Powering Australia by Treehouse Type & Art Workers

POWERING AUSTRALIA VOLUME 3 • 2009

SOLUTIONS FOR A SUSTAINABLE FUTURE

PROUDLY ENDORSED BY Australian Power Institute • Energy Networks Association Energy Retailers Association of Australia • National Generators Forum

POWERING AUSTRALIA VOLUME 3 • 2009

SOLUTIONS FOR A SUSTAINABLE FUTURE

KEITH ORCHISON & JOHN ARLIDGE

Lead ENERGEX

Major AEMO Alstom Australian Coal Association ERM Power Geodynamics Limited Tarong Energy Western Power

Key ACCIONA Eraring Energy RPG Australia Siemens Limited

Roll of Honour

Contents

4 6

54 More powerful challenges for regulators

Nuclear Australia – the giant minnow

South Australia seeks green leadership

Introduction by Keith Orchison Peak power pressure for suppliers Reticulating electricity reliably when most needed by consumers at times of extreme weather presents a multi-billion-dollar challenge

Australia’s lucky streak continues A decade ago coal seam methane was an emerging technology in which some commentators had little faith because of perceived recovery problems

Kogan Creek pushes efficiency limits Low cooling water requirements, low carbon dioxide emissions and low operating costs are three reasons this Queensland coal plant is making its mark

How far can gas dash? The inevitable shift to a decarbonising economy opens large-scale opportunities to replace the dominant power fuel of the past century

Little bits add up to a lot The federal government’s target of achieving 20 per cent renewable power consumption by 2020 has elevated the importance of hydro-electric plants

Is IGCC the best greenfield coal solution? Australia is at the forefront of one of the most promising technologies for meeting the challenge of sharply cutting generation emissions

42 Sustainability a high stakes goal

Victoria sees itself as well-placed to pursue substantial power and water efficiency gains while managing population and economic growth

48 Emissions and efficiency rule technology field Major equipment suppliers are engaged in a fierce, high-cost competition to lead the development of power sector innovation

Fifteen years of dramatic reform in supply and the current need to guide massive capital investment while costs remain competitive confront energy watchdogs

Realities changing rapidly for retailers Increasingly tough market conditions plus fast-emerging carbon policies make life tough for the energy supply vanguard

Networks spending millions every day No part of energy supply needs to find more money for capital works than the organisations managing power distribution infrastructure systems

Grid pathway to future sustainability High voltage links are critical to delivering the promise of a new renewable industry for Australia and that is only a small part of the challenge

The world’s leading exporter of uranium for power generation still refuses to countenance turning to nuclear to supply its baseload electricity needs

Wrestling the need to replace ageing assets, grow the economy and keep energy prices cost-effective, the South Australian Government also wants large renewable development

90 Company Directory 93 Credits 94 Index

Peak power pressure for suppliers

Reticulating electricity reliably when most needed by consumers at times of extreme weather presents a multi-billion-dollar challenge

prawling across Sydney’s western suburbs up into the Blue Mountains and out to the Illawarra, the Southern Highlands and the New South Wales south coast, Integral Energy’s 24,500 square kilometre operating area is a poster child for the task electricity suppliers face in meeting peak energy demand. The homes of the NSW Government-owned utility’s two million customers experience sharp cold in winter, and summers of high humidity and high heat – reaching 44 degrees Celsius from time to time. Peak demand occurs when most of them seek to use electricity simultaneously on a hot summer’s day or during a winter cold snap, adding to the continuous business load. The issue has become significant in energy planning, on the back of a national shift in residential and business sectors to large-scale use of heating, ventilation and cooling systems – which the Australian Institute of Refrigeration, Air Conditioning and Heating calculates now consume more

than 45,000 gigawatt hours of electricity a year nationally, amounting to 22 per cent of the nation’s demand. Twenty years ago, barely a fifth of utility customers had air-conditioning in their homes. Today 70 per cent of those in Integral’s area do, and the number continues to climb. Largely because of air-conditioning, the area’s peak power system demand has shifted from winter to summer, requiring temperature-sensitive equipment, a lot of which was installed 30 to 40 years ago, to work hard in the hotter months to deliver far more electricity under more stress than was envisaged in their design. Looking further ahead, suppliers across Australia can see an additional challenge if predictions of higher summer temperatures, and more frequent heatwaves resulting from global warming, prove true: air-conditioning will become necessary in every school, whereas today state governments tend only to fund it for the hottest regions, and the residential uptake will be close on 100 per cent.

Peak power pressure for suppliers

Investment of this order has made the $45 billion national power delivery system, combined with the gas distribution network, the third-largest engineering construction activity in Australia.

Even the current situation throws up two big challenges in New South Wales: first and foremost, generators, the market operators and the NSW Government need to ensure that there is enough capacity to meet peak demands; secondly, the network system must be able to reticulate adequate supplies reliably when it is most needed. The state, the nation’s largest electricity consumption region, has seen peak capacity needs rise from little more than 9000MW in 1990 to over 14,000MW now, with the industry forecasting that the peaks will require more than 17,000MW by the middle of the next decade. While this has required, and will continue to require, multi-billion-dollar outlays on generation plant, the capacity investment is overshadowed by the capital demands of the networks. Integral and the state’s other two government-owned distributors, Energy Australia and Country Energy, obtained authorisation from the Australian Energy Regulator to spend some $14 billion on network expansion and upgrades over five years to 2014, the largest regulated outlay in the country’s history, and nearly double the past five years’ capex. Energy Networks Association chief executive Andrew Blyth claims that investment of this order has made the

