Energy November 2018 Digital Edition by Monkey Media

ISSUE 4 · November 2018 · www.energymagazine.com.au

ANGUS TAYLOR EXCLUSIVE “THE ANSWER IS BALANCE”

ENHANCING solar integration in the grid

Rebuilding consumer confidence in energy

Managing the transition to

ELECTRIC VEHICLES

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ISSUE 4NOVEMBER 2018 WELCOME

ISSUE 4 · November 2018 · www.energymagazine.com.au

ANGUS TAYLOR EXCLUSIVE “THE ANSWER IS BALANCE”

ENHANCING solar integration in the grid

Rebuilding consumer confidence in energy

Managing the transition to

ELECTRIC VEHICLES

Cover image highlights our feature on electric vehicles, and the impact they will have on our energy networks.

5,867 1 October 2017 - 31 March 2018

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Monkey Media Enterprises ABN: 36 426 734 954 PO Box 1763 Preston South VIC 3072 P: (03) 9988 4950 F: (03) 8456 6720 monkeymedia.com.au info@monkeymedia.com.au energymagazine.com.au info@energymagazine.com.au ISSN: 2209-0541

Editor Laura Harvey Assistant Editor Elisa Iannunzio Journalists Lauren Butler Claire Gaynor Senior Designer Alejandro Molano Designer Aileen Ng Business Development Manager Rima Munafo Marketing Assistants Helena Brace Melissa Charalambous Publisher Chris Bland Operations Manager Kirsty Hutton Digital Marketing Manager Sam Penny

EDITOR’S WELCOME

nergy efficiency – it’s a topic that has so much potential to contribute to reducing carbon emissions, and reducing energy prices, but it’s an area that can sometimes be overlooked for more glamorous and innovative technologies. I’ve often been puzzled by the fact that more users aren’t as proactive as they could be when it comes to reducing energy usage – there is a clear financial incentive to do so. For this issue, we had the chance to speak with US-based energy efficiency expert Matt Golden, who believes that the reason energy efficiency hasn’t taken off is because the wrong price signal has been attached to it. Mr Golden’s business, Open Energy Efficiency, allows users and energy companies to turn energy efficiency into grid resources by helping to put a saleable price on units of energy saved. It’s a new, and exciting, way of looking at energy efficiency, and it’s more than just a novel concept – utilities, regulators, aggregators, and evaluators in California are all using the technology developed by Mr Golden’s company to monetise the efficiency gains they’ve been able

to achieve. I encourage you to read our interview with Mr Golden on page 15. Also this month I had the chance to interview our new Federal Energy Minister, Angus Taylor. After taking up the energy portfolio in August, Mr Taylor has spent a couple of months bunkered down, taking a crash course in energy politics and the Federal Government’s policies as we hurtle towards an election next year. We had a lively conversation; and while there were differences of opinion on where the industry has gone wrong in recent years, what we could agree on was that the path forward will require a balanced approach. As the Minister said, “The notion that we can pick one fuel source and it will solve all of our problems is ludicrous. The answer here is balance.” I’m sure we can all agree with this sentiment – the trickier question, of course, is how we actually balance the mix of technologies, resources and ideas we have at our disposal. But as always, I have faith in the people working in our industry, and I look forward to watching the path forward unfold. Laura Harvey Editor

We’re keen to hear your thoughts and feedback on this issue of Energy. Get in touch at info@energymagazine.com.au or feel free to give us a call on (03) 9988 4950.

November 2018 ISSUE 4

CONTENTS NEWS 6

Australian-first hydrogen-powered electricity generation trial

NSW councils come together for solar PPA

New gas exploration in Queensland

EACH ISSUE

Australia’s largest microgrid project planned for LaTrobe Valley

EDITOR'S WELCOME

CONTRIBUTORS

Sodium-ion battery trial at Sydney pumping station

FEATURES SCHEDULE

ADVERTISERS’ INDEX

Ultra-rapid charging stations on major Australian routes

12 INTERVIEW

RENEWABLES

10 Angus Taylor: balancing urgent change in an evolving industry

22 Energy accelerated: Australia can lead the energy future if it embraces action now

ENERGY EFFICIENCY 12 Taking control of energy efficiency 15 Efficiency and demand flexibility: the newest energy sources on the block 18 Taking the pressure off: the role of utilities in demand response

November 2018 ISSUE 4

26 Speed, power and mobility key to solar success 28 Driving down costs at Australian solar farms

32 GRID INTEGRATION AND STABILISATION 32 Innovative technology to enable more solar exports 36 Northern Territory transforms remote power delivery 38 Joining the dots to help more customers join the solar evolution

30 Synchronous condensers support Australia’s clean energy transformation

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CONTENTS

INSIDE POWER PLANTS

ELECTRIC VEHICLES

EQUIPMENT

40 Planning for a new energy future

42 Welcome to the volt age: managing the transition to electric transport

52 The Aussie invention transforming worksite safety

45 Electric vehicles in Australia â&#x20AC;&#x201C; charging up the utilities industry 48 Getting the EV rollout right

60 CUSTOMER FOCUS 60 The consumer data right: what does it mean for the energy sector? 64 It starts with culture: rebuilding confidence in the energy market 66 Will The Energy Charter help regain consumer trust?

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MOBILITY 54 The mobile battery 58 What a consumer-grade mobility strategy really costs

68 BIOFUELS 68 Australia's forgotten fuel source 71 The renewable baseload alternative to diesel generators 72 Cementing a sustainable energy future 75 Clean, baseload power project underway for Western Australia

November 2018 ISSUE 4

CONTRIBUTORS

Andrew Perry

Executive – NextGen, EnergyAustralia

Andrew Perry is responsible for EnergyAustralia’s innovation agenda, solar and battery installation, the demand response program and the company’s extensive program of partnering with startup businesses, both in Australia and internationally. Andrew joined EnergyAustralia as Executive Manager Retail Finance in August 2013. From March 2015 Mr Perry was Chief Financial Officer, helping guide the business in the early stages of its transformation to a world-class retailer, until taking up his current role in NextGen from July 2016.

Luke Menzel

Chief Executive Oﬃcer, Energy Eﬃciency Council

Luke Menzel is the CEO of the Energy Efficiency Council, the peak body for Australia's energy efficiency industry. Luke provides strategic leadership for the Council, guiding the Council’s initiatives to build the market for energy efficiency, energy management and demand response in Australia. Before being appointed CEO, Luke led the development of a new Australian certification scheme for the professionals that manage comprehensive energy upgrades of commercial buildings. The Energy Efficiency Certification Scheme launched in 2013.

Rosemary Sinclair AM

Chief Executive Oﬃcer, Energy Consumers Australia

Rosemary Sinclair is the CEO of Energy Consumers Australia, a company established by the Council of Australian Governments Energy Council of Ministers in 2015 to strengthen independent consumer advocacy on national energy market matters of strategic importance and material consequence for energy consumers, in particular household and small business consumers. Energy Consumers Australia focuses on the long-term interests of consumers of energy with respect to the price, quality, safety, reliability and security of supply of energy services. Ms Sinclair is a Director of CPA Australia and a recent past Member (part-time) of the Australian Communications and Media Authority. Ms Sinclair has many years of senior large-scale operations, communications and strategy experience in business and government across telecommunications, media and education. Ms Sinclair has held a number of Directorships on unlisted company and not-for-profit Boards, both in Australia and internationally.

David Johnson

General Manager Development and Construction, AGL

David Johnson is currently the General Manager of Development and Construction at AGL Energy, overseeing the construction of wind farms Coopers Gap in Queensland (453MW), Silverton in New South Wales (200MW), and gas peaking power stations at Barker Inlet in South Australia (200MW) and Newcastle (220MW). AGL is actively developing more wind farms, utility-scale solar, gas peaking power plants and energy storage projects across the national electricity market, to replace the generation from the Liddell Power Station when it retires in 2022. Mr Johnson is a Mechanical Engineer with additional qualifications in business and science, he is a member of the Australian Institute of Company Directors and a Fellow member of Engineers Australia. Prior to AGL he held operations management and project development/delivery roles at Rio Tinto, BHP Billiton, Santos, Transfield and Origin Energy, and he has 26 years’ experience in the power generation, utilities, upstream gas and resources industries.

November 2018 ISSUE 4

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CONTRIBUTORS

Bernadette Cullinane

Australian Oil, Gas and LNG Leader, Deloitte

Bernadette Cullinane has more than 26 years of experience across the oil and gas value chain, and all stages of the capital project to operations lifecycle. She has worked with companies in the upstream, downstream, midstream, LNG and trading segments, as well as in conventional and unconventional oil and gas. Since moving to Australia in 2007, Ms Cullinane has focused on supporting Australian and international companies to be globally competitive. Day to day, she helps companies reduce cost, improve business performance and grow.

Shahana McKenzie

Chief Executive Oﬃcer, Bioenergy Australia

Shahana McKenzie joined Bioenergy Australia in August 2017. Ms McKenzie has a strong track record of driving public, government and consumer campaigns for the non profit sector over the last 15 years. She is committed to driving growth in the bioenergy sector and advocating for bioenergy as a key renewable energy solution for the future. Since joining Bioenergy Australia, Ms McKenzie has led the renewal of the organisation and successfully delivered a merger with the Biofuels Association of Australia, resulting in a joining of forces to drive industry growth for the sector. Ms McKenzie has the responsibility for leading Bioenergy Australia’s contribution on matters such as climate science, jobs creation, regional development and energy supply to ensure national benefits for the next decade and beyond. An immediate priority for Bioenergy Australia is to ensure bioenergy features prominently in considerations at all levels of government as they plan and implement energy strategies and policies.

Oliver Williams

Policy Adviser, Australian Energy Council

Oliver Williams joined the Australian Energy Council (AEC) as a Policy Adviser in 2017 and is involved in supporting the AEC’s work with retail members in developing policy positions. Oliver has a particular interest in how technology and law reform can drive better competition in the energy market.

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November 2018 ISSUE 4

NEWS

AUSTRALIANFIRST HYDROGENPOWERED

ELECTRICITY GENERATION TRIAL

n a $15 million trial, Jemena will use international technology to convert solar and wind power into hydrogen gas, which will then be stored for use across the Jemena Gas Network in New South Wales. ARENA has committed $7.5 million in funding for Jemena to build a demonstration-scale 500kW electrolyser at its facility in western Sydney which is able to generate enough hydrogen to power approximately 250 homes. The two-year trial — the largest of its kind in Australia — involves converting solar and wind power into renewable hydrogen via electrolysis; the process by which electricity is used to split water into hydrogen and oxygen. The electrolyser will produce hydrogen to be stored in the natural gas network to demonstrate and address the technical, regulatory, environmental and economic barriers to the production and use of hydrogen in various Australian conditions. The majority of the hydrogen produced will be injected in the local gas network for domestic use and demonstrate the potential for renewable hydrogen storage in Australia’s gas networks. A portion of the hydrogen will be utilised via a gas engine generator for electricity generation back into the grid, with the remaining stored for use in an on-site Hydrogen Refuelling Station for hydrogen fuel cell vehicles.

ARENA CEO, Darren Miller, said “As Australia transitions to renewable energy, hydrogen could play an important role as energy storage, and also has the effect of decarbonising the gas network with ‘green’ gas.” Energy Networks Australia identified hydrogen injection into the natural gas network as an avenue to decarbonise gas distribution networks. Jemena’s trial will support future activities around the production and storage of renewable hydrogen at larger scales. “There is significant potential in the power-to-gas value chain including the ability to stabilise the grid as well as pairing renewable energy with electrolysers to soak up and store surplus electricity,” Mr Miller said. Jemena’s Managing Director, Frank Tudor, said, “Jemena’s Project H2GO will demonstrate how existing gas pipeline technology can store excess renewable energy for weeks and months, making it more efficient than batteries which can only store excess renewable energy for minutes or hours,” Mr Tudor said. “Our trial will also explore how hydrogen can be used to power Australians who are on the move, with a hydrogen refuelling station being developed to support the burgeoning hydrogen vehicle industry.” Mr Tudor said Jemena’s Project H2GO lays the foundations for a renewable energy grid which would take advantage of Australia’s abundant renewable resources.

NSW COUNCILS COME TOGETHER FOR

rigin will supply solar power to 20 local Sydney councils from the 56MW Moree Solar Farm in northern NSW in a new renewable energy agreement that will meet up to 35 per cent of their demand. In a group Power Purchase Agreement (PPA) led by the Southern Sydney Regional Organisation of Councils (SSROC), Origin will also firm the solar with power from other sources such as peaking gas-fired power stations, making sure the councils have reliable supply when the sun goes down. From 1 July 2019, Origin will provide the 20 participating councils with around 39,000MWh of renewable energy a year from Moree Solar Farm until the end of 2030. The balance of their electricity needs will be supplied as regular grid electricity to 2022. The 20 participating councils are Bayside, Campbelltown, Canada Bay, Canterbury-Bankstown, Georges River, Hunters Hill, Inner West, Ku-Ring Gai, Lane Cove, Liverpool, Mosman, North Sydney, Parramatta, Randwick, Ryde, Singleton, Sutherland Shire, Waverley, Willoughby and Woollahra.

November 2018 ISSUE 4

SOLAR PPA Origin executive general manager energy supply and operations, Greg Jarvis, said, “A growing number of customers are actively choosing renewable energy and we can bundle wind or solar together with firm generation that gives them certainty over supply and costs. “SSROC wanted cost-effective renewable energy and we have structured an agreement that gives these councils solar power from Moree Solar Farm during the day and firm generation at other times to cover demand around the clock.” The SSROC PPA follows similar agreements for firmed renewable supply, which Origin brokered with the University of NSW and Sydney Airport. SSROC President and Mayor of Burwood Council, Councillor John Faker, said, “This is a huge achievement by local government. Councils will save money, lower their risk and reduce their carbon emissions. It will also give a much-needed boost to the renewable energy industry in NSW.”

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NEWS

NEW GAS EXPLORATION

IN QUEENSLAND

our gas companies have won tenders to start exploring more than 6000 square kilometres in the Surat, Bowen, Eromanga and Adavale basins. Natural Resources, Mines and Energy Minister, Dr Anthony Lynham, said the latest blocks were in key gas-producing regions in the Surat and Bowen basins, as well as an area with significant potential in the Eromanga and Adavale basins. The four companies have won tenders as part of Queensland’s annual exploration program. “Ultimately, these land releases will deliver more petajoules into pipes, bringing more gas to the east coast and more gas for export,” Dr Lynham said. One company will be looking for gas only for the Australian market. Chi Oil and Gas will explore 5266 square kilometres of land near Quilpie in the Eromanga and Adavale basins. They join a growing team seeking or producing Queensland gas for the east coast market. Senex is progressing its Project Atlas in the Surat Basin, and Central Petroleum, along with Armour Energy, have authorities to explore almost 400 square kilometres for the Australian market. The other three successful tenderers will be able to supply any gas they find to either the Australian or export market. Armour Energy will explore two areas south of Surat over the Surat and Bowen basins: a 12 square kilometre area 28km south east of town, and a 30 square kilometre area 35km south of town.

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Cypress Petroleum will explore two areas near Tara over the Surat and Bowen basins: a 487 square kilometre area 30km west of town, and a 559 square kilometre area 38km south west of town. Bridgeport Energy will explore a 298 square kilometre area 18km west of Tara, spanning the Surat and Bowen basins. The companies will need to negotiate land access agreements, fulfil environmental and native title requirements, and be granted exploration authorities before exploration can begin. APPEA Chief Executive, Dr Malcolm Roberts, used the release of the new acreage to draw comparisons between the Queensland and New South Wales and Victorian state governments. “New South Wales and Victoria are crying out for cheaper gas while they are locking up local resources. This approach is needlessly pushing up prices for customers,” Dr Roberts said. “The Australian Competition and Consumer Commission (ACCC) estimates that transport costs can add up to 25 per cent to gas prices. “APPEA congratulates the four companies – Armour, Bridgeport Energy, Cypress Petroleum and Chi Oil and Gas – for securing the opportunities to explore for new gas reserves in Queensland.”

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November 2018 ISSUE 4

NEWS

AUSTRALIA’S LARGEST MICROGRID PROJECT PLANNED FOR LATROBE VALLEY

new $15 million Victorian microgrid project will enable small to large businesses in the Latrobe Valley to cut their electricity bills by up to $10,000 per year. The project, which includes Victorian Government funding of $3 million, will see leading solar solutions company Ovida install, own and operate rooftop solar panels, battery storage systems and smart interconnected technology. The program will see 7.5MW of solar photovoltaics and 1.5MW of battery storage installed at 75 microgrids across the Latrobe Valley. The technology will be installed free of charge, with customers opting-in and continuing to have choice over their electricity retailer. Minister for Energy, Environment and Climate Change, Lily D’Ambrosio, said the microgrid program will ensure the Latrobe Valley is at the centre of the shift to renewable energy and lower emissions. The project has the potential to make the Latrobe Valley a National Centre of Excellence for microgrid technology.

The development of new energy skills and technology in the Latrobe Valley has also been given a boost with three grants from the State Government’s Latrobe Valley New Energy Jobs Fund: » Federation Training will receive $8000 to support local businesses by halving the cost of their solar PV installers course for participants » EnviroMicroBio will receive $50,000 for new laboratory and analytical equipment to support local businesses wishing to explore anaerobic digestion for energy production and waste management » Latrobe Valley Engineering Services and Sundermann Water Power will receive $48,400 for development of the Sundermann Water Turbine

commercial benefits, social prosperity and be a catalyst for future innovation in the region,” said Mr Reardon. Approximately 7.5MW of solar generation and 1.5MWhs of storage will be installed with smart distribution technology provided by Allume’s Solshare system. The project will generate new data for analysis and sharing with government, industry and communities to address other barriers to solar, such as regulatory and governance issues.

Ovida spokesperson Shaun Reardon said the project will open up new opportunities for regional businesses. “This microgrid technology will considerably drive down operating costs, making businesses more cost effective, enabling them to reinvest and employ more staff. By building a strong and robust local energy system, it will bring

SODIUMION BATTERY TRIAL AT SYDNEY PUMPING STATION

$10.6 million renewable energy generation system at Sydney Water’s Bondi pumping station will soon be storing renewable energy through the use of sodium-ion batteries. The ARENA-funded trial will feature 6kW of solar panels, an energy management system and a temporary lithium-ion battery pack. Sydney Water will use lithium-ion batteries for 12 months to test the energy management system before transitioning to sodium-ion batteries as the first batches of batteries are received from industry partners in China. The project has been led by energy storage researchers from the University of Wollongong (UOW) Institute for Superconducting and Electronic Materials (ISEM) in collaboration with Sydney Water and battery storage manufacturers in China.

