinning reserve. This helps reduce emissions and will have applications in the energy industry beyond our power station.

We’ve also invested in a geothermal business as we see a growing appetite for geothermal heating and cooling in Australia. While this technology has already been embraced internationally, the acquisition and launch of the Alinta Energy Geothermal business represented the biggest commercial backing of geothermal heating and cooling in Australia.

In terms of renewable generation, Yandin will drive more affordable and cleaner energy for us, and with our gas-fired power stations it will also help us use gas more efficiently. We are actively developing other renewable sites around Australia. That’ll be good for us, our customers and the environment.

E&M: What are the main challenges you face in integrating renewables into your business model?

GB: We’re focused on selecting low-cost, high-quality renewables projects that can complement our generation portfolio. Given affordability is the key issue for our customers, low-cost renewables projects like the Yandin Wind Farm make sense.

The stable policy environment in WA also made a difference in making an investment decision on Yandin. Policy stability (or instability) will continue to be a key determinant for renewables investment.

E&M: What makes Australia different from other markets in terms of renewable integration?

GB: The biggest challenge in Australia has been policy uncertainty and differences between East and West government policy – which has caused investment uncertainty for over a decade.

Our business can support and work towards whatever the Australian community decides is an appropriate target for renewable energy. The most important thing is that this is done in an environment with stable policy, so longterm investment decisions can be made and we can deliver at the least cost solutions to customers and taxpayers.