November 2018 ISSUE 4

The Bondi pumping station was chosen due to the daily volume of wastewater it moves as well as proving the technology against highly intermittent and impulseheavy loads. The system will generate approximately 8000kWh of energy each year – more than the Bondi pumping station requires to power its own needs. This pilot could be scaled up, as Sydney Water has a network of more than 780 sewage pumping stations. ARENA CEO, Darren Miller, said, “Part of ARENA’s role is to deliver secure and reliable electricity, and battery technology will play a major role in allowing variable renewable energy to be dispatchable. “Thanks to the contribution of worldleading researchers from the University of Wollongong, these relatively inexpensive and reliable sodium-ion batteries aren’t too far off, potentially reducing our reliance on lithium. ISEM Director Professor, Shi Xue Dou, said the project was translating research

outcomes into tangible impacts for society. “Sodium-ion batteries are a potential gamechanger because the materials are much more abundant than those for traditional lithium-ion batteries, reducing the cost of the raw materials as well as reducing reliance on scarce, expensive lithium. “Critically, this project will deliver commercial-scale and ready-formanufacture sodium-ion battery technology that allows lower-cost distributed renewable energy supply to become a reality,” Professor Dou said. The smart sodium storage solution project will be instrumental in developing the entire supply chain including the product design, development and manufacturing process. The approach of piggybacking on established lithium-ion manufacturing and production processes is also a clever way of not only overcoming the difficulties of such a new technology but the approach will assist in bringing forward sodium-ions demonstration and wider use for storage in Australia and the world.

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NEWS

ULTRAď&#x161;şRAPID CHARGING STATIONS

ON MAJOR AUSTRALIAN ROUTES

RENA is providing $6 million to help Chargefox develop 21 ultra-rapid charging stations powered by renewable energy for electric vehicles along the major driving routes from Brisbane to Adelaide, including around Sydney and Melbourne, and separately in Western Australia. The $15 million network is expected to have no more than 200km between stations, which is within the range of current electric vehicles. The ultra-rapid charge will provide a range of up to 400km in just 15 minutes, compared to a current charging time of several hours. The stations will be open to the public and all electric vehicle models currently sold in Australia. Euroa in Victoria and Barnawartha North, outside Albury Wodonga on the New South Wales-Victorian border, will be the first sites for the charging stations. The network will help open up interstate travel and regional communities to the potential of electric vehicles. Electric vehicles have the potential to lower transport costs, enhance fuel security and increasingly create more sustainable cities with less pollution and better health outcomes for our communities.

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November 2018 ISSUE 4

INTERVIEW

ANGUS TAYLOR:

BALANCING URGENT CHANGE

IN AN EVOLVING INDUSTRY National energy policy has been front of mind for the Federal Government for many months now, and its importance on the national agenda was underscored in August when it resulted in a new Prime Minister and new Energy Minister. Since assuming the portfolio, Angus Taylor has been focused on developing a plan that will allow the government to reduce power prices, keep the lights on and win over frustrated voters. Energy Editor Laura Harvey had the chance to catch up with Mr Taylor to discuss his thoughts on where the industry has gone wrong, and the things we need to do improve performance, adapt to our changing environment and win back the trust of consumers.

et’s start with what we do know about our new Energy Minister. He’s been given a clear mandate to reduce power prices – in his first days in the role, he was described by Prime Minister Scott Morrison as the “Minister for Reducing Energy Prices”. Since assuming the role in August, Mr Taylor has frequently and repeatedly referred back to this mandate when speaking about the energy industry, and his role in it. But there’s a lot more to energy than just prices, and our new minister is going to have to do a lot more than wave the proverbial “big stick” at the industry to win customers over; and he’s certainly going to need to bring more than that to the table to earn the respect of the industry itself. So what else is he planning to bring to the Federal Election next year? From our conversation, it’s clear that for Mr Taylor, reliability is equally important as prices. “Number one is getting prices down while we keep the lights on,” said Mr Taylor. “I do want to underscore that, because there will be no compromise there. “But reliability is obviously crucial also. We have a 250 per cent increase in solar and wind in the National Electricity Market coming in the next three years, so for that reason, we are determined to get the Retailer Reliability Obligation in place.” True to this statement, the Retailer Reliability Obligation – one of the few remnants from the now defunct National Energy Guarantee – was front and centre

November 2018 ISSUE 4

of discussions at the most recent COAG Energy Council Meeting. All states agreed to move forward with this plan, and the Energy Security Board will now prepare a final draft Bill for the council to consider at its next meeting in December 2018, to be implemented by 1 July 2019. Naturally, from here it makes sense that the government will also be focused on shoring up supply for domestic energy markets. Mr Taylor has been quoted as saying he will be focused on “fair-dinkum, affordable and reliable generation”. It would be easy to interpret this statement as meaning coal or other fossil fuels – so what does the Minister have to say about these assumptions? “When it comes to dispatchable generation, there are a lot of different fuel sources that can play a role. There’s coal, there’s gas, there’s hydro,” said Mr Taylor. “Let’s be clear: all dispatchable generation will play a role. The notion that we can pick one fuel source and it will solve all of our problems is ludicrous. The answer here is balance. And the craziness in the energy sector has all come from people who want a lack of that. I’m into balance, and getting the balance right will get us through what is a challenging time in the energy sector.” When pressed on how that balance would actually be determined, the Minister was very quick to say: “The right balance will be the one that gives us lower prices and reliability. That is what customers want.”

Where has energy gone wrong? Some of the conversation between the Federal Government and energy utilities has been pretty hostile in recent weeks and months. What is particularly interesting about our new Energy Minister is that in his life before politics, he spent considerable time working in the energy industry, both on the service and customer sides. Given his previous experience in the sector, it’s important to gain an insight into his interpretation of where the energy sector has gone so wrong. “I would say that if there’s a disappointment for me, it’s that there’s been less of a focus on customers than there needs to be,” said Mr Taylor. “I think refocusing on what customers want, whether that’s a residential customer or an aluminium smelter, focusing on what customers need and what’s going to make them successful has to be the focus now. “There hasn’t been enough talk about price. Those who want energy to be a very profitable industry don’t want to talk about price, because there is a risk to profitability. “I want the energy companies to be sustainable, but they also have to offer a service, and a price level for that service, that is sustainable for their customers. And currently, that is not the case. “If there’s one lesson we can pick up from business in recent years, it’s focus on your customers, or you will perish. That is a really important lesson, and it’s one that the industry and I need to focus on every day.” Turning the focus back to customers naturally brings the conversation back to www.energymagazine.com.au

INTERVIEW

prices in the energy sector. When asked point blank what sort of changes the Federal Government wants to see from the energy industry moving forward, the answer is swift, and simple. “A sharp focus on lower prices while we keep the lights on. Full stop. It’s that simple. “If the industry does that, then I am absolutely confident that the relationship between the government and the energy companies will be a good one.”

The role of clean energy With all this having been said, it leaves just one elephant in the room still to be discussed: where does clean energy, and more specifically an increased emissions target, fit in with the Government’s plans for the energy industry? “Let’s look at the numbers,” said Mr Taylor. “We have an international commitment to emissions reductions, and the reason we can focus on price is because the emissions reductions through our investments in solar will be very significant, and we’re confident they will reach the 26 per cent reduction – the 2030 target – well ahead of time. “The crucial thing for us is to drive prices down and keep the lights on, knowing those emissions reductions will occur.” Mr Taylor believes that this approach is in line with one of his general business principles, to manage the pace at which

change is introduced. “The one thing I’ve learned in business is pace. There is a natural pace of doing things that all of the different stakeholders can cope with.” Mr Taylor is adamant that the Opposition’s target of a 45 per cent reduction in emissions is too much – he believes many stakeholders won’t cope with that. “But 26 per cent is achievable. And let’s not understate this – there is $15 billion of renewables investment lined up for the next three years in order to help meet our target. “This is a big change, and a big challenge, and it will take an enormous amount of work to digest this. “We will reach our emissions target, but no, we don’t accept that it should be higher.”

The road ahead There were a number of key points that stood out from our conversation, beyond the obvious emphasis on price and reliability. Pace, balance and sustainability were all words that came up repeatedly and with emphasis. The Minister wants a balanced, sustainable approach to how we address the challenges the industry is currently facing as a result of the energy trilemma; and he wants the challenges tackled at a

Angus Taylor.

sensible pace. The problem with that sentiment is that the industry is dealing with fundamental changes to the way it operates, with innovations being delivered with breakneck speed. On top of this, we are faced with customers (and in the case of a Minister, an electorate) who want change (in the form of action on prices) immediately. How exactly will we balance the urgent change that is required in an industry that is evolving every day before our eyes? How we answer this question, and how we marry these two opposing forces is a critical focus for the industry moving forward. For the Minister, it’s most likely what he will be judged against in merely a matter of months.

Angus Taylor leading the COAG Energy Meeting in October.

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November 2018 ISSUE 4

ENERGY EFFICIENCY

November 2018 ISSUE 4

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ENERGY EFFICIENCY

TAKING CONTROL OF

ENERGY EFFICIENCY Outside the energy industry, there’s often confusion about the best approach to take when it comes to managing energy use. Recognising this, the Energy Efficiency Council (EEC) has developed a guide for businesses navigating the sometimes tricky waters of energy efficiency and optimisation. We caught up with EEC Chief Executive Officer Luke Menzel to learn a bit more.

here is an enormous amount of information on energy in the public domain, and it can be hard for business leaders to cut through noise and work out what matters for their organisation. Now, they have a new resource: an informative, accessible and up-to-date briefing that will help them manage risks – and capture opportunities – as Australia’s energy system transforms. In August 2018, the Energy Efficiency Council (EEC) published Navigating a dynamic energy landscape: A briefing for Australian businesses. The energy briefing is a first-of-its-kind resource for directors and senior executives without a background in energy. Luke Menzel, CEO of the Energy Efficiency Council, talks about why every business should read the energy briefing. How did the idea for Navigating a dynamic energy landscape come about? Over the course of 2017, at the height of Australia’s “energy crisis”, we started being approached by all kinds of entities for support. Businesses, governments and industry associations were all struggling to get their heads around what was occurring in the energy space, why their bills were going up so dramatically, and what they could do to deal with those challenges.

www.energymagazine.com.au

Luke Menzel, EEC Chief Executive Officer

As we dug into what was driving this new interest, we heard a common story: directors and senior executives were recognising that energy was an increasingly strategic and material issue for their business, but if they didn’t have a background in energy, their conversations were driven by what was happening in the news. However, if they went looking for more information, they quickly came up against 300-page reports from organisations like AEMO – long, technical documents that just weren’t presenting information in a way that was useful for a business looking to recalibrate its energy strategy.

November 2018 ISSUE 4

ENERGY EFFICIENCY

However, from the perspective of business, the important thing is finding solutions to problems, regardless of whether those solutions are demand- or supply-side, or whether they are switching to renewables or improving energy efficiency or using demand management. The energy briefing takes a step back; it doesn’t push an energy efficiency agenda in particular. It orients businesses in the energy landscape to give them a sense of what’s driving the transformation and all the different options they have for taking control of their energy position. So it looks at all the different energy options that businesses have, and gives them the agency to choose what mix of measures makes sense for them and their particular circumstances.

We realised then that there was a gap in the market, and a need for something that stepped businesses through why their bills had changed so dramatically, something that gave them a sense of what the outlook was, both in terms of gas and electricity prices, something that explained the underlying drivers for energy market transformation, and something that showed them what they could do about it – whether it was switching to renewables or managing energy.

The EEC is focused on how demand side strategies can solve problems for businesses. Does the energy briefing suggest that eﬃciency is the best energy strategy for business? The EEC and its members have a deep interest in the role of demandside solutions in solving problems for business. We believe that demand-side solutions are underrepresented in energy strategies for business, and we are focused on raising the profile of energy efficiency opportunities.

Besides the fact that it’s an easily accessible document at just 32 pages, what makes the energy briefing diﬀerent to the resources that are already out there? It tells the whole energy story. There are lots of documents and news articles out there that tell pieces of the story, but what this briefing does – for the first time – is step Australian businesses through the different trends that are coming together to drive changes in the strategic significance of energy for them. Bottom line: the briefing gives business an integrated story of what is going on in the energy sector. What can someone already working in the energy industry gain from reading the energy briefing? There is a great challenge across the energy sector as we move into this more dynamic energy landscape. Nonexperts are having to get across a very complex technical area that has material consequences for their business. What we’ve done is create a tool for energy experts to use in their conversations with non-experts so that we can raise the sophistication around the energy conversation across the economy.

The briefing has been created as a resource for senior executives and directors. How can these people best make use of the information and analysis to create change in their organisations? Boards and senior executives will want to assure themselves that their management team is across the full range of options they have to take control of their energy position. The ‘Pulse Check’ is good place to start – it’s a distillation of the questions that businesses that are already leaders on energy strategy have asked themselves internally. What do you think people would find most surprising or unexpected from reading the briefing? It is probably going to be a while before we get back to very cheap, very stable energy prices. There may be a world in which we achieve that down the track, but for the short- to medium-term, we’re facing a unit cost for both electricity and gas which is substantially higher than historic lows. It’s really important that businesses get their heads around this reality and act accordingly: they need to be on the front foot and actively monitor the energy space to make sure that they are across the range of options they have to take control of their energy position. What is the most important lesson or bit of information that you want readers to take away from the energy briefing? We have the technology to keep Aussie businesses competitive as our energy system transforms. The trends and technologies that are driving the energy market transformation are the same ones that they can take leverage to thrive. And businesses that are already leaders in energy strategy are showing how it is done.

Navigating a dynamic energy landscape: A briefing for Australian businesses is free to download and share. Go to www.energybriefing.org.au to get your copy and other resources from the Energy Eﬃciency Council.

The Energy Efficiency Council is Australia’s peak body for energy efficiency, energy management and demand response. The Council is a not-for-profit membership association that exists to make sensible, cost-effective energy efficiency measures standard practice across the Australian economy. The Council works on behalf of its members to promote stable government policy, provide clear information to energy users and drive the quality of energy efficiency products and services.

November 2018 ISSUE 4

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ENERGY EFFICIENCY

EFFICIENCY AND DEMAND FLEXIBILITY:

THE NEWEST ENERGY SOURCES ON THE BLOCK

With electricity bills in Australia on the rise, much attention is being paid to the supply-side of the energy market with little focus on how to manage the demand-side. But the reality is, by treating energy eﬃciency and demand flexibility as resources, consumers and utilities can experience benefits from a reduced need to expand our energy networks. We spoke to Matt Golden, CEO of Open Energy Eﬃciency, to learn more about some of his groundbreaking work in this space.

or consumers, energy efficiency means managing energy output to reduce electricity bills. For utilities, energy efficiency means using less energy to achieve the same outcomes for consumers, which can include changing energy purchasing contracts, switching fuels and using renewable energy and battery storage. Traditionally, energy efficiency is thought of as LED lighting and energy efficient appliances, but with the development of new connected technologies such as the Internet of Things and data analytics tools, energy usage data can be leveraged to provide useful information about demand, potentially increasing energy efficiency. Treating demand flexibility as a resource In order to meet energy productivity targets, Matt Golden argues that energy efficiency and demand flexibility should be treated the same way we treat our other resources. “We don’t want to change energy markets, we just want to enable demand flexibility to enter those markets on an equal

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footing as other resources. The effect it should have is that we can balance the grid and achieve our removal goals and decarbonisation goals at lower costs.” When we talk about demand flexibility, we are looking at the systematic process of moving energy demand away from periods when power is expensive, dirty or constrained, and moving it to periods when energy is abundant, particularly low peak times and times when renewable sources are generating considerable power. The result is that the grid is optimised and prices are kept down. According to Mr Golden, this is exactly the kind of behaviour we should be rewarding in the grid, and the best way to do this is by viewing this “shifted” demand as a resource in it’s own right. “When you measure demand on an hourly basis and locationally, it starts to behave like a power plant, or a battery bank, or a solar farm, or a dispatchable demand response program,” said Mr Golden. And if it can be measured like the input from a solar farm or any other resource, why not monetise that contribution in a similar way?

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ENERGY EFFICIENCY

Accurate measurement is key Mr Golden said the key thing that enables demand flexibility to act as a resource is the ability to use electricity market information to measure not just the kilowatt hour savings by month or by year, but to measure the hourly impact of shifting demand. “The first step toward energy efficiency as a market is agreement on how to measure a standard unit of savings. While it can be complex to measure efficiency gains on individual buildings, by metering portfolios of similar project assets, it’s possible to calculate aggregated savings with a very high degree of confidence,” Mr Golden said. “Investing in efficiency as a portfolio of assets, rather than as individual projects, results in consistent returns, washing out outliers and managing the uncertainty of the individual building counterfactuals.” According to Mr Golden, central to the process is creating flexibility so that we can balance renewables, reduce grid infrastructure investments and keep the lights on at the lowest possible cost to ratepayers. Adapting to change To continue to foster an environment where energy efficiency is valued, Mr Golden said the industry needs to evolve to change the ultimate focus for utilities. “In the US our entire system is setup to encourage utilities to drill holes in the ground and build power plants, which

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is actually not good any more – so there is some restructuring going on,” Mr Golden said. “On the efficiency side of the equation it’s a transition away from utility-centric programs, where you’re typically picking technology winners, deciding how we expect customers to purchase these things and paying in advance. The reality is, markets do not work this way. “What we need to do is introduce markets and market forces into energy efficiency. That means agreeing on how we measure the impact – and it needs to be open source technology available to all parties, it can’t be a black box. From there it’s about setting up systems that encourage market competition and paid for outcomes. “If you can affect demand in a way that is valuable, you get paid for that in a way that is calculated over time. “That sends the right signal into the market, it says that the way you’re going to make the most money and acquire the most customers is to figure out how to sell things to customers they actually want, in the way they want to buy it, while optimising what it is you’re delivering to maximise the climate and mutual benefit.” According to Mr Golden, when it comes to solutions that deliver good value, that customers will actually demand, and that will scale, utilities need to stop thinking of themselves at the centre. “Demand flexibility is different than most other resources. Utilities need to think

about acquiring the benefits, they need to balance the grid, paying for that load balance in resource. “The efficiency industry, which used to be about getting customers paid rebates in advance, and not really having much accountability on the actual outcomes, has to start taking performance risk. Which sounds really scary at first, but every industry takes performance risk.” Mr Golden said in return, the advantage is that efficiency that is delivering good value is much more valuable and will increase the amount utilities are compensated. “In this current system, where we pay customers in advance for adopting energy efficiency measures, you really have no choice but to regulate the industry very strictly, because there’s no incentive to do the right thing. In the case of performance, where you’re getting paid for actual outcomes, the incentives are aligned properly. “Because the incentives are aligned properly, utilities don’t need to be regulated as much. The performance risk if you’re sitting in the market is you deploy products that deliver good benefits, or you don’t get paid.”

Changing the energy climate Mr Golden’s company, Open Energy Efficiency, worked with Californian utilities, regulators, aggregators and evaluators on an open set of publically available caltrac

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ENERGY EFFICIENCY

methods, which are standard methods of how you take meter data and turn it into energy saving calculations that can be relied on. “We’ve also developed something called the OpenEEmeter, which is an open source engine that runs those methods, that’s available to any party. “The reason we’ve built these is that you have to have a product, but you need weights and measures before you can have a market. “Our goal as a company is to enable much larger scale investment in energy efficiency. We have developed that within the market, and then we provide that as a service to utilities and regulators on one hand and the market on the other. “We work for most of the major utilities in California, and many of the states in the US, providing the ability to track the performance of their electrification and energy efficiency programs.” Open Energy Efficiency also works with a range of different companies, including program owners, IOT vendors, contractors and finance companies, providing them with many tools to track their target customers and quantify risk – things you need to respond to the price signal.

Eﬃciency’s place in the global carbon footprint Despite the growing increase in the movement towards more energy efficient operation, the global carbon footprint

is still rapidly growing. Mr Golden said he isn’t surprised that energy efficiency hasn’t had more of a role in reducing carbon emissions, due to inaccurate carbon measurements. “In order to measure the impact of energy efficiency, you need to know when and where it happens. The challenge is that saving kilowatt hours of energy does not necessarily reduce carbon, it has to be done in a period of time that really matters. “It’s totally possible in places like California to reduce a lot of energy and have no impact on carbon, because we’re running negative energy pricing and solar on almost a daily basis.” Mr Golden also believes that for efficiency to have a major impact on carbon emissions, it needs to be done at scale. “If we want energy efficiency to have a real role in this transition, if you want to be able to access the large-scale capital that we need to actually scale to meet the challenge, we have to break free of the paradigm and become a real resource. More importantly, have the right pricing in the market, so that we’re not just making things more efficient, we’re making them more efficient without carbon.” Matt Golden will be speaking more on energy efficiency as a resource at the National Energy Efficiency Conference in NSW 19-20 November 2018.

Matt Golden had been working in the tech industry when he made the leap into the energy industry over ten years ago. “I wanted to do something more meaningful with my life. Initially that meant going into solar, I helped build the first megawatt facility in the state of California. I got the bug. Why do we build the most expensive solar, when we always have the incandescent light bulbs running? This is crazy.” From there, Mr Golden ran a company of around 150 people called Recurve, that was a venturefunded private business doing building retrofits for insulation, HVAC, general and solar using a whole building integrated approach. “It’s an incredibly hard business. All the incentives are stacked against you. Most of the programs that came to help made our business harder and actually reduced our power. “Thinking about how to bring eﬃciency into the market as a resource started when I was banging my head against this wall as a contractor, with all these serious venture capitalists and companies like those providing capital to scale and I couldn’t do it.” Since then, Mr Golden has been trying to solve the problem of how to enable companies like Recurve to integrate and scale in the marketplace.

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November 2018 ISSUE 4

ENERGY EFFICIENCY

TAKING THE PRESSURE OFF: It might seem counterintuitive that a large energy business like EnergyAustralia would make energy eﬃciency and demand management a priority. But EnergyAustralia believes that utilities should be at the forefront of helping customers reduce their energy use – and that doing so will not only benefit customers, it will benefit energy utilities as well.

o why would a large retailer want customers to use less energy? It’s a good question. Demand response is another example of how the energy industry has been turned upside down in the past few years. Customers participating in a demand response program agree to moderate their energy consumption for short periods to offset extreme demand or during emergencies. It’s a way of securing reserve capacity, easing the strain on the electricity system and avoiding involuntary load shedding. For example, a particularly high-demand summer day might trigger an agreement for a business to reduce its load by running its equipment less. Or it might mean tapping into the solar energy

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stored – but not being used – on a customer’s rooftop. So, demand response is good for system security. It also makes sense for customers, who typically receive a financial incentive in exchange for participating in the energy market supply and demand balance, by reducing their demand or making excess energy available to the market. But there are benefits for the energy company, too. Energy is a service. An energy company that helps customers use energy more efficiently is a valued long-term partner – the energy expert. Customers are looking for more than help with the energy they consume. Today, they also want advice about the energy they produce and how that can be used to support the grid.

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ENERGY EFFICIENCY Our energy system is designed to cater for demand on our few extreme heat days every year – but EnergyAustralia is looking into ways to flatten this demand.

THE ROLE OF UTILITIES IN DEMAND RESPONSE by Andrew Perry, NextGen Executive, EnergyAustralia

They want control of their energy, so they can keep costs down. The second benefit has to do with optimising the assets we already have – the cheapest generation is the generation you don’t have to build. Energy distribution networks are designed to cope with peak demand. But it costs a lot of money to have a system that has capacity for those limited situations. Demand management flattens the peaks, meaning we avoid having to invest millions of dollars in expanding the system for those small number of peak periods. In other words, we no longer need a “nine-lane freeway” to cater for just one or two extreme days of heavy traffic each year. As a community, that is money we save. In Queensland – to illustrate what is at stake – 50 cents of every dollar spent by the State Government on energy infrastructure goes to providing capacity for just eight hours per year. Australia’s energy system is in the midst of a ten to 20 year transition, moving from large, centralised power generation based on coal, to a new, modern energy system underpinned by a

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cost-effective mix of technologies dominated by renewables. Building new, cleaner generation capacity is just one side of the equation; demand response – reducing strain on the system at peak times – is the other. EnergyAustralia is part of a pilot program to deliver around 200MW overall of demand response reserve capacity across New South Wales, Victoria and South Australia. Over three years, the trial by the Australian Renewable Energy Agency (ARENA) and the Australian Energy Market Operator (AEMO) will free up temporary supply during unplanned outages and extreme weather, such as prolonged summer heatwaves. Last summer, EnergyAustralia proved 43MW of demand response, equivalent to keeping the lights on for 7000 homes. This is capacity which can be called upon at short notice should availability in the national electricity market fall to critical levels. This is an important part of our strategy as we start to use more and more of the distributed energy resources which sit in consumer residences and start to integrate that into a more reliable system.

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ENERGY EFFICIENCY

Encouraging customers to reduce their energy use on peak demand days is just one step utilities can take to help reduce the load on the system.

EnergyAustralia has been awarded up to $9.8 million under the ARENA and AEMO collaboration to test proof of concept projects aimed at supporting grid security and stability. This supports a range of initiatives from basic notifications to customers to reduce their energy demand, through to high-tech monitoring devices, battery storage and converting some industrial processes to run on biofuel. It can also involve recruiting so-called “lazy” assets – underutilised power generation, for example, in the form of backup generators at airports and factories – in times of need. This is about managing usage in those peak periods to ensure reliable, affordable supply. Here is why that is so critical: the only way to ramp up in peak usage periods is through fast start generation. Unfortunately, coal-fired plants – cheap energy – does not solve for this problem. These sites physically cannot start fast enough. The only technologies to contend in rapid response are batteries, hydro or gas, all fast start generation. But these are more expensive technologies. As consumers, we also pay for poles and wires at their maximum potential capacity, all year round, just so they can deliver the energy that is required in those very few peak times.

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By flattening out some of those Himalayan peaks in demand, we optimise our assets and we lower costs. The changing energy market offers opportunities for businesses and customers to uncover new revenue streams. From dialling down consumption as a step towards reducing higher network charges, to earning revenue through reduced usage or exporting generation during peak demand periods, effective energy use helps optimise everyone’s bottom line. At EnergyAustralia, we are building programs that encourage “mindful energy use”. We are developing and expanding the use of multiple technologies that hand control back to the customer, we are trialling devices that remotely control appliances in the home, and we are rewarding customer responses to high demand events. By making demand response a consumer product and by giving the customer fair value in exchange for their participation, we aim to make energy efficiency and demand response sustainable. In its absence, electricity prices will continue to spike on days of extreme weather and high demand. Offering these services helps our customers through compensation for their contribution to energy supply and demand balance, optimises our infrastructure investments and ultimately drives down costs for all of us.

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RENEWABLES

November 2018 ISSUE 4

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RENEWABLES

ENERGY ACCELERATED: AUSTRALIA CAN LEAD THE ENERGY FUTURE IF IT EMBRACES ACTION NOW by Michael Rath and Kumar Padisetti, Deloitte Australia The debate surrounding Australiaâ&#x20AC;&#x2122;s energy policy is fractured but valuable opportunities in the new energy future await if the industry moves fast and together.

espite almost daily headlines about energy policy and the trail of former prime ministers it has skewered, the sector is marking rapid growth in household solar and there is a strong appetite in utility-scale renewables. Corporate Australia is leading consumers to the new energy future, with banks, miners and retailers leading a shift to boost their green credentials among institutional investors and shareholders. Companies, including banks, are leading the space to new environmental products and services. Consumers are driving this shift and from a pure business point of view, the cost of renewables has been driven down considerably. Bloomberg New Energy Finance has predicted $US11.5 trillion will be invested in new generation capacity in the next three decades, and the investment in wind and solar is estimated at $US8.4 trillion in the same period. Despite the lack of energy policy progression, companies have begun firmly embracing the clean energy agenda, in the anticipation of carbon liabilities and potential future revenue streams.

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November 2018 ISSUE 4

RENEWABLES Globally two-thirds of Fortune 100 companies have explicit renewable energy targets and 152 companies of the RE100 companies – a who’s who of global iconic brands – are committed to going 100 per cent renewable. Deloitte’s Energy accelerated report explores where to now for Australia. Will Australia move fast and together, lead, lag or stagnate? The reality is policy certainty would make it easier for the market and less expensive to transition if it was aligned to where industry is heading. Deloitte’s modelling has identified four scenarios which outline the future of energy domestically to assist the energy sector position itself for the future. This report highlights there is a clear opportunity for Australia to lead the world in clean energy in a once in a lifetime shift, and if we lag or stagnate, we risk missing business and commercial opportunities. A mix of renewable energy sources including solar and wind, supported by energy storage options including batteries, pumped hydro and hydrogen, and underpinned by gas, will provide critical firming capacity to support intermittent renewable sources needs. An increased use of renewables, more gas and a reduction in coal are evident in all four scenarios and this gives power companies and large consumers’ strategies and alternatives as the fuel mix evolves. Australia has one of the most advanced energy markets in the world. It is a test case for disruption, the development of new trading models, reconfiguration of energy networks and the development of innovative smart energy technologies. South Australia leads the charge in world-leading renewables with storage on track for 100 per cent renewables by 2025. South Australia is also leading early pilot stage trials for hydrogen production, a $US2.5 trillion global industry, according to Morgan Stanley. In Victoria a $10 million Microgrid Demonstration Initiative supports eight projects statewide. The sector is embracing low carbon energy and should continue to, in order to harness untold opportunities to boost Australia’s economic growth, draw foreign investment and put Australia firmly in place as a world-leading international innovation hub. To the north, Asia represents a $290 billion export opportunity, according to an analysis by the International Energy Association. The Australian Renewable Energy Agency (ARENA) estimates low emissions hydrogen could contribute $1.7 billion to the Australian economy annually.

Australia’s Chief Scientist Alan Finkel has pegged hydrogen as the next multi-billion export industry, saying the long held dream of meeting energy needs with clean hydrogen is becoming a reality. Energy accelerated identifies the need for stakeholders to collaborate and quickly mobilise resources to successfully capitalise on the opportunities within the grasp of Australian industry. Competitive dynamics are shifting – new energy is more collaborative, with industry, business, government and consumers set to work seamlessly together in the new energy mix to underpin supply and shift costs down for consumers. What needs to transpire is for industry to recognise the opportunities and aspire to innovate to provide a technological and societal advantage for Australia in the energy future. The shift towards renewables, which are now at price parity with traditional supply, poses a number of questions.

What role will traditional suppliers play in Australia’s energy future? A trilogy of constructs – policy, consumer and new technologies – will drive each of the four identified scenarios in Energy accelerated and that is driving transformation. North Asia is the economic imperative driving the shift by traditional energy companies towards the hydrogen future. There is a shift among traditional global energy producers who are looking at building hydrogen networks and a generation of hydrogen through electrolysis. Jemena, the largest gas distributor of gas in NSW has been successful in securing ARENA funding for a hydrogen project which involves designing and constructing a power-to-gas (P2G) facility to source renewable electricity and convert it into hydrogen via electrolysis. In the short to medium term companies are looking at dispatchable energy sources such as hydro and battery to add resilience to Australia’s energy mix. Large-scale renewables, including solar and wind, will likely continue as large retailers continue to off take. Microgrids are also being utilised by Ausgrid as it seeks to utilise more solar in its local networks in a bid to lower demand on the grid and reduce the need for the company to replace ageing infrastructure. At the end of the day, the market is driving the energy transition to capitalise on the opportunities the future of energy will reward those who move fast and together, and make a choice to lead in the space.

What needs to transpire is for industry to recognise the opportunities and aspire to innovate to provide a technological and societal advantage for Australia in the energy future. 24

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Alexander Herrera Application Engineer

Safe testing of GIS circuit breakers I have often heard test engineers complain that timing tests on GIS circuit breakers can be difficult or unsafe to perform. Now Iâ&#x20AC;&#x2122;m happy to present a new solution to these challenges. With its flexible design, the new current sensor measurement (CSM) method can be quickly applied to almost any kind of GIS circuit breaker, while the test engineer stays safe thanks to grounding on both sides. GIS testing can be that easy. www.omicronenergy.com/GIS-breaker info.australia@omicronenergy.com Australia: 03 9473 8400 | New Zealand: 0800 6642 766

RENEWABLES ENERGY PARTNER CONTENT

SPEED, POWER AND MOBILITY SOLAR SUCCESS KEY TO

The Australian utility-scale solar market has been gaining momentum, and increasing competition amongst engineering, procurement and construction (EPC) contractors is leading to demands for top-in-class piling services. In order to meet these demands, Sequentia Services has taken a holistic approach to the market, selecting equipment and a supplier that allows them to exceed client expectations despite Australiaâ&#x20AC;&#x2122;s challenging installation environments.

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ENERGY PARTNER CONTENT RENEWABLES

equentia Services specialises in servicing the large-scale solar farm and the utilities construction sector. On solar farms, its primary focus is the installation of piles that support the arrays of solar panels. A holistic approach to machine selection Eamon Doyle, Managing Director at Sequentia Services, said the company took a holistic approach to the market and the services it provides when building its piling fleet. Among the key considerations that were taken into account were: » The machines needed to get the job done effectively in varying ground conditions while meeting piling tolerances and velocity rates » With its wide client base, the supplier needed to be able to provide excellent support no matter the project location » The machinery needed to be robust in order to handle the harsh nature of percussive pile driving and solar farm environments » Machine availability and utilisation needed to be high, with the supplier having trained staff and carrying the right parts in the right locations “After evaluating the products on offer we felt like two manufacturers’ piling equipment stood out. In the end the choice to go with Vermeer was made on what we believe to be the lowest cost per pile installed over the life of the machine,” Mr Doyle said. “The Vermeer PD10 is our piling machine of choice. The PD10 is a high frequency, high impact hydraulic hammer driven piling machine. It is capable of being operated from a ROPS compliant operators station, or remotely via a handheld controller. With our longest mast sections we can handle piles up to six meters in length. An auto plumb feature brings the pile to a true vertical position, easing the operating teams workload. “Vermeer also has the ability to respond quickly anywhere in Australia. It has a network of branches across the country as well as online monitoring tools with features such as machine hours, any faults that may be happening or have been logged, location, fuel consumption, notifications on upcoming scheduled and planned maintenance events, updates and access to the operation, parts and service literature.”

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Improving productivity in rough terrain Sequentia Services recently delivered a 300MW solar project for Catcon in Port Augusta, South Australia. The solar farm was delivered over three stages, requiring a total installation of over 160,000 piles. Mr Doyle said the PD10 proved to be particularly effective in handling the rough terrain of Port Augusta which is uneven and cannot be altered. “The PD10’s broad ground cover, wide tracks and levelling abilities allowed the piling production to reach the best possible production rates for the conditions,” Mr Doyle said. “The temperature in this region can top 48°C; having a machine whereby we could take the stresses off the crew by having them seated, using electric controlled joysticks rather than levers acting directly on hydraulic control valves was valuable. “Also on the uneven ground, the auto plumb feature is priceless, saving time and producing the accuracy required. The auto plumb worked overtime, with significant adjustments of the mast positions every pile, and the varying subsoil conditions across the site meaning piling required more force. “Combined with its high piling force, this all means we were more productive over the long run.” The importance of a supportive relationship Mr Doyle said that the service and support Vermeer has provided Sequentia

from the purchasing of the PD10 through to their ongoing field service, has played a part in their success and the decision to purchase additional PD10s. “I think it’s difficult to quantify the benefit a supportive relationship with the equipment supplier brings until the chips are down. Vermeer has been in Australia and supporting major infrastructure projects for almost 30 years now. Knowing that if and when something gets out of parameters, Vermeer is only a phone call away, that gives me a lot of confidence in taking on jobs that are remote and difficult. “Vermeer has been a pleasure to deal with. Ken Smith and the Brisbane team have been open and easy to communicate and deal with, as well as Nigel Dobier and Matt Reid in North Queensland when we were working up there. “In South Australia Steve Batchelor was fantastic. Supported strongly by Ben Macintosh in Port Augusta, they performed as well as I could have hoped for. Any issues that arose were dealt with promptly and factory support was there to listen to any complaints or suggestions on how to make the machines better. “The typical piling contract is not that long; three to five months. Each contract in a new location. Vermeer is on site and in the dirt with us, making sure we’re successful. “Vermeer’s people and the extra steps they have taken to support me helped make my decision to buy additional PD10s.”

With the PD10 solar pile driver, Vermeer oﬀers solar industry pioneers the high-quality, productive equipment solution this rapidly expanding market demands. » » » » » » » » » »

Horsepower: 49 horsepower (36.5kW) Maximum operating height with a 20ft (6.1m) mast: 7.6m Rollover protection system (ROPS) rating: 7393.6kg (compliant with all Australian safety regulations) Maximum pile dimension (round – standard opening): 18.3cm Maximum pile dimension (square – standard opening): 15.7cm Maximum pile dimension (round – large opening): 23.6cm Maximum pile dimension (square – large opening): 23.6cm It is the only solar pile driver with a seated operator’s station and remote control Compliant with Carlson GPS systems 1500 bpm (beats per minute) high-frequency hammer

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RENEWABLES ENERGY PARTNER CONTENT

DRIVING DOWN COSTS AT

AUSTRALIAN SOLAR FARMS Intelligent positioning solutions provider Position Partners has teamed up with specialist equipment manufacturer Vermeer to streamline pile driving applications in the Australian solar industry.

he amount of posts required for a solar farm varies greatly, from a few hundred to a few hundred thousand. Traditional methods are labour intensive with potential for human error, as they involve a surveyor manually staking out each pile location, along with continuous stringline installation to guide the machine operator. If any pile is a little off its desired location, the racking system that is used to house the solar panels may not fit. By eliminating the need for manual stakeout and stringlines, the new semi-autonomous solution not only speeds up the process, it also guarantees greater accuracy and improved safety by removing the need for people to work close to the pile driving machine. “Depending on the project, we estimate that contractors save between eight to ten dollars for every pile they drive,” said Andrew Granger, Position Partners Business Manager for Mining, Solar and Landfill. “On a small solar farm where every dollar counts that’s a good saving, and on a large-scale farm the savings are significant,” he added. Carlson machine guidance includes a variety of sensors fitted to the machine, along with a precision GPS unit and a control box that gives the operator real-time information about location,

Precision Solar Farm Technology

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For more information about the semi-autonomous pile driving solution contact Position Partners on 1300 867 266 or visit www.positionpartners.com.au

Drive more piles, more accurately Semi-autonomous pile driving technology combines the Vermeer PD10 pile driver with Carlson PDGrade machine guidance to: • • • •

depth and angle of each pile. With all the information required on screen, the solution eliminates the need to manually stake out the piles altogether. When combined with Vermeer’s PD10 pile driver, the benefits of Carlson’s machine guidance are further increased. Vermeer opened up the machine’s CANBUS system to allow for greater communication between the machine and the guidance technology, creating a semi-autonomous solution that reduces the risk of human error even more. “We’ve been working with Carlson’s Australian distributor, Position Partners, for some months on this solution, with great success,” said Jeff Lawson, National Construction Sales Manager at Vermeer Australia. “Vermeer’s most advanced pile driving machine, combined with Carlson’s machine guidance and our combined technical support capabilities, enables us to offer a winning combination for Australian contractors.”

Increase productivity Improve safety Eliminate stringlines Reduce survey costs

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RENEWABLES ENERGY PARTNER CONTENT

SYNCHRONOUS

CONDENSERS SUPPORT

AUSTRALIA’S

CLEAN ENERGY TRANSFORMATION

Csaba Szabo, ABB Australia’s HV and MV motor and generators product manager, explains how synchronous condensers are making a major comeback to help stabilise power grids as the penetration of solar and wind power increases.

Csaba Szabo.

November 2018 ISSUE 4

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ENERGY PARTNER CONTENT RENEWABLES

To achieve effortless control coordination, ABB can provide the condenser control panels with all necessary monitoring, protection and regulation functions configured with customer requirements.

One of ABB’s synchronous condensers installed in-situ.

report published in September 2018 by the Australian National University’s (ANU) Energy Change Institute indicates the country’s renewable energy industry will install more than 10GW of new solar and wind power by the end of 2019. If that rate is maintained, Australia will reach 50 per cent renewables in 2025. This is great news for Australia’s energy transition. But the intermittency and variable nature of solar and wind power presents a growing challenge for our power networks. The use of renewable energy alone, without a reliable backup energy source, means that it is unable to tolerate network faults or fully play a grid support role. As renewable energy plays an increasingly important role in the energy mix, there will be a corresponding reduction in the resilience and stability of electricity networks. One example of this challenge is the medium- to large-scale solar farms that use inverters to convert the direct current (DC) produced by solar panels to the alternating current (AC) required for the local power network. A fault occurring somewhere in the network can cause the inverter’s protection equipment to take it offline. The result is that the solar farm has no capability to ride through network faults. A further effect of the increased use of renewables is that many conventional power plants are being decommissioned. That means there are fewer sites with the large rotating generating equipment that grids have relied on for the short-circuit power and inertia to maintain their stable operation. Synchronous condensers – a traditional solution for new problems A growing number of network operators and renewable energy developers, especially in southern Australia, are now

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turning to synchronous condensers (SCs) to provide additional short-circuit power to strengthen their grid. SCs also help maintain power quality and provide fault ride-through capability. SCs are rotating electrical machines that closely resemble synchronous generators. However, they are not a generator as they are not driven by an engine or turbine. They’re also not a motor, as they do not drive a load. ABB has been manufacturing SCs for around a century. They were used widely to provide reactive power to networks to compensate for induction motors and other highly inductive loads. However, advances in power electronics led to a decrease in their use over the past two decades. This trend is now in reverse – with SCs being on the uptake – as today’s networks evolve to handle the increased penetration of renewable energy. This is because short-circuit power and kinetic reserve are only available from rotating machines such as SCs.

ABB’s modular synchronous condenser solutions ABB’s synchronous condensers feature a brushless or static excitation system that allows for considerable over-excitation (field forcing) to cope with network contingencies. Excitation control is provided by an automatic voltage regulator (AVR) which is tuned to match the requirements of the specific application. A typical ABB SC module includes equipment such as condenser cooling, lube oil supply, auxiliary power distribution, excitation system, and starting equipment supplied in combinations with computer simulation models. This enables the SC module to be delivered as a complete, self-sustained package tailored for specific performance requirements, site conditions and optimal costs.

Large power capability for fault support and provision of kinetic energy Engineers specify the direct fault support in megavolt amperes (MVA) and kinetic reserve in megawatt seconds required for their network. This determines the number and unit power of the SCs to be installed. It’s possible for SCs to deliver six to ten times the nominal power for reactive fault support. If extra kinetic energy is needed, then we will specify a flywheel or oversized machines. ABB supplies SCs in the power range 1-75MVA at a system voltage of 3-15kV. Network voltages are usually much higher, so a step-up transformer is used. The modular design enables several SCs to be combined for higher outputs of hundreds of MVA. This solution also provides better redundancy and availability than a single large unit. SCs can be started by a frequency converter, direct online, or using a pony motor. Normally, SCs are water-cooled, but other cooling methods are also available. For example, ABB’s air-water-air (CAWA) cooler enables SCs to be installed outdoors at sites where no water is available. To support Australia’s transition to clean energy, ABB can supply SCs on a product basis. However, ABB also offers a turnkey approach that starts with a pre-study to understand the specific application and site needs. Based on the results, ABB can develop a complete SC solution including switchgear, ancillary equipment and buildings.

Csaba Szabo.

November 2018 ISSUE 4

GRID INTEGRATION AND STABILISATION

INNOVATIVE TECHNOLOGY TO ENABLE MORE SOLAR EXPORTS Energy Queensland and its subsidiary distribution utilities, Ergon Energy Network and Energex, are deploying a new technology to improve customer power quality and enable increased solar exports to the grid. Low voltage statcoms are being utilised to manage power quality and improve voltage regulation for customers on the 230V network.

s one of the world’s hotspots for rooftop solar photovoltaic (PV) systems, Queensland’s electricity network has seen a fundamental shift in how customers interact with the grid. With more than 500,000 solar PV systems installed throughout Queensland, two-way power flows are a common occurrence on the low voltage (LV) and medium voltage (MV) network (i.e. the 11kV, 22kV and 33kV network), as customers look to sell their excess generation. This two-way transfer of power creates challenges for the grid that has historically been designed for one-way power transfer. Electricity grids of the early- and mid-20th century were designed to deliver power from centralised generators to end-use customers. The main challenge they faced was meeting maximum customer demand. However, the changing customer interactions of the late-20th and early-21st centuries have seen this paradigm begin to shift. Electricity grids are becoming more interactive, as customers invest in their own generation and utilise technologies like energy storage and home energy management systems to

November 2018 ISSUE 4

more actively manage their energy needs. Although maximum demand is still a concern for utilities, the evolving conundrum requires solutions that can manage a more diverse and rapidly changing set of network conditions. The grid of the 21st century must be capable of meeting periods of high load, low load and reverse power flow cost effectively.

Arriving at statcoms as the ‘right’ solution Ergon Energy Network’s move to add LV statcoms to its arsenal of network solutions is an example of how it is working to address this issue with solutions that are innovative, cost effective and flexible. The decision to deploy LV statcoms as an additional network management tool is the culmination of pilot and trial projects that demonstrated the benefit LV statcoms can provide. Statcom is a concatenation of STATic synchronous COMpensator. Statcoms are voltage source converting power electronic devices, similar in nature to solar PV inverters. They help to regulate voltage by drawing or injecting reactive power from the grid by generating a current that leads or lags the network voltage. www.energymagazine.com.au

GRID INTEGRATION AND STABILISATION

Energy Queensland technology innovation engineers Adrian Lloyd (left) and Matt Zillmann test a Statcom unit in the laboratory.

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November 2018 ISSUE 4

GRID INTEGRATION AND STABILISATION

Statcom units in place.

In 2013, Ergon Energy Network first investigated the application of statcoms in its distribution network. This pilot assessed MV- and LV-scale devices to assess their ability in managing network voltage. Following the promising findings of this pilot, Ergon Energy Network conducted a market scan, trialling a number of different LV statcoms as a part of the Urban LV Statcom Project based in Townsville. This project assessed a range of different characteristics about these statcoms, including their affordability, reliability, ease of use and performance. The success of this trial saw Ergon Energy Network proceed to tender in 2017 for the supply of LV statcoms, and ultimately sign with Brisbane-based business Statcom Solutions. Ergon Energy is now in the midst of deploying this technology as another tool to manage low voltage networks.

Statcoms, power quality and solar PV Statcoms have traditionally been utilised in transmission networks and areas with high reactive power transfers. In these applications, large-scale statcoms provide power factor correction and voltage support within the transmission network. Ergon Energy Network’s move to utilise statcoms in its LV distribution network leverages the same technology and principles at a smaller scale. In doing so, Ergon Energy Network is drawing upon a diverse range of solutions to build a flexible network that is equipped to meet changing customer needs.

November 2018 ISSUE 4

To date, the use of LV statcoms within Ergon Energy Network’s grid has been targeted at overhead three-phase distribution network with high levels of rooftop solar PV penetration and large evening loads. The impedance characteristic of overhead three-phase networks lends them to voltage regulation through reactive power management, known as Volt-VAR regulation. To deal with the traditional challenge of peak demand, during which the network can experience low voltage issues, the LV statcoms supply reactive power to the network and boost the voltage. This has the added benefit of providing a localised supply of reactive power for customer loads that tend to consume varying levels of reactive power. However, one of the advantages of LV statcoms is that they provide a means for managing the prevailing challenge presented by rooftop solar PV – voltage rise resulting from reverse power flow. During periods of light loading and high solar PV generation, reverse power flow can cause LV network voltage to rise. If the ten minute average voltage at the point of connection of the solar PV inverter rises above 255V (for a single phase unit), AS 4777.2:2015 requires that the inverter disconnect, stopping generation from the solar PV system. During periods of high network voltage that correlate with high solar PV output, LV statcoms help to reduce the network voltage by drawing reactive power from the grid. As a result, the benefit for solar PV systems and customers alike is two-fold: 1. Lower voltage during periods of high solar PV generation makes it less

likely these systems will disconnect, maximising the output from existing solar PV systems 2. Better voltage regulation helps to remove constraints that may otherwise limit additional solar PV systems from connecting to the grid, while limiting the potential for damage to customers’ appliances due to under or over voltages In May, Ergon Energy Network completed its first LV statcom installation in Mossman, North Queensland. Although the systems are yet to experience the height of summer solar PV generation, they have already proven their worth by: 1. Maintaining the localised grid voltage at levels that have not caused customer solar PV systems to trip 2. Allowing additional voltage “headroom” for PV exports 3. Improving the overall voltage regulation and power quality for customers supplied from the local network As summer approaches, the LV statcoms will help to minimise solar PV disconnections, and provide a detailed understanding of the performance of the LV network via their remote monitoring capability. Over the coming months, Energy Queensland will be working to finalise the deployment of LV statcoms within its two utility networks and look to utilise them as an additional tool in managing network constraints. Future installations are currently planned for Wycarbah (near Rockhampton), Hervey Bay and Brisbane.

Mick Bellero (left foreground, Technical Lines Person in Mossman) and Anthony Torrisi (right background, Technical Officer in Cairns) install statcom equipment at Mossman.

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GRID INTEGRATION AND STABILISATION

Feeder Impedance

jX +

ILoad

+ =

VSend

VLoad -

Standard Network During normal load conditions voltage reduces at the load end of the feeder due to the voltage drop across line impedance as shown in the vector diagram.

VSend ILine ILoad

ILine x jX

VLoad

ILine x R

Feeder Impedance

jX +

ILoad

ILine = ILoad- IStatcom

VSend

IStatcom VLoad

Statcom Boosting Voltage The statcom boosts the localised grid voltage by injecting reactive current and thus modifying the line current and resultant voltage drop. Note that the VLoad in the vector diagram (right) is larger than the example without a statcom above.

ILine

VSend

ILoad

IStatcom

ILine x jX

VLoad

ILine x R

Feeder Impedance

jX +

ILoad

VSend

IStatcom

ILine = ILoad + IStatcom

VLoad -

Statcom Reducing Voltage The statcom reduces the localised grid voltage by drawing reactive current and “pulling” the voltage down. Note that the VLoad in the vector diagram is smaller than the previous two examples.

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VSend

ILoad ILine

IStatcom

VLoad

ILine x R

ILine x jX

November 2018 ISSUE 4

GRID INTEGRATION AND STABILISATION

NORTHERN TERRITORY

TRANSFORMS

REMOTE POWER DELIVERY

November 2018 ISSUE 4

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GRID INTEGRATION AND STABILISATION

The Northern Territory Power and Water Corporation is delivering an award winning solar program to transform the way power is delivered to 25 remote Northern Territory Aboriginal communities.

Power and Water Corporation staff hold an Open Day for Maningrida school children.

he Solar SETuP program will provide 10MW of solar, enough to power 1750 remote households, and reduce the amount of diesel used in generators by at least 15 per cent. The $59 million program is co-funded by the Australian Government’s Australian Renewable Energy Agency (ARENA), and was an award winner at the recent Northern Territory Engineering Excellence Awards. Power and Water Corporation is transforming its approach to remote power stations with the integration of solar to its diesel power stations, including piloting the use of battery storage. The project specifications include the installation of solar panels on land near the community they serve, creating a solar farm. The panel’s solar cells are thin plates of light sensitive material, usually silicon. Sunlight frees electrons to move through the cells in a photovoltaic effect, making direct current (DC). The DC is transformed into alternating current (AC) by banks of inverters channelled into the nearest infrastructure, and then into homes. One inverter can collect energy from about 80 panels. The array is electrically bonded and comprehensively earthed, and a lightning protection system is erected. Once the solar farms are up and running they are largely maintenance free. Engaging with each community is a major part of the project. Each community is located on Aboriginal land, so there are

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significant cultural considerations in the project planning phase. The project team undertakes detailed negotiation to ensure they have the proper permissions in place to install the infrastructure and remains engaged with the community throughout the project. Generally, Aboriginal communities have embraced the technology which is viewed as getting “energy from country”. There are also immense logistical challenges in getting the infrastructure in place, including the harsh tropical climate, the tyranny of distance and complex access issues.

Maningrida solar farm Maningrida is around 500km from Darwin, with seasonal road access via a network of sealed, gravel and dirt roads. From December to March, the Top End wet season, the road is often impassable. It is located at the junction of the Liverpool River and Arafura Sea. Its traditional owners are the Kunibidji people. It was established as a permanent settlement by Aboriginal people in the 1940s and was converted to a mission in the 1950s. With a population of 3000, it is now a major centre in Arnhem Land and has a school, health clinic, service station, convenience store and café, two supermarkets, a police station, crèche and a community arts centre. Goods can be transported in and out of the community on the weekly barge service. Its solar farm has 2500 panels located in a fenced compound about two kilometres from town. Previously woodland, the compound was cleared and constructed with the help of locals. The resulting tree bark was offered to the local arts centre to be used for bark painting and mulch was provided to the community for landscaping. The SETuP PV installations at Maningrida have operated since February 2017 and are saving around 300,000 litres of diesel fuel a year. The panels will produce enough clean electricity to power 130 households in the community and reduce its reliance on diesel fuel by 15 per cent.

The Maningrida solar farm from the air.

November 2018 ISSUE 4

GRID INTEGRATION AND STABILISATION

JOINING THE DOTS

TO HELP MORE

CUSTOMERS

JOIN THE SOLAR EVOLUTION An exciting two-year, $2.9m project led by The University of Queensland and part-funded by the Australian Renewable Energy Agency’s (ARENA’s) Advancing Renewables Program is developing and trialling a highly sophisticated distribution network analysis tool to lower the barriers to the connection of mid-sized solar PV systems to the network.

he University of Queensland’s Solar Enablement Initiative is less than a year old, but so far, all signs are indicating that it will not only deliver on its objective, but identify myriad other uses for the State Estimation Algorithm that underpins the analysis tool. The adoption rate of solar PV systems reached dizzying heights in Australia in 2012 thanks to federal and state government incentives, electricity prices, falling PV system prices, and a growing desire by some customers for more control over their electricity supply. Solar PV installation rates slowed until early 2017, then began increasing again and show no signs of abating.

Australian businesses were slower to adopt solar PV, but that is changing as many see the economic, environmental and even marketing value. The high rate of PV penetration in many areas means electricity distribution network operators (distributors) must conduct a desktop technical assessment of every application to connect a PV system above a designated capacity (generally 30kW). Naturally, these are mostly on business premises.

It is hoped that the project will allow more Queensland residents to install solar panels on their homes and enjoy the benefits of solar power.

November 2018 ISSUE 4

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GRID INTEGRATION AND STABILISATION Those assessments are complex, time-consuming and based, to varying extents, on assumed data. The assessor and their tools must assume a conservative, even worst-case, scenario of electricity demand and PV generation to ensure that the operation of the PV system will not interfere with the electricity supply to other customers on the local network at any time. Often, assessment outcomes will dictate that to be able to connect the desired capacity and configuration, the customer must fund network upgrades or adjustments, as well as network protection devices as part of their PV system. Sometimes, these unforeseen costs make the PV installation unviable for the customer. Distributors must juggle the competing priorities of meeting government, customer and PV industry expectations that customers who want to have PV systems installed be allowed to, with the technical reality of electricity networks not being originally designed to accommodate the electrical impacts that PV systems have on them. ARENA is interested in seeing network-related impediments to more solar PV connections reduced. The Solar Enablement Initiative, led by The University of Queensland, also includes electricity distributors Energex, United Energy and TasNetworks, Australian Power Institute (API), Energy Networks Australia (ENA), community builder Springfield City Group, Queensland University of Technology and consultancy Aurecon.

Network monitoring devices are just one source of data that feeds into the State Estimation Algorithm.

The project’s key objective is to demonstrate that the semiautomated network analysis tool and the State Estimation Algorithm (SEA) provide a reliable mechanism to allow more flexibility in a PV system’s operation, and thereby reduce the protective measures that currently need to be adopted and funded by the customer. In the simplest terms, the SEA combines and uses data on known parameters of the network, transformer set-points and outputs of voltage power flow meters in conjunction with statistical data about the typical network utilisation. From these thousands of pieces of data, the SEA creates a more complete understanding of load flows and other aspects of the network’s operational state than has ever been possible. State Estimation is used extensively at the transmission network level where it enables a greatly improved utilisation of the network’s true operational capacity, but hasn’t, until now, been adapted for use at the distribution level.

Comparisons of early applications of the State Estimation Algorithm (SEA) with measured states over this two-day period show strong correlations. Differences will be reduced with refinements to the SEA.

In addition, the project will trial the ability of a distributor to use the SEA, among other tools, to dynamically reassess, and possibly raise, current limits imposed on the export of a PV system at times, thereby allowing it to export as needed most of the time. This outcome would create financial and other benefits for the customer, reduce network risks, enhance network benefits and help “green the grid” by facilitating much more renewable energy export than otherwise possible. The tools will be trialled on seven network feeders across the three distribution networks. The distributors – Energex in South East Queensland, United Energy in south-east Melbourne, and TasNetworks across Tasmania – have quite different network topologies, data systems and solar PV penetration rates. The feeders selected also have different network topologies, customer types and even weather conditions. The core project team at The University of Queensland is led by Professor Simon Bartlett, who brings to it over 40 years of experience in the electric power industry and academia. The SEA development is led by Dr Olav Krause, supported by six full-time researchers. In addition to the $1.19 million in funding from ARENA, the API, ENA and Springfield City Group have all made financial contributions, with all project partners providing substantial in-kind contributions, including Energex providing a Project Manager. The project’s objective is to deliver a working prototype, rather than a set of tools to hand over to the participating distributors. Once the prototype has been successfully tested, the next challenge lies in extrapolating it to a whole-of-network solution for the participating distributors, and other Australian and even international distributors, under a commercialised arrangement. For the Springfield City Group, master developer of Greater Springfield just south-west of Brisbane, involvement in this project is a reflection of the exciting vision that team has for the interconnected role that electricity and information technology has in their city’s development. They will host the first trial of a distributor, giving a customer access to dynamic export permissions for controlling the export of a privately-owned, mid-sized solar PV system using the State Estimation Algorithm as a basis. These are exciting times to be helping to create more intelligent electricity grids that enhance their role as enablers of customer desires for greater choice and control in their electricity supply and use.

FOR MORE INFORMATION ABOUT THE SOLAR ENABLEMENT INITIATIVE, CONTACT: Project Director Professor Simon Bartlett, simon.bartlett@uq.edu.au, 0411 600 584 Project Manager Dean Comber, dean.comber@ergon.com.au, 0409 678 003

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November 2018 ISSUE 4

INSIDE POWER PLANTS

PLANNING FOR A

NEW ENERGY

FUTURE

As existing coal-fired assets reach the end of their natural service life, companies like AGL are faced with the question of how to replace the existing generation capacity with technology that meets the requirements of an evolving energy market. We spoke to David Johnson, AGL’s General Manager Development and Construction, to learn a bit more about the process the company goes through when designing and developing new assets.

n July 2017, AGL announced a $295 million investment to develop a 210MW reciprocating engine power station, the Barker Inlet Power Station (BIPS). This station will sit alongside AGL’s Torrens Island Power Station site, 18km from Adelaide’s CBD. The BIPS will comprise 12 reciprocating engines capable of generating approximately 18MW of output each. The engines operate at high efficiency and with a lower heat rate than other forms of fast-start plants currently available. The station will also be capable of operating at full capacity within five minutes, providing a rapid response to changes in renewable generation supply. The BIPS will replace two of the four Torrens A turbines, which AGL will progressively mothball from September 2019. AGL also has development approval to build an identical BIPS Stage 2 which would replace the remaining A Station units, although at this stage, no decision has been made to commit to stage 2. This decision may be taken following further assessment of the electricity market in South Australia. The four Torrens B generating units will continue to operate as normal. As South Australia increases its renewable energy generation, sites like Barker Inlet are an important part of the energy mix. Given the importance of this site to the South Australian market (and indeed the national electricity market), we were keen to talk with David Johnson about the process the company went through in designing and developing this new asset. “Torrens A Station turned 50 years old in February 2018, which is quite old for a thermal power station,” said Mr Johnson. “It has reached the end of its economic life and is being retired in

September 2018 ISSUE 3

a planned and structured way. The BIPS project will use 12 dual fuel (natural gas and diesel) low speed reciprocating engine generator sets, each rated at 17.6MW with a total station output of 210MW.” The engines are manufactured by Wartsila Oy of Finland. Wartsila has been contracted to deliver the entire power station under a turnkey contract based on their established plant design installed across the world. When it comes to selecting the equipment and suppliers AGL will work with for its large-scale projects, the assessment process is naturally quite complex. “During the assessment process, we considered a range of aeroderivative gas turbine and reciprocating engine generating plant configurations,” said Mr Johnson. “After assessing a wide range of factors, reciprocating engines were deemed to be the best outcome for the BIPS project for the South Australian electricity market.” Some of the features that led the team to opt for reciprocating engines included: » Very flexible operation » Fast start to station full load » High turndown ratio » Capable of frequent starts without additional maintenance costs » High efficiency (significantly better than gas turbines) » Lower fuel costs and carbon dioxide emissions » Lower total project capital cost

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INSIDE POWER PLANTS

The construction contract between AGL and Wartsila allows AGL’s BIPS project team to work very closely with Wartsila to review the power station detail design and to monitor the construction and testing of the plant. AGL negotiated a comprehensive set of technical specifications based on Wartsila’s proven power station design. According to Mr Johnson, the BIPS project is based on a Wartsila standard plant configuration that has been installed in many parts of the world, particularly into relatively weak networks and large mine site applications. More recently, Wartsila has been selling the same power plants into applications to support wind farm output and for network support, taking advantage of their very flexible and fast response capability. These applications are comparable to the power network in South Australia.

Working with AGL As part of a large operator in the national energy market, Mr Johnson has plenty of useful advice for service and equipment providers looking to work with businesses such as AGL. “It’s important to look to align your values associated with project delivery with those of AGL, and understand the key market drivers associated with the particular project,” said Mr Johnson. He also advises that companies should expect that AGL will take an active role overseeing the project delivery to ensure a high-quality outcome. “AGL will expect to work with the contractor during project execution to review and optimise the project outcomes, particularly in the areas of safety and environment,” he added.

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“When it comes to power plants specifically, be clear about the expectations for the operating requirements for the plant, such as peaking or intermediate load, as well as the value of starting flexibility and the real value of efficiency over capital cost,” noted Mr Johnson. Mr Johnson also advised that potential suppliers be aware of the fact that AGL will always be mindful of balancing capital and operating costs. “Capital and operating costs are assessed in an economic model encompassing the lifetime of the project to determine the project returns against internal hurdle rates,” said Mr Johnson. “The operating profile forecast for the plant is a key input into this analysis which will weight the outcome in favour of capital cost or operating cost.” Energy efficiency is also important to AGL, as it provides both economic and environmental benefits. In the commercial evaluation of a project, efficiency is balanced against capital and other costs when considering the overall project life economics.

Building the BIPS The BIPS is now almost halfway through the construction process, which is employing 200 people throughout the project. Ultimately, the BIPS will deliver more reliable, dispatchable power to the National Electricity Market, and it will be 28 per cent more efficient than the Torrens A Station units it is replacing. “This will deliver gas savings of the same order, reducing costs and lowering emissions,” noted Mr Johnson. It is expected that the plant will be operational in September 2019.

November 2018 ISSUE 4

ELECTRIC VEHICLES

WELCOME TO THE VOLT AGE:

November 2018 ISSUE 4

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ELECTRIC VEHICLES

MANAGING THE

TRANSITION TO ELECTRIC TRANSPORT by Bernadette Cullinane, Australian Oil and Gas Leader and Global LNG Leader; and Steve McGill, Energy Specialist, Deloitte Australia Around the world, a decisive transition is underway – the transition from the age of easy oil and automotive transport in the form of the internal combustion engine, to a renewable energy-driven electrified transport future. Alarmingly, new research suggests that the energy industry is less prepared for the shift to electric vehicles than other industries – in this article, Bernadette Cullinane and Steve McGill outline the steps we need to take to take advantage of the opportunities electric vehicles have to oﬀer.

eloitte has been closely studying and commenting on the transformation of the energy and transport industries for the last few years, and we now describe this as the transition from the ICE (internal combustion engine) age to the volt age – the age of renewable energy, battery storage and electric vehicles. Undeniably, the growth of renewables, battery storage and electric vehicles will have an impact on the oil, gas and LNG industries. This linkage is not well understood yet, but it has the potential to change the game dramatically in many ways – by reducing demand for petroleum products such as petrol and diesel, and by creating new, unforeseen risks for LNG.

The home of LNG consumption – and electric vehicles The volt age may unfold in a large-scale way in Asia, home to 60 per cent of the world’s population, and the demand centre for more than 65 per cent of worldwide LNG demand1. Asia is also the source of supply for more than 85 per cent of battery manufacturing capacity2 and 98 per cent of solar photovoltaic production3. The growth rates and cost reductions associated with these technologies are exponential, and Asia will drive this transition. The transition to the electrified future, and the simultaneous transformation of transport and energy industries, will in turn reshape the global LNG industry. LNG producers cannot afford to wait until they have a large competitor before they act. Action is required now to be ready for the energy transformation that is already underway.

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IGU, 2018

IEA, 2017

NREL, 2018

November 2018 ISSUE 4

ELECTRIC VEHICLES

Electrification is disrupting energy and transport around the world Electric vehicle opportunities and new applications are emerging daily, and are appearing in many different forms – from mines to trucking; and from Southern California to Beijing, electrification of transport is appearing in all sectors. There are many advantages and compounding benefits of electricity – improved automation, less maintenance, increased ability to digitise and significantly less noise – enabling truck deliveries at night, regenerative braking for mine haul trucks carrying loads downhill and lower fuel costs. China is leading the way, with a massive push by the government to clean up air quality and improve the environment, which is driving the development of large-scale manufacturing of renewable energy in the form of solar photovoltaic panels, electric vehicles and lithium-ion battery cells.

Oil and gas companies are not well prepared for the EV disruption To understand the perspectives of oil and gas executives on the topic of electric vehicles, in January to April 2018, Deloitte conducted a survey of 100 industry executives on the impact of electric vehicles on their business. We compared the responses of oil and gas executives to executives from other companies, and found nearly 70 per cent of oil and gas executives expect electric vehicles to disrupt their business, but they: » Are less inclined to view EVs as an opportunity » Are not preparing for this shift as well as executives from other industries reported they are » View the shift as positive, unlike other executives » Believe the impact of EVs will take longer than executives from other industries7

The change is coming and it is coming fast All major auto manufacturers and several technology companies are pushing into electric vehicles. Autonomous electric vehicles, led by tech companies like Google and their self-driving technology development company WAYMO, are already on the road, having driven more than four million miles in the US4. Autonomous vehicles could amplify the impact of electric vehicles. Major auto manufacturers are making big plans for electric vehicles, and are scaling up production rapidly: » Volvo has announced all new models will have an electric option starting next year » By 2021, Hyundai plans to have 31 electric vehicle or fuel cell vehicle models on the road, and Jaguar Land Rover plans to have all models with an electric option » By 2025, Bloomberg New Energy Finance expects electric vehicles and ICE vehicles to be at capital cost parity » By 2025, BMW is expected to have 25 electric vehicles in their line-up, Toyota will be providing a hybrid or battery option for all models, and VW will have 50 electric vehicles available » Looking over the horizon, Volkswagen is expected to have all 300 models with an electric option5 While conventional automobile players are making big plans, many emerging companies, particularly those from China, are moving ahead fast and leading the electrification push: » BYD, already one of the largest battery suppliers in the world, will have a four-fold increase in battery production capacity by 2020 » BAIC, currently the world’s second largest electric vehicle maker, aims to be 100 per cent electric by 2025 » Tesla is challenging the trucking industry, previously thought of to be out of scope for electrification, with its Tesla Semi on tour across the US6

However, our research shows given how fast the disruption is occurring, oil, gas and LNG producers must act now to be ready.

November 2018 ISSUE 4

The transformation has begun and the speed is accelerating There have been significant milestones achieved on the path to transformation of the energy industry including: » The 2015 Paris Climate Accord, which set the global framework for objectives and the imperative to act » Recent cost declines in wind, solar and storage, resulting in a new era of grid-parity and cost competitiveness that has seen renewable energy become the cheapest source of new power generation capacity » Recent shareholder pressure on carbon intensive industries such as mining brought about corporate decarbonisation targets, divestment of carbon intensive assets, and challenges around social license to operate » New reporting standards like the Task Force on ClimateRelated Financial Disclosures (TCFD), which while voluntary, is becoming standard across the resources industry » Increasingly, major conventional energy companies are undertaking transitional activities including market entries into electricity generation and retail and the addition of EV charging to fuel stations These actions are signposts that the road ahead is changing. This is not the first time energy majors have invested in renewable and alternative energies; however, what is different this time around is that renewable energy is now cost-competitive and able to stand up on its own.

The volt age is here Transformation of the energy industry has begun and the time to act is now. To participate fully in the electrified energy future, oil, gas and LNG companies should not ignore the transition to electrification and renewable energy, and should not discount it. With great change comes great opportunity, but oil, gas and LNG companies must prepare for the future by building new business models around integrating LNG, electric transport, renewable energy and battery storage to provide to customers, stakeholders and investors low-carbon and cost-competitive energy solutions.

WAYMO, 2017

Company announcements, Bloomberg NEF 2017

Company announcements, Deloitte research

Deloitte research

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ELECTRIC VEHICLES

ELECTRIC VEHICLES IN AUSTRALIA ï&#x161;»

CHARGING UP THE UTILITIES INDUSTRY by Simon Vardy, Managing Director, Accenture Australia Utilities Strategy Practice

With electric vehicles, utilities have the perfect innovation to help reinvent their business models in a changing energy climate.

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November 2018 ISSUE 4

ELECTRIC VEHICLES

November 2018 ISSUE 4

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ELECTRIC VEHICLES

ith the record earnings announcements of the listed utility companies in Australia recently, it may come as a shock to many that for some years now, utilities have been desperately looking for ways to reinvent themselves. The headwind is facing the sector, and unless utilities find a viable alternative to their traditional revenue streams, they will find themselves fighting with each other and regulators over a static and ever declining revenue base. This is true for all companies across the utilities value chain, from generators, transmission and distribution to retail. Apart from the effects of adverse regulation, highlighted recently by the ACCC, the biggest issue is declining or static electricity demand, and disruption from new entrants and substitutes such as solar and battery power. Utilities need to find a way to “pivot wisely” – that is, transforming their core business, while at the same time scaling up new lines of business that may eventually supersede traditional revenue streams. Critically though, it is also about embarking on this transformation while the old business can still fund it. Perhaps a lot of the answer is about getting back to basics and asking the question, “What will actually grow demand?” Two areas that will significantly increase electricity demand in this country, besides a major upturn in manufacturing activity, are bitcoin mining going viral and electric vehicles (EVs). Bitcoin mining aside, EVs have the promise of offering increased generation load, new high power connections, greater infrastructure utilisation in offpeak times, and new products, services and innovations. So just what is the status of electric vehicles in Australia compared with the rest of the world? Sales have just passed the four million mark globally. Yet in this country, normally a fast technology adopter, we are well underrepresented, with just 2400 electric vehicles sold in 2017. The reasons for this are varied, from lack of choice and high price points, to concerns over distance required before charging. However, attitudes are changing, and there are signs of upswings in demand. Concerns have moved on from “range anxiety” to “infrastructure anxiety”, with owners worried about whether the free charging station at the local shopping centre is available, or if there is a long queue.

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As more vehicle manufacturers announce new models to be released in Australia, there at last appears to be an ever growing supply base covering the spectrum of transport needs (by late 2019 Australia should have at least ten different models available from Nissan, Hyundai, Ford and Tesla). Australia even has a homegrown, globally successful smart charging station manufacturer based in Brisbane – Tritium. One of its products, the ultra fast 350kW charger, offers to finish charging an electric vehicle in under four minutes. EVs are forecast to grow to five per cent of total car sales by 2022, which is when the uptake curve is predicted to really take off. The price parity with our current fossil fuel vehicles will be about 2024-2028, which means the next four to five years will determine which EV service providers (including utilities) will catch the wave and which will be left struggling to catch up. Four to five years may seem like a long time, but it’s well within the normal corporate planning horizon and payback time for most consumer infrastructure investments. So, what should utilities do to encourage electric vehicle take-up in Australia? Accenture suggests there are six categories of intervention: » ‘Coopetition’ between Australian utilities may be helpful. This is the act of collaboration between competing companies in the exploration of knowledge or new market developments. For instance, Samsung Electronics and Sony collaborated in 2004 for the development and manufacturing of flat-screen LCD panels. » Combine other energy offers and bundles to reduce operating costs for a range of energy consumption or lifestyle options, for example, low emissions home and transport. » Highlight the cachet and appeal of electric vehicles – make them the iPod of the 2020s and appeal to higher net worth and early adopter market segments. » Offer innovative financing options to reduce upfront costs and spread the costs over the life of the vehicle (combine with behavioural economics to promote the low running costs). » Join with car and charging station manufacturers to wrap-up bundled offers and link your brand to the outcome, for example, “under ten-minute fast charge in all locations powered by XYZ”. » Finally, lobby governments to adopt similar measures to other high adoption localities like California. This could mean adopting vehicle emission standards, reducing purchase costs like the luxury vehicle tax and fund touring route charging infrastructure. It’s a pernicious problem that faces Australian utilities. Electric vehicles are a definite part of the solution, but should the rate of uptake prove too slow and prolonged, then utilities will have no choice but to explore revenue streams that will be even harder to exploit.

November 2018 ISSUE 4

ELECTRIC VEHICLES

November 2018 ISSUE 4

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ELECTRIC VEHICLES

GETTING THE EV ROLLOUT RIGHT As Australia’s appetite for electric vehicles (EVs) revs up, networks will play a critical role. The commercial rollout of EVs in Australia presents a massive opportunity – not only can it make our grid more eﬃcient, it could deliver cheaper energy for everyone. But the wrong policy direction could be a dangerous roadblock.

nergy Networks Australia is the national peak body representing Australia’s gas distribution and electricity distribution and transmission companies that deliver the electricity EVs will need to power up. Energy Networks Australia Chief Executive Officer Andrew Dillon recently addressed the Senate Select Committee on EVs, which is inquiring into the use and manufacture of the vehicles in Australia. Key messages for the committee included: » Supporting the commercial rollout of EVs will require careful planning to ensure network businesses can continue to deliver reliable, safe and affordable energy supply to all customers, and;

Policy makers must involve network businesses early in the process to help inform policy development, ensure governments can maximise the benefits of increased electric vehicle uptake, and that unintended consequences are avoided.

There are two types of EVs in Australia. The commonly understood version, that is commercially available in Australia, sources electricity from the grid and stores it in a battery. The alternatives are fuel cell electric vehicles that convert hydrogen within the vehicle to electricity, to then power the engine. Hydrogen vehicles are commercially available internationally and will soon be available on the Australian market. Both models have a strategic role in reducing greenhouse gas emissions and are key components of Australia’s transition to a clean energy future.

Changes in the current landscape.

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November 2018 ISSUE 4

ELECTRIC VEHICLES

Impact of poorly orchestrated energy resources (including EVs).

So what does this mean? Inevitably, the uptake of EVs – just like the uptake of solar and battery systems – will put additional pressure on the grid right across the national energy market. Mr Dillon said Energy Networks Australia was collaborating with the Australian Energy Market Operator to develop a coordinated approach to improve the electricity system as it transformed to meet the changing demands placed on the grid. “The Open Energy Networks project is about how to best integrate household solar and storage, as well as electric vehicles, into the grid, so they can work in harmony and help ensure quality and reliability of supply to accommodate two-way power flows,” he said. “The problem lies in that Australia’s networks and their supporting regulatory frameworks were not designed for the significant uptake of EVs, and the consequential demand for charging. “If the integration of electric vehicles into the grid is poorly orchestrated, it could exacerbate demand pressure placed on the grid, as presented above – stopping owners from drawing down and limiting the number of EV connections - or worse, causing system outages. “If done well however, electric vehicles present an opportunity for our nation.

If their rollout is managed with proper network industry consultation and consideration, a number of risks and challenges can be worked through so we can deal with these issues of peak demand charging.” The two most common approaches to refuelling EVs would be through either household refuelling points, or via fast charging infrastructure, similar in function to petrol stations. Both options place different demands on networks, however it is only one aspect of a rapidly evolving power system, which requires increasingly complex orchestration of energy demand versus supply to maintain energy quality and reliability at an affordable price. As shown below, charging creates two immediate challenges relating to demand: the timing of when people will charge their car, and the size of the charger they use. For example, based on the UK experience, electric vehicle charging more than doubled the demand on the electricity network at the peak time of 8pm when people return home and plug in their cars, in addition to using other energy intensive appliances as they cook dinner and put on a load of washing, for example. This doubling of demand has major implications for the design and management of the grid, and if not managed appropriately, could

lead to the system breaching its current capacity during times of peak load. Mr Dillon said without proper management, major investment in infrastructure would be required to meet this short-term demand. “It’s similar to the air conditioning peak demand in Australia on hot days,” he said. “Without a proper management framework, distributors could be forced to make costly investments in infrastructure to ensure reliability and this may push up network charges, leading to higher bills. “Network businesses want to avoid this scenario - never has there been more pressure to reduce power prices with this issue firmly on both the public and political agenda.” Energy Networks Australia has recommended the Committee consider the following measures when seeking to increase electric vehicle uptake: » “Time-of-use” type electricity billing, to encourage charging in off-peak times » Adopting a technology neutral approach to electric vehicles, allowing both battery and fuel cell electric vehicles to compete on their commercial merit » Development of nationally consistent guidelines on how to connect new fast-charging electric and hydrogen refuelling infrastructure, in conjunction with Energy Networks and AEMO » Monitoring systems for networks that allow visibility of electric vehicles connection points and recharging stations. If these issues are properly considered, the rollout of electric vehicles could: » Reduce customers’ electricity bills » Support the cleaner energy transition by increasing the use of renewable generation » Increase overall power supply reliability.

Impact of charging infrastructure on peak demand.

November 2018 ISSUE 4

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â&#x20AC;&#x201D; Rotating synchronous condensers to support stability of the grid

ABB high inertia synchronous condensers support efficient and reliable operation of power grids, balancing voltage fluctuations through reactive power compensation and offering additional short-circuit capacity. Using competitive standardized 65-75 MVA modules, ABB can tailor complete systems up to 350 MVA, including hybrid solutions with other compensation equipment. new.abb.com/motors-generators/synchronous-condensers

EQUIPMENT ENERGY PARTNER CONTENT

THE AUSSIE INVENTION

TRANSFORMING WORKSITE SAFETY

An Australian business has revolutionised the way that machinery owners and operators manage the process of ensuring equipment is safe to use.

anaging the potential risks associated with using plant and equipment is extremely important, because the wellbeing of every operator, workmate and visitor on a worksite depends on it. It also ensures business continuity which is important for owners, shareholders and suppliers. What started as a SQL database with an Access front end used to identify faults and compile risk assessments on plant and equipment being auctioned in Wagga Wagga, NSW, has now grown to become the world’s largest plant and equipment safety platform. This cloud-based platform was a world first when launched in 2004 and has evolved to become the leading product of its type, now holding detailed safety and compliance data for more than 105,000 makes and models of plant and equipment. Massive uptake in utilities sector Plant Assessor is used by over 2000 businesses including machinery owners, hire companies, importers, distributors, dealers, local councils and auctioneers. The energy industry has recently increased its adoption of technology at an exponential rate. It is also one of the largest users of machinery, with a large proportion of this machinery hired or provided by subcontractors and other third parties.

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When it comes to major projects, the energy sector is also home to some of the most intense and demanding safety systems of any industry. Plant Assessor delivers transparency around machine hours and condition, safety information, service status, pre-start history and more. It also allows easy sharing of this information with others which considerably reduces compliance cost whilst improving the quality of the information available. Plant Assessor has seen a massive uptake by contractors across all tiers of the sector including larger subcontractors and sole traders. Major providers and contractors to the sector, including Origin Energy, Zinfra, Suez, ACTEW, Lend Lease, John Holland, BMD, Downer Group, BGC, Watpac and Fulton Hogan, are all using Plant Assessor.

Why it’s so widely used Plant Assessor has proven to be extremely popular because it has set the benchmark for managing plant and machinery safety, whilst making it simpler and easier to manage. The machinery database is enormous, the software features useful, and the user interface is clean and simple so people find it extremely easy to use. Plant Assessor is constantly updated with new machines, specifications, legislative and other requirements, so you are always up to date.

Making contractor management easier Over the past few years, Plant Assessor has focused on making it easier for organisations to manage contractors, whilst also saving contractors time and money on compliance and fleet management. This is done by sharing plant and other records between contractors and principals using sophisticated but easy-to-use site and subcontractor management functions. Combine this with a low-cost “pay as you go” membership, and it is now practical and cost-effective for contractors of any size to invite their subcontractors to set up a Plant Assessor membership and add and share their machines and information. The contractor benefits in a variety of ways, including free digital pre-starts for all their machines and operators, built in maintenance scheduling and record keeping, and a reduction in admin time in providing compliance information to clients. The principal contractor benefits as the collection and review of compliance and other information is simpler and easier, and the principal contractor is quickly and simply able to make sure that every contractor has immediate and continuous access to the critical policy, procedure and site information. If you’d like to know more about how Plant Assessor can help you manage machinery safety in your business, contact Plant Assessor on 1300 728 852 or visit www.assessor.com.au. www.energymagazine.com.au

MOBILITY

November 2018 ISSUE 4

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MOBILITY

THE MOBILE BATTERY In Germany, the worldâ&#x20AC;&#x2122;s first vehicle-to-grid technology has been unveiled, essentially creating a mobile battery than can move around and inject energy back into the grid where it is required. We take a closer look at the technology, released in October, and look at the potential implications for the energy market.

n important milestone on the road to emission-free energy and mobility has been achieved in Hagen, Germany, with a team of engineers successfully qualifying an electric vehicle against regulatory requirements for primary power regulation. This is the first time an electric car has been officially approved as a power plant for the German energy market in a vehicle-to-grid (V2G) scenario â&#x20AC;&#x201C; the most sophisticated means of grid stabilisation. This is a major breakthrough in the establishment of a new form of energy storage and transmission in Germany, and perhaps even around the world. The breakthrough has come courtesy of technology company The Mobility House (TMH), energy supplier ENERVIE, transmission system operator Amprion and car maker Nissan. With the Nissan Leaf, and an innovative charging and energy management technology, the car can be integrated as a regulating reserve for the German electricity grid. Developing a mobile solution To meet the desire for a transition to decentralised energy generation from renewable sources in Germany, new and innovative solutions for stabilising the electricity grid are necessary. The increasing use of renewable energy leads to fluctuations in the grid, which must be initially balanced by primary regulation, able to prevent impending power cuts at a second's notice. Electric cars such as the Nissan Leaf, with integrated bidirectional charging technology, could play an important part in this. With its CHAdeMO charging connector, the Leaf is able not only to extract power from the grid and store it in its traction battery, but, if necessary, also to feed power back. The bidirectional chargeability of Nissan's electric car is the foundation for its integration in the pilot project at the ENERVIE site in Hagen, Germany. In combination with innovative, intelligent charging and energy management technology from TMH, the charging and discharging processes can be controlled and monitored. "We are pleased that Mobility House technology has been approved for the most challenging and important product of the German power supply system," said Thomas Raffeiner, CEO and founder of The Mobility House (TMH). "We strongly believe in an emission-free future," says Guillaume Pelletreau, Vice President and Managing Director, Nissan Center Europe. "Accordingly, we are also very proud that the Nissan Leaf has, as the first electric car ever, been approved as suitable for stabilising grid frequencies. Leaf batteries could make an important contribution to energy transition in Germany and a sustainable future."

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November 2018 ISSUE 4

MOBILITY

November 2018 ISSUE 4

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MOBILITY

As one of four Transmission System Operators (TSOs) responsible for the transmission of power in Germany, and thus charged with the stability of the power grid, Amprion is a supporter of the ambitious V2G project. The TSO has defined the technical and regulatory requirements for prequalifying a mobile battery storage unit for the market for primary regulation; and Amprion has now approved the Nissan Leaf, in combination with the control system from The Mobility House, as suitable for this function. "We are proud to be the first in Germany to prequalify an electric car for primary regulation," said Andreas Walczuch, Head of System Services and Energy Market at Amprion. "This innovation shows us that electric cars may have a part to play in securing system stability." Erik Höhne, Executive Spokesman of ENERVIE Group in Hagen, said: "By providing the infrastructure for the project on site, ENERVIE has extended its commitment to e-mobility as an innovative partner for industry, commerce and the people in the region by a further facet.”

Sustainable energy using V2G Thanks to electric mobility, cars can become an active element of the power grid. This is a clever and cost-effective way to integrate renewable energy such as solar and wind power into the grid, and to smooth out peak loads. On average, private cars sit idle for 23 hours a day, barely driving more than 40km. For these reasons, battery-powered cars are ideal for use as electricity caches. To accomplish this, electric cars need to operate using V2G technology: in other words, they need to be able to both take in and give off electricity. This new future for the energy world might seem a long way off, since appropriate vehicles and products are not yet widely available. But TMH in Munich is taking the first steps by conducting pilot projects, many of which have proven that V2G offers economic and practical advantages to everyone involved: energy providers benefit because they can sell more renewable energy; network operators benefit because they are spared expensive network expansions; and end customers benefit because they can earn money with their electric cars while they are parked. In another unique benefit, car owners don’t need to worry about the batteries of their electric cars wearing down prematurely due to their side job as temporary power caches. In fact, quite the opposite is the case: the research of TMH in collaboration with the Technical University of Munich has indicated that this uniform load distribution acts like a kind of battery massage, keeping the usable life of a battery stable and even extending it in particular circumstances. Since 2012, TMH has been testing the technologies that will make V2G fit for everyday use. At first, the focus was on optimising the charging process for electric cars and benefiting from price fluctuations on the electricity market. In a pilot project with Renault, TMH developed smart charging software that takes energy from the grid when it is cheaper, based on the driver’s needs. On average, charging costs can be reduced ten to 15 percent. Today, this smart charging process is a core component of the charging and energy software offered by TMH. The next step was to find another way to get the power out of the car battery so it can be used in households. In 2015, TMH successfully integrated a Nissan electric car into the building’s power grid at the company headquarters in Munich for the first time

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and used this car to supply power to the office. Since then, a whole lot of espressos have been powered directly by the electric car in the parking garage. A similar project is currently underway at the research centre of the car manufacturer Honda in Offenbach, where TMH is testing bidirectional charging. Here, a system consisting of a V2G-enabled charging station, an electric vehicle and the building’s power load is used to optimise energy consumption. This project aims to increase personal use of solar power and reduce energy costs. One of the most exciting V2G projects is currently being conducted on the island of Porto Santo in the Portuguese archipelago of Madeira. In the middle of the Atlantic, where diesel generators were used in the past to produce the required electricity, the aim is to create a mostly self-sufficient and sustainable energy system consisting of wind turbines, photovoltaic cells, stationary storage and electric cars. The first 22 Renault electric cars, two of which are V2G-enabled, are already operational, helping to make the power grid of this island with 5000 inhabitants independent from the costly supply of diesel. In another project conducted in Germany with the network operator Tennet and Nissan, electric car batteries are used to optimally feed renewable energy into the grid and to ensure that renewable energy is not deactivated due to network congestion problems between energy-rich northern Germany and the electricity-hungry south. Power demand is very high in the morning and evening, particularly in southern Germany. The construction of a north-south line is under consideration to balance out these peak loads and bring wind power, which is abundant in the north, down to the south. Another TMH project is currently investigating whether it makes more sense to rely on electric cars as power caches instead of building costly new lines. During hours with a lower electricity demand, for example at night and in the early afternoon, these vehicles in the south could easily take in lots of wind power from the north and store it temporarily without burdening the existing lines to their limits. During peak load times in the morning, at around noon and in the evening, the electricity in their batteries would be used to cover the high demand directly where it is needed. This would require thousands of electric cars with suitable charging stations, but given the continually increasing numbers, it is only a matter of time before this proposal could become a reality. Out of all of TMH’s projects, the most technologically demanding application on the energy market is the project in Hagen where the Nissan Leaf is being used to stabilise primary control power in Germany for the first time ever: this is the ultimate challenge in grid network stabilisation. It requires reliably balancing power fluctuations in real time within a matter of seconds. In the past, this task has mostly been accomplished by gas turbine power plants or pumped-storage power plants. What sets this project apart is that electric cars can be used to earn cash through primary control power: network operators can bring in hundreds of millions in revenue every year from network stabilisation. Customers should be excited: if electric cars are available for the same price as comparable petrol or diesel models in a few years, it may one day be possible to make money using a car as a power cache. Driving cars could potentially be about to become a whole lot cheaper – not to mention more environmentally friendly.

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MOBILITY ENERGY PARTNER CONTENT In the field, a truly rugged, enterprisegrade mobile computer is the only option for the energy sector’s harsher environments and enterprise applications.

WHAT A CONSUMERGRADE

MOBILITY

STRATEGY

REALLY COSTS

obile computers can be a game changer for field service organisations looking to employ better, smarter, more efficient business processes. When they work. Truth be told, devices fail more often than many technology manufacturers (and their customers) will admit. Especially consumer-grade devices that, while marketed for business applications, were never designed for the energy sector’s harsher environments or enterprise applications. At the same time, it can be easy to overestimate the performance capabilities of a well-known mobile computer brand or miscalculate the data security – or worker safety – risks posed by cost-efficient consumer grade tablets, laptops and handhelds. This is especially true when budgets are tight and sticker prices seem just right. No executive is going to fault decision makers who choose to favour a low-cost device that seems to check all the boxes. Until the solution fails to meet performance, security and/or safety expectations. Then the total cost of ownership (TCO) skyrockets and those savings turn into losses very quickly. The financial implications of even a single failing mobile device far surpass any benefit you may receive from securing a lower sticker price or forgoing the extended warranty option. Just ask these two multi-billion-dollar companies: Enterprise A This multinational organisation is known for its customer service excellence. It consistently ranks at the top of consumer surveys and has prioritised workforce mobility over the past decade. As a technology innovator, this company decided to leverage the advantages of Android mobility within many installation and maintenance divisions, and opted to deploy Motorola Droid Xyboard tablets to 13,000 of its field-based workers – even though they expected and planned for a 14 per cent device failure rate at the time of purchase. Unfortunately, the actual failure rate was 25 per cent in the second year, and between 35-50 per cent for most divisions in the third year. Clearly, the 1820 spare Xyboard units they budgeted for were not enough to replace the actual number of devices that went offline. The average $50 cost to repair each fixable device was

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just the beginning of the total costs (i.e. losses) incurred while the tablets and, therefore, workers were offline. Technicians were unable to provide full-service support to customers in a timely manner, logistics became challenging to manage, and workers at this forward-looking company had to revert to paper-based business processes of the past until devices were replaced or repaired. The company quickly started replacing these devices with rugged Android tablets that have proven far more reliable over a much longer period of time.

Enterprise B This globally-known brand has hundreds of thousands of mobile workers deployed in the field every day for the installation and management of its infrastructure and services. They understand the need for rugged mobile computers and have invested in them heavily over the last decade. However, pressure to accommodate the technology expectations of a younger workforce led this organisation to purchase 80,000 iPhones and 100,000 iPads along with cases they hoped would replicate the level of protection offered by inherently rugged mobile computers. In 2017, 22,000 of their 180,000 installed Apple mobile devices failed. In just one year, 12 per cent of their workforce was taken offline for some period of time. Unable to operate at peak performance, field technicians were forced to improvise as best as possible to fulfill their daily obligations, and large volumes of customers ultimately suffered due to the service delays or limited service capabilities that occurred during the devices’ downtime. This company, too, decided that it was too disruptive to utilise a disruptive mobility model and quickly standardised multiple divisions on rugged tablet computers (for a much lower TCO). Success is built on failure Both companies were forced to re-evaluate the tangible versus intangible costs of mobility, as well as the value they put on the uptime of their workers long-term versus the value of a lower sticker price right now. Their initial justification to use a non-rugged, off-the-shelf tablet versus a truly rugged, enterprise-grade mobile computer was quickly invalidated. It became clear that the perceived savings and simplicity of consumer-grade devices were misperceptions. www.energymagazine.com.au

MAKE THE SMART RUGGED CHOICE Power Your Energy Business with Field-Proven, HazLoc-Certified Mobility Solutions

Xplore’s powerful mobile devices are engineered from the inside out to survive common environmental hazards, especially the hostile field conditions of the energy sector. Whether repairing power lines, installing rooftop solar panels, monitoring plant performance, or maintaining remote wind turbines, Xplore’s mobile computers will stay by your workers’ sides to help them effectively plan their day and power through mandatory logistical and compliance tasks without error – even in the harshest weather and most Hazardous Locations.

Built for Rugged Extremes

Power of Intel® Core

Real-time Data Communications

Outdoor Viewability

C1D2 / ATEX Protection

Peripheral Connectivity

OS Application Flexibility

Learn more about the benefits you will gain by deploying Xplore’s rugged mobility solutions across your energy operation.

www.xploretech.com/energy

CUSTOMER FOCUS

THE CONSUMER

DATA RIGHT:

November 2018 ISSUE 4

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CUSTOMER FOCUS

WHAT DOES

IT MEAN FOR

THE ENERGY SECTOR? by Oliver Williams, Policy Adviser, Australian Energy Council

The consumer data right is coming. The implementation for the banking sector is fast approaching and energy will be next. So what opportunities and challenges does this present for the energy industry?

Data relating to customer usage patterns could be analysed to offer customers better deals and products to help them manage their energy usage.

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November 2018 ISSUE 4

CUSTOMER FOCUS

he Federal Government recently asked the Productivity Commission to look into the benefits and costs of making public and private datasets more readily available, as well as the ways consumers can benefit from access to data, particularly about themselves. In 2017, the Productivity Commission delivered its mammoth 600-page report that recommended a consumer data right (CDR) be rolled out across the economy1. It envisaged a staged approach with different sectors designated incrementally: first is banking, followed by energy, then telcos. These sectors will get tailored regulation that aims to empower consumers to direct their data to competitors or third parties to support competition and consumer choices and purchases. For electricity providers this is likely to be supported and accelerated by the installation of smart meters. The Australian Competition and Consumer Commission (ACCC) will regulate the CDR once itâ&#x20AC;&#x2122;s up and running. The four big banks will have to comply with the first stage of the CDR by 1 July 20192.

What is it? The CDR is all about competition. It is based on the idea of putting data collected by companies about their customers back into the hands of those consumers to drive competition between suppliers. Every day we are creating data and companies are storing more and more of it. If companies find value in the data we create, it logically follows that consumers can find value in the data too â&#x20AC;&#x201C; thatâ&#x20AC;&#x2122;s the concept behind the CDR. Anyone who has applied to refinance their home loan or switch over their credit card knows it can be a time-consuming process. The CDR will make this process faster, easier and more accurate. In the first stage, the CDR will allow you to authorise your banking information (spending, deposit and credit account information) to be pushed off to a competitor. That bank can then analyse that information and offer you products based on your actual banking information very quickly.

The consumer data right is about empowering customers to make better purchasing decisions.

https://www.pc.gov.au/inquiries/completed/data-access#report https://www.accc.gov.au/focus-areas/consumer-data-right

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CUSTOMER FOCUS

At a later stage, with a more mature CDR, we can imagine not just sending our data to get a quote, but being able to do the whole switching process for all our banking, energy and phone contracts with a few taps on our phone. The CDR network will fill in all the forms for you, all you have to do is grant permission. In markets where customers who aren’t engaged and often suffer “loyalty fees”, the CDR could have a huge effect on competition. The ACCC in its recent consultation paper3 breaks down how the CDR will work in practice: 1. The consumer will engage with an accredited data recipient. This could be a competitor, it could be a comparator website or it could be a totally different market that is accredited by the ACCC to receive that particular type of data. 2. The accredited data recipient asks the data holder for the relevant data. At this stage the data holder will check the credentials of the data recipient. 3. The data holder confirms the identity of the consumer who made the initial request. 4. The consumer authorises the data holder to give the data to the accredited data recipient. 5. Finally, the data is shared to the accredited data recipient for a specified purpose and a specified time (maximum 90 days). In practice, all of this will happen in the background, individuals will simply go online and access a CDR dashboard, they can then give the relevant authorisation and the network will take care of the rest. It will happen instantly and you could be provided with a tailored quote, service or product at the click of a button.

What data is being shared? A designation instrument will specify what forms of data are to be considered CDR data. The technical standards are still being developed and they will differ between industries. Once certain data sets are designated, data holders in a marketplace will have an obligation to provide that data set to accredited data recipients. An accreditation system will be established in each industry to determine who can validly receive designated data. While this scheme is young, it’s likely the accredited data recipients will be competitors or other businesses with closely related products. As the scheme matures, businesses with an indirect connection with the data might find ways of offering new products or services to consumers who choose to share their data with them. There will be enormous opportunities for entrepreneurs who find innovative ways to use data that can be released through the CDR. CDR and smart meters On the energy front, the amount of data being collected and stored about household and business electricity use is growing exponentially as smart meters are rolled out. As well as more information about our electricity usage, these meters enable new services such as remote meter reading, remote access to appliances and different pricing options. If you’ve got a smart meter, you can already go online and download data from your meter. What you can do with this data though is quite limited and clunky. With the CDR, specified data sets will be organised and updated continuously. These data sets will then be available to you at any time to release to an accredited data recipient. Initially these recipients might just be other electricity retailers, over time though, other businesses and industries might become accredited to receive your smart meter data and integrate services and technologies in ways that we’ve never seen before.

3 4

How does it work? Data Holder

Consumer

Accredited Data Recipient Source: ACCC

Retailers might be able to offer you special products that match your spending habits based on your credit card with your billing cycles to help you manage your finances. The CDR will set up the network so that these types of interactions can happen in the background. You will grant permission to access your data for a specified purpose and time, and you’ll be able to manage your permissions through an online dashboard.

Risks To really unlock the benefits of the CDR, it will be critical that security and privacy are front and centre as this data becomes more readily available in the marketplace. The Office of the Australian Information Commissioner will play an important enforcement role, along with the ACCC. The CDR will also have its own set of privacy safeguards which are likely to be above current requirements under the Privacy Act 1988 (Cth). Ensuring that consumers know that when they engage with a CDR dashboard their data is secure and only being used for a specified purpose will be critical to the success of the scheme and its uptake. Where to next? The CDR framework is being developed with three processes running in parallel. The Commonwealth Treasury department is developing the overarching policy and the enabling legislation. CSIRO’s Data61 team is developing the technical standards for the scheme (these will determine the technicalities of how the data will be collected, stored and shared). The ACCC will play the lead regulator role, in charge of enforcement, and is developing the rules framework with the Office of the Information Commissioner as sub-regulator. Due to this parallel process there are still lots of unanswered questions, but the CDR is rapidly taking shape and the energy industry is starting to prepare. Putting consumers in control of their own data is a timely reform, as more of our everyday lives are recorded in the cloud via an array of smart devices. AEMO’s CEO Audrey Zibelman has heralded the energy sector’s transition to a “fourth industrial revolution”4 as everyday technology becomes increasingly connected. We are likely to see new innovation and opportunities as well as risks. The CDR will be a powerful tool for both businesses and consumers as we move into Industry 4.0.

https://www.accc.gov.au/focus-areas/consumer-data-right/accc-consultation-on-rules-framework http://energylive.aemo.com.au/News/Audrey-Zibelman-presenting-at-Paris-conference

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November 2018 ISSUE 4

CUSTOMER FOCUS

IT STARTS WITH CULTURE:

REBUILDING CONFIDENCE IN THE ENERGY MARKET by Rosemary Sinclair, Chief Executive Oï¬&#x192;cer, Energy Consumers Australia

November 2018 ISSUE 4

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CUSTOMER FOCUS

After twelve months where energy prices have dominated news headlines, customer trust in the energy sector is lagging. According to Rosemary Sinclair, in order to win back that trust, the industry needs to look deep within itself and solve the cultural issues that have led to distrust.

onsumer confidence and satisfaction with value for money for electricity is at rock bottom – only 44 per cent of us believe we get good value, well below other services like banking (74 per cent) and insurance (62 per cent). Perhaps more significantly, only 24 per cent of consumers say they have confidence the electricity market is working in their interests. There are real budget issues here for households and small businesses – electricity is a big cost for most people who want comfortable homes, competitive businesses and bills that don’t make them so anxious that they put off opening them. But they also want to know that they can pay their bills without feeling like they’re being ripped off – they want to feel like they are getting good value. At the heart of fixing these issues and restoring confidence is culture. The banking regulator APRA recently released a sobering report into conduct at the Commonwealth Bank. It found a culture problem at the heart of the bank’s decision making, a worrying disconnect with its customers, a widespread sense of complacency and a lack of accountability to customers. The bank’s Board accepted all the recommendations of the report. The Royal Commission is now adding to the picture of a sector that is out of touch with the basic needs of its customers. What’s happening in banking is causing many people to reflect on the question of culture within the corporate sector. What is clear is that an essential service like energy cannot operate in a culture that does not meet community expectations. Energy companies with a culture which in the past has said it’s ok to pass through double digit price rises are not meeting the community’s expectations. Energy companies which do not find the smartest, cheapest way to build and run networks are not meeting community expectations. Rebuilding trust with consumers will take time and must come from the top. We’re hearing positive things at the moment and there seems to be a willingness to change the culture of the industry – the newly formed Energy Charter being developed by energy company CEOs is a sign of that. The Charter is led by 15 CEOs from across the gas and electricity supply chains who have committed to progress the culture and solutions required to deliver energy in line with community expectations. The first big test of culture will be whether CEOs and boards listen to consumers who are insisting that prices come down. Consumers know they’re simply paying too much for energy – it just doesn’t pass the pub test that prices would almost double over a decade, explained by the unique issues of the time, but then would not return to more normal levels. Consumers expect to see prices and bills significantly lower in the coming one, two and five years – they no longer accept small price reductions, or flat prices, as an acceptable outcome.

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There are green shoots that point to things shifting: retailers announced price reductions for the first time in recent memory at the end of the 2017-18 financial year – they were modest reductions, but a step in the right direction. We saw network prices starting to come down and perhaps even more encouraging is the range of new, more proactive approaches to consumer engagement by energy networks this year. The leadership of all energy companies have a choice: they can ignore consumers’ expectations and end up having change forced on them by governments and regulators; or they can meet expectations and recognise it is consumers parting with their hardearned dollars that power their businesses and the energy sector. Price is one side of the equation and it needs to be underlined – prices must come down – but a critical longer-term culture piece is helping consumers manage their energy use. This requires much more (and better) engagement with consumers by retailers. Households and small businesses are already doing the heavy lifting to use less electricity and get control of their bills. The vast majority of households and small businesses have moved to more energy efficient appliances and ever-increasing numbers of consumers have either already moved to solar panels or are looking to do so. There is also considerable interest in new home energy management solutions, with over five per cent of people already purchasing a system, and a further 20 per cent looking to do so. And while it’s early days in the household battery market’s slide down the cost curve, battery storage interest is high, with more than 30 per cent considering procuring that technology. These efforts are about consumers reaching for control over their costs – they have little confidence the market can deliver, so they are taking matters into their own hands where they can. The problem is that they tell us they’ve already done everything they know how to do. And they are actually losing confidence in their ability to do more, and in the tools available to help them do so. Our last Energy Consumer Sentiment Survey found that only 58 per cent of households are confident in their ability to manage their use (down 11 per cent), while only half of consumers say they have enough easily understood information available to help them make good decisions about their energy supply (50 per cent, down seven per cent) or the right tools (46 per cent, down seven per cent). Energy companies need to do more to put the power into consumer hands, to understand where they can save money on the energy they use in their home and in their businesses. It starts with a cultural shift – tackling the energy affordability crisis requires energy companies to work more proactively for their customers on both sides of the ledger – to empower consumers with individualised options, services, tools and information, to help them get control of their energy use and costs; and to get prices down.

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CUSTOMER FOCUS

WILL THE ENERGY CHARTER

HELP REGAIN CONSUMER TRUST? Established in February 2018, The Energy Charter is a whole of energy sector initiative established to progress the culture and solutions required to deliver a more aďŹ&#x20AC;ordable, reliable and sustainable energy system for all Australians. In a climate where trust in the energy industry has never been lower, the Energy Charter could just be the solution the industry so desperately needs to turn its reputation around.

nsuring that the community has confidence in energy businesses is critical to making sure that Australia has the energy system it needs for the future. This requires the collective efforts of government, regulators and the energy industry, and the energy industry acknowledges the significant role it must play. As a result, early in 2018, 15 CEOs from across the gas and electricity supply chains committed to developing a consumer charter to progress the culture and solutions required to deliver energy in line with community expectations. The Energy Charter will be a principles-based disclosure regime that can be applied to all businesses across the gas and electricity supply chains. Those who commit to The Energy Charter will agree to publicly identify how they are delivering against the Charter Principles and providing positive outcomes for customers. It is critical that energy businesses are transparent and

November 2018 ISSUE 4

accountable for their statements. An independent accountability panel is proposed to review disclosures and produce an annual evaluation report on them. The 15 businesses that have so far signed on to be a part of The Energy Charter are AGL, APA Group, Aurora Energy, AusNet Services, Australian Gas Infrastructure Group, CS Energy, Energy Queensland Limited including Ergon Energy Network, Energex, Yurika and Ergon Energy Retail, EnergyAustralia, Essential Energy, Jemena, Meridian Energy Australia & Powershop Australia, Origin Energy, Powerlink Queensland, Stanwell and TransGrid. As the foundation supporters of The Energy Charter, these businesses recognise the important role they play in providing energy; and they commit to placing customers foremost within their businesses so that customers can feel confident about their choices and that the energy sector is working in their interests.

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Figure 1. The five guiding principles of The Energy Charter.

How will it work? The Energy Charter is focused on embedding customercentric culture and conduct in energy businesses to create real improvements in price and service delivery, through commitment to five key principles: 1. We will put customers at the centre of our business and the energy system 2. We will improve energy affordability for customers 3. We will provide energy reliably, safely and sustainably 4. We will improve the customer experience 5. We will support customers in vulnerable circumstances These principles are also highlighted in Figure 1. To ensure The Energy Charter has the right focus on the customer, the participating businesses partnered with Energy Consumers Australia to play a role in the development of the charter and the accountability framework. This national consumer advocate is providing guidance based on customer and community consumer expectations of the initiative. Jemena’s General Manager of Corporate Aﬀairs, Ian Israelsohn, says consumer trust in the energy industry is at an all time low, and he and Jemena believe The Energy Charter will play a key role to start rebuilding that trust.

Energy Consumers Australia CEO, Rosemary Sinclair said, “Rebuilding trust with consumers who have faced significant affordability challenges in recent years will take time and must come from the top. There appears to be a new willingness to change the culture of the industry and The Energy Charter is an important and positive sign of that. “Leadership and a commitment from industry to lower bills, to clear up choices and to make the most of opportunities in a transforming system is the starting place for rebuilding consumer trust and confidence in the energy market.” In September 2018, feedback on the five guiding principles, and other elements of the charter, were sought with the release of The Energy Charter Draft for Consultation. The project team behind the development of the charter is currently working through the feedback provided through formal submissions and a number of engagement forums, with a view to releasing the final Energy Charter in December 2018. Adoption of The Energy Charter is voluntary, but all energy businesses are encouraged to join, regardless of where they fit in the supply chain. Commitment to The Energy Charter will be managed under the Governance arrangements now being developed. Expressions of Interest from energy businesses wishing to commit to The Energy Charter from 1 January 2019 are now invited. Commitment will involve: » A letter of commitment to The Energy Charter and its Principles » Agreement to resource administrative arrangements and accountability process For more information about The Energy Charter, or to discuss how you can get involved, please contact Project Director, Emma Watts at emma.watts@theenergycharter.com.au.

customer outcomes by driving collaboration across the energy sector,” Mr Israelsohn said.

Jemena is one of 15 energy businesses whose CEOs have committed to The Energy Charter.

“The Charter will do this by outlining a series of high-level principles that signatories will apply across their businesses to put customers and customer outcomes at the core of their business.

Mr Israelsohn has nearly 30 years’ experience in the energy industry across a number of countries, and believes he has never seen consumer trust as low as it is today.

“Those companies who commit to The Energy Charter will agree to publicly report on how they are delivering against these principles and providing positive outcomes for customers.

“We are seeing increased consumer complaints, escalating disputes, negative media coverage, and a range of uncoordinated policy activity and inactivity by diﬀerent governments,” Mr Israelsohn said.

This will be evaluated by an independent accountability panel, and an annual report that will be made available to the public. If signatories do not implement measures consistent with the principles, they will explain why under an “if not, why not” regime.

“All of this uncertainty further erodes consumer trust and the social license of our sector. It also makes our lenders and shareholders uncertain, increasing our financing costs and feeding back into higher prices, which makes the situation even worse.

“This is a significant step forward for the industry, and I am proud that Jemena has seen fit to be one of the foundation members leading on putting customers at the heart of our business and the energy system,” Mr Israelsohn said.

“In short: no one is happy. And without leadership there is no end in sight.”

“But this will not be easy, and there are fundamental changes that will need to occur.

The 2018 Edelman Trust Barometer report for Australia reported that the energy industry is the least trusted out of the 15 industries reported. It has both the lowest proportion of people who trust the industry (39 per cent), and the biggest fall in proportion since 2017 (-11 per cent).

“To the businesses that are already involved in The Energy Charter: dig deep. We have an opportunity to show our customers that we take this seriously, and the stakes have never been higher.

“Into this environment slides The Energy Charter. The Energy Charter is an industry initiative that aims to deliver improved

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“To those businesses that are not (yet) involved: I encourage you to find out more about The Energy Charter and what it is going to mean for you.”

November 2018 ISSUE 4

BIOFUELS

AUSTRALIA'S

FORGOTTEN

FUEL SOURCE by Shahana McKenzie, CEO, Bioenergy Australia

As we all seek contribution from energy sources that are cleaner and environmentally friendly, Bioenergy Australia CEO Shahana McKenzie argues we need to spend more time considering the contribution biofuels – energy sources derived from what would otherwise be waste products – can make.

The majority of ethanol produced in Australia is produced as a byproduct of sugar production.

November 2018 ISSUE 4

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BIOFUELS

n taking on the role of CEO for Bioenergy Australia, I was both shocked and amazed by a number of harsh realities surrounding Australia’s fuel situation. Like many, I had been exposed to the propaganda surrounding the anti-biofuels campaign, and wanted to read and consult as much as possible to ensure I understood the situation both domestically and internationally before I threw my energy, passion and enthusiasm behind the industry. Some of the incredible things I learnt in going through this process were: » There are 40 per cent more deaths from transport related pollution than the national road toll1 » Australia has some of the dirtiest fuel of the OECD Nations2 » Transport emissions have risen by 22 per cent since 20053 » Australia lags about 15 years behind in an international context In addition, a 2018 report from the Parliamentary Joint Committee on Intelligence and Security (PJCIS) has revealed Australia now has the lowest fuel reserves in the world. Overall, the country has just 49.6 days of net coverage (and only 20 days for aviation), well below the 90 days supply Australia and other nations have agreed to under the International Energy Agency.

What most people don’t seem to understand is the significant role that biofuels can play in solving so many of these significant challenges. A biofuel industry will help diversify supply and secure domestic production of transport fuels, as well as provide new manufacturing jobs, investment in rural and regional areas, diversification and additional income for farmers, and new export opportunities. For those of you that aren’t aware, biofuels in Australia are produced from waste streams or as by-products. The ethanol produced in Australia is predominantly produced as a by-product from sugar or gluten production, and the biodiesel is produced from used cooking oil and tallow. Advancements in technology are now seeing biofuels produced from a range of other waste streams such as algae, municipal solid waste, sewage, sawmill waste and agriculture waste. In the not too distant future, we could be fuelling our cars from fuel derived from waste that was going to landfill. Biofuels are a real opportunity for Australia. As an example, increasing the use of biofuels by a small ten per cent in petrol and diesel in Australia could reduce total greenhouse gas emissions by 8.9 million tonnes of carbon dioxide equivalent per year, with huge subsequent health benefits. A study by QUT identified that the growth of biorefinery industries in Queensland alone could result in an increase to the Gross State Product of more than $1.8 billion per year, and the creation of around 6640 jobs, most of which would be in regional communities.

https://energy.unimelb.edu.au/news-and-events/news/vehicle-emissions-cause-40-more-deaths-than-road-toll https://www.crikey.com.au/2018/05/24/clean-fuel-in-australia-still-just-a-load-of-hot-air/ 3 https://www.environment.gov.au/system/files/resources/9437fe27-64f4-4d16-b3f1-4e03c2f7b0d7/files/aust-emissions-projections-2016.pdf 1

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November 2018 ISSUE 4

BIOFUELS

The momentum for sustainable aviation fuels is now unstoppable.

In addition to the above, there are some significant international drivers that are escalating an interest in biofuels and renewable fuels being produced in Australia. As part of the global decarbonisation process, the international aviation industry has committed to reducing its greenhouse gas emissions. In 2009 the International Air Transport Association (IATA) set the following ambitious targets: » A 1.5 per cent annual fuel efficiency improvement between 2010 and 2020 » Carbon neutral growth from 2020 » A 50 per cent reduction in net emissions by 2050 compared to 2005 levels The momentum for sustainable aviation fuels (SAFs) is now unstoppable. From one flight in 2008, the threshold of 100,000 flights was passed in 2017. A number of airlines, including Cathay Pacific, FedEx Express, JetBlue, Lufthansa, Qantas and United have all made significant investments by forward-purchasing 1.5 billion gallons of SAF. Airports in Oslo, Stockholm, Brisbane and Los Angeles are already mixing SAF with the general fuel supply. Towards the achievement of the IATA targets, research conducted by the University of Sheffield has found that a 50:50 blend of jet A-1 and aviation biofuel has a 60 per cent reduction in air pollution (particulate matter), improving local air quality. That said, emissions reduction is not the only reason why many airlines

are pursuing the use of aviation biofuel. Data from Qantas’ biofuel flights in 2012 showed that biofuel improves fuel efficiency by 1-2 per cent, and this is a consistent finding from over 2000 biofuel flights conducted around the world. In August this year, Brisbane Airport became the first Australian airport to include biofuels running through the system and fuelling planes. This pilot project was initiated by Virgin Australia, and Bioenergy Australia is delighted to see Australian airlines taking a lead role in developing the local industry. In addition, technology in this space is advancing at a rapid pace. We have seen some exciting announcements over the last few months, including ARENA funding to support the development of sewage waste being converted into biocrude, and sawmill residue being converted into renewable diesel. Many in the industry might be scratching their heads, wondering why we aren’t capitalising on this opportunity? We have regional towns struggling and closing, we have oil refineries shutting up shop, we have reports being released on the health impacts of our fuel and we have some serious emissions targets to meet. I think there are a raft of reasons as to why we haven’t taken advantage of the opportunity. Politically, there has been no policy framework to support decarbonisation of the transport sector. Secondly, in order for biofuels to run through Australia’s fuel network, it requires the support of the incumbent oil industry. Thirdly, there have been some false starts and well-funded strong anti-biofuels campaigns. If you compare Australia to the US, UK or Canada, we are seriously behind the mark. They have all seen the benefits, advantages and opportunities of growing a strong biofuels industry, and have created strong policies and support mechanisms to ensure that biofuels have access to market. For a biofuels industry to create jobs, investment and reduce our emissions footprint in Australia, we need the Federal Government to show leadership and develop a policy approach to support decarbonisation of the transportation sector. We need the Federal Government to take Australia’s fuel situation seriously and plan for the future. Electrification may be the shining star for the passenger vehicle market in the eyes of our current politicians, but we would be doing our country a disservice to put all of our eggs in that basket. The transition to renewable fuels is accelerating at a rapid pace internationally; let’s not be left behind and wondering in ten years what happened!

In the not too distant future, we could be fuelling our cars from fuel derived from waste that was going to landfill.

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ENERGY PARTNER CONTENT BIOFUELS

THE RENEWABLE BASELOAD ALTERNATIVE TO DIESEL GENERATORS Renewable power generation and grid instability are currently the most talked about issues from both sides of politics with energy storage flagged as a big part of the solution. The ongoing discussion highlights the need for an alternative to traditional diesel powered generators.

he rapid uptake of batteries in grid and stand-alone remote generating applications is leading the energy storage charge, with alternative pathways such as wave energy and pumped hydro getting more exposure as the discussions intensify. One significant energy storage pathway that seems to be underestimated is bioenergy. Organic matter is actually natures form of energy storage – photosynthesis stores the sun's energy to be used when required. Taking animal fats, vegetable oils and oilseeds to create locally produced heavy biofuel has the potential to deliver effective and reliable renewable power generation. Heavy biofuels can be biodiesel, biodiesel variants or straight heavy bio-oils that can be used successfully in base load generators. Renewable Baseload Generators (RBG) is a newly established business that focuses on heavy biofuels as part of the solution to balance the energy mix by introducing a range of generators specifically designed for heavy biofuels. RBG CEO, Danny Williams, said, “Australia currently exports billions of litres of waste cooking oils or farmed oil seeds so the

opportunity is there to redirect this valuable resource to bolster our own national energy security.” RBG has partnered with Staunch Machinery and several engine manufacturers to deliver a range of high-speed and low-speed heavy biofuel generators to offer customers and partners the ability to back their renewable assets or their off-grid power needs with 100 per cent renewable, sustainable and carbon neutral baseload generating options. Biodiesel powered generators (high speed) are best suited to rapid response applications as used in behind-the-meter backup generators or for temporary power supply. The large heavy bio-oil powered (low revving) generators are best suited to off-grid continuous applications or working with renewable generators such as wind and solar firming up any delivery shortfalls. In conjunction with its sister company, Pro Green Biofuels, RBG can not only deliver the generating hardware, it can also deliver the fuels and the capability to manufacture, store and distribute locally to its customers and or partners so they can produce their own heavy bio-oils.

Discover the renewable alternative We specialise in large high-speed and low-speed generators that run on heavy biofuels, biodiesel or biodiesel variants.

www.rbg.space Email danny@rbg.space or call 0417 978 426 for more information

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November 2018 ISSUE 4

BIOFUELS

CEMENTING

A SUSTAINABLE ENERGY FUTURE

Manual quality control is part of the waste sorting process.

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BIOFUELS

Waste repurposing facilities are a new, and vital, step in shifting the country towards a more sustainable energy future. A new waste-to-fuel facility which recently opened in Sydney is oﬀering industrial clients an alternative energy source, taking advantage of the opportunities provided by customers looking to reduce their use of fossil fuels.

aving opened in July this year, the new multimillion dollar resource recovery plant at Wetherill Park recovers waste such as metal, clean timber and inert materials, and converts all other waste into process engineered fuel (PEF). The state-of-the-art facility was developed by ResourceCo in a joint ownership venture with waste management company Cleanaway, which has the customer base and waste supply to drive the facility and recover waste from landfill. According to the National Waste Report, Australia amassed 64 million tonnes of waste over its most recently recorded two year period. With the Wetherill Park plant licensed to receive up to 250,000 tonnes of dry commercial, industrial and demolition waste per annum, it is expected to make a significant dent on the amount of waste going to landfill, as well as one sector’s reliance on fossil fuels such as coal and gas. ResourceCo’s Chief Executive Officer Sustainable Energy, Ben Sawley, said that the facility will replace over 100,000 tonnes of coal usage per year. “This will take the equivalent of 20,000 cars annually off the road in terms of greenhouse gas emissions,” Mr Sawley said. “We’re committed to playing a key role in Australia’s future sustainable energy mix by reducing waste and lowering carbon emissions through production of a commercially viable sustainable energy product.”

Applications of PEF According to Mr Sawley, PEF currently has one key application – cement kilns. PEF is made from non-recyclable waste materials, such as plastics, dirty paper, cardboard and non-recyclable treated timber, and paired with embodied energy content. The fuel that results is perfect for cement kilns, where it is combusted within the kiln to provide the energy required to make cement. “With a calorific value of approximately 70 per cent of coal, it is quite efficient,” Mr Sawley said. PEF is currently used as a substitute for fossil fuels in both domestic and international markets in the production of cement. The Wetherill Park facility is predominantly supplying one of Australia’s largest construction material companies, Boral, with PEF for its Berrima cement kiln. In this case, PEF is being used as a substitute for coal. Any remaining fuel is exported to ResourceCo’s Asian business. The process of repurposing waste Waste goes through a complex process to be converted to usable fuel. According to Mr Sawley, this process starts when waste trucks enter the enclosed facility through a rapid roller door and tip their waste into the receiving area. “An inspection officer then checks the waste to ensure that no inappropriate materials are present, for example, wet wastes, liquids, organic materials, or hazardous medical waste,” Mr Sawley said.

Shredded waste, ready to be converted to PEF.

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November 2018 ISSUE 4

BIOFUELS “A material handler pre-sorts the waste to again remove anything inappropriate, and then premixes the appropriate waste to ensure a consistent blend of materials are entering the production process. “A front end loader picks up the premixed waste and places it into the primary M&J 6000 shredder, which sizes all materials down to a 300mm piece or smaller.”

The new facility at Wetherill Park.

Following this process, the waste progresses through a series of magnets to remove metal. It then goes through waste screens to remove fine inert particles, air separators to remove large inert materials, and manual quality control stations to remove remaining non-combustible materials. “By the end of these processes, there exists only combustible materials for a final shredding process to achieve a final sized particle of less than 50mm. The product is then finished PEF,” Mr Sawley said.

“The PEF is then either loaded into large walking floor trailers for delivery to a local cement kiln, or baled and wrapped for our export customers.” With no thermal or chemical processes involved, the process is not energy intensive, with the most power consumption coming from shredding waste materials to the required size.

The bigger picture While the Wetherill Park facility is revolutionary in terms of its capacity, it is not the first facility of its kind. ResourceCo has a suite of 22 plants across Australia and South East Asia, having innovated within the resource recovery sector for 25 years. Another of ResourceCo’s large-scale PEF plants is based in Adelaide, supplying Adelaide Brighton Cement with PEF using dry commercial, industrial, construction and demolition waste streams. “The opportunity to tap further into this market is huge and it makes good sense, both environmentally and economically,” Mr Sawley said of the Wetherill Park facility. “We intend to build more PEF plants wherever there is a market need for it.” Mr Sawley said that at this stage, ResourceCo does not see a large-scale, commercially-viable alternative to PEF manufacture for the waste streams it deals with and will continue to produce PEF for use in the cement industry. “PEF is a very well proven, environmentally and commerciallyviable alternative for these waste streams, which are currently going to landfill,” Mr Sawley said. Cleanaway, which has a network of more than 250 waste processing locations around Australia, has also stated that it is committed to making a sustainable future a reality. With all of this waste viewed as a potential resource, the possibility of processing and transforming waste into valuable commodities, such as PEF, is becoming more of a reality across every sector, industry and community.

With no thermal or chemical processes involved, the waste sorting process is not energy intensive.

November 2018 ISSUE 4

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BIOFUELS

CLEAN, BASELOAD POWER PROJECT UNDERWAY FOR

WESTERN AUSTRALIA

The Kwinana Waste-to-Energy facility is an important and significant renewable energy project for Western Australia and Australia, which took a major step forward with the announcement that the project achieved Financial Close in October 2018.

hen complete, the facility will divert up to half of the residential, post-recycling rubbish collection in the Perth metro area from landfill sites. By combusting this waste stream, the facility will generate enough electricity to power up to 50,000 households, divert hundreds of thousands of tonnes of kerbside rubbish from being buried in landfill, as well as reducing the greenhouse gases associated with landfill operations and enabling far better use of valuable land. Underpinning the project are 20-year waste supply agreements with the Rivers Regional Council, representing seven local government authorities (LGAs); and separately with the City of Kwinana. Under these agreements, all eight LGAs will supply residential, post-recycling waste to the plant, which is designed to receive and process up to 400,000 tonnes of residual waste per annum. As well as significantly reducing their reliance on landfill disposal, these agreements will also assist the LGAs to deliver a step change toward the State Government’s waste diversion target. The Kwinana Waste-to-Energy facility will also be a Preferred Supplier of baseload renewable energy to local governments under a preferred supplier panel contract with the WA Local Government Association (WALGA). A unique renewable source Unlike solar and wind generation, waste-to-energy plants are a unique source of continuous renewable energy, reflecting the fact that every week households are producing material for both recycling and combustion. On average, a wheelie bin placed on a verge for collection contains enough waste to produce up to 14 per cent of a household’s weekly power needs. The Kwinana Waste-to -Energy Project has received all approvals required from Western Australian Government agencies in order to construct the plant within the Kwinana Industrial Zone. The facility is a Level 2 state project and has received positive support from successive Western Australian Governments. Preliminary groundworks commenced on the project in the first quarter of 2018, including geotechnical investigations and groundwater pumping tests. Construction of the $450 million, 36MW plant is expected to create at least 800 jobs during the project’s three-year construction phase, with a range of subcontracting and supply opportunities available to local businesses. There will be approximately 60 operational and management jobs at the plant once the facility is completed. The facility The Kwinana Waste-to-Energy facility will rely on tried and tested moving grate combustion technology that is in use in many other developed nations.

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There are more than 1000 similar facilities serving communities around the world, more than 300 of which are operating in Europe and the UK alone, mostly within major urban population centres and under strict environmental standards. Located in the heart of the Kwinana Industrial Area (KIA), the facility will process up to 400,000 tonnes per year of municipal solid waste, using best practice technologies and processes, and then exporting 36MW of baseload electricity to the grid. The facility will receive general household waste that would otherwise be sent for disposal at landfills on the outskirts of the growing metropolitan area, with most waste transported by road. No waste loads classified as either hazardous or controlled waste will be accepted into the facility. Once operational, the facility will be eligible for accreditation as a Large Scale Renewable Electricity Generator in accordance with the Federal Renewable Energy (Electricity) Act 2000. Once fully commissioned, the facility will not only process residential waste for energy recovery, it will produce ash byproducts which are commonly used internationally as alternative construction materials, and recover over 6000 tonnes per year of recyclable metals not normally recovered by other means. The project has several key objectives, including: » Zero waste to landfill – the project will develop reuse markets for ash (typically around ten per cent by volume of the feedstock), such as being used as a construction aggregate, and it will also recover metals » Maximising clean electricity generation from the feedstock – a lifecycle greenhouse gas assessment for the project has estimated that the potential net reduction in overall carbon emissions will be 400,000 tonnes of carbon dioxide per year, once the reductions in landfill gas emissions and other offsets are taken into consideration » To provide a national benchmark for sustainable waste management » To provide a long-term, reliable waste management and renewable energy generation service to the community, which is complementary, informs and encourages other waste management practices such as recycling and composting » To engage with the community and local government to raise awareness and drive improvements in source separation behaviour by households » To provide regional benefits and synergies – the project offers the potential for direct use of recovered energy as steam, electricity and recovered solid by-products by manufacturing companies in the Kwinana Industrial Area, Henderson and Fremantle Port zones Ultimately, the Kwinana Waste-to-Energy facility will provide Western Australia with a tried and proven, baseload renewable energy source. Construction of the facility is now underway, and it is scheduled to open by the end of 2021.

November 2018 ISSUE 4

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November 2018 ISSUE 4

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NSW ANNUAL ELECTRIC ENERGY CONFERENCE 2018 Adapting to the major changes reshaping the electric energy industry

November 27th 2018, Dockside Conference Centre, Sydney For more information and to BOOK NOW visit www.2em.com.au/nsweesa2018 Earlybird prices available until 30th September2018

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