$45 billion national power delivery system, plus the gas distribution network, the third-largest engineering construction activity in the country. The Australian Consumer and Competition Commission reports that national capital spending by the networks has risen 40 per cent in inflation-adjusted terms, including transmission systems, over the first half of this decade, and it adds that the distribution systems are now spending $3 billion a year. Yet the demands of peak consumption are not the sole drivers of this expenditure. The networks also need to replace ageing equipment and, especially in the cases of Integral, ENERGEX in south-east Queensland and Western Power in Western Australia, to install new systems to serve mushrooming new suburbs and the commercial, health and education facilities they require. Rouse Hill in north-western Sydney, served by Integral, was an area of paddocks less than a decade ago. On current building projections, it will be an urban development the size of Canberra by 2030, with 60,000 homes and businesses. Suburban sprawl is not the only issue. In western Sydney, as well as parts of other cities across Australia, local government increasingly is favouring rezoning residential areas from low to medium density to

Peak power pressure for suppliers

LEFT Peak consumption demands are not the sole drivers of capital expenditure, the networks also need to replace aging equipment. RIghT Building new substations and replacing those built 40 to 50 years ago are high priorities.

accommodate town houses, villas and apartment blocks, also driving up energy demand from established suburbs. The large increase in home offices and reliance on internet services adds yet more demand for power and a highly reliable service. ENERGEX points out that average energy intensity in homes is rising sharply – in its franchise area, a decade ago the average household consumed about 7000 kilowatt hours a year. Today this demand is pushing 12,000kWh annually. The government-owned distributor is further challenged because it is called on to serve a substantial part of the 40,000 people who shift to Queensland from the southern states each year and quickly find that they need air-conditioning in order to cope with sub-tropical humidity. For Australian distribution utilities, particularly those operating in areas like Integral’s Blue Mountains region, summer storms and their potential to disrupt supply add still more reliability requirements. The scale of the investment in network upgrades and expansion tends to overwhelm the layman, but ENERGEX makes the scale of the numbers involved more easily understood by pointing out that it is now spending $3 million a day. The need for reliable service – which regulators have made more stringent in recent years – places particular emphasis on replacing assets built in the 1950s and 1960s. Substations of this vintage inevitably now have rusting steelwork and foundations, oil leaks and cracking insulators. Spares frequently are no longer available. Substations cannot simply be closed for refurbishment – supply would become unavailable to areas for the duration of upgrading work – so entirely new plants have to be built and they can cost $45 million to $60 million each. In Integral Energy’s case, it operates 28,000 substations linked by 33,000 kilometres of cables and more than 315,000 power poles, with the most modern systems featuring undergrounded cabling. Expensive transformers are a major part of these facilities and Integral’s development plans for the five years from 2009 include replacing 1000 of them. These factors add up to a need for distribution networks to re-assess their planning and their customer service approaches as well as for governments to improve building regulations and standards. “Smart meters” and utility ability to control air-conditioning loads are among the concepts being trialled, but coming up with viable solutions requires time, a major communications effort and, inevitably, extra costs.

Australiaâ&#x20AC;&#x2122;s lucky streak continues

Australia’s lucky streak continues

A decade ago coal seam methane was an emerging technology in which some commentators had little faith because of perceived recovery problems

ith coal losing favour and Australia’s energy intensive industries under threat, salvation could be at hand for “the lucky country” from an unexpected source, coal seam methane. In just a few years, coal seam methane has transformed from a promising curiosity to our most prospective energy resource. Carbon emissions from gas-fired electricity generation are half those of coal, and coal seam methane now seems far more abundant than analysts thought it would be. At present, it is also relatively low cost. There are large established reserves in Queensland and highly promising new developments in New South Wales. Australia’s total inferred resources of coal seam methane are estimated to be more than 275,000 petajoules of energy. To give that context, our present national demand for gas of all types is around 200 petajoules per annum.

history A decade ago, coal seam methane was an emerging technology in which some commentators had little faith due to perceived problems with drawing as yet unproven gas reserves from porous coal seams. While persistence in the United States since the 1970s saw an emerging industry there, Australia’s early foray was unsuccessful. Sydney Gas, in 1987, attempted to exploit methane from coal reserves around Camden, on Sydney’s south-western outskirts. It sparked community protests and, as fate would have it, the project hit early technical snags. “Every coal seam has unique properties,” explains Robert Williams, an analyst with Farrington Corporate Services. “Hopefully, you put a drill down and the pressure differential between gas trapped underground and atmospheric pressure at the surface is enough to bring it up once you pump out the water.” Sydney Gas had to go a step further, pumping fluid

Kogan Creek pushes efficiency limits

“The focus of the coal seam methane industry at present is on LNG plants with a view to exporting gas.” David Brown, chief executive, CS Energy.

Even that is only partly why Kogan Creek is exceptional. Virtually every coal-fired power station constructed up to the end of the 20th century relied on mining coal from a convenient source, washing and blending it and transporting it, often over long distances, to the power station. Kogan Creek has its own coalmine adjacent to the power station, and the coal is conveyed about four kilometres directly to pulverisers which feed unwashed product to the boiler as a fine dust. For most of the time, that is how the plant operates, with deviations to and from a stockpile necessary to cope with night-time (low load) operations when the mine is not working, wet weather and periods when mining moves to a coal seam that has different characteristics.

“No two boilers are the same because you adapt them for the type of coal they get”, explains Brown. “When we change seams we blend the new and old coals and make the change gradually over a few days.” Few power stations in the world can claim Kogan Creek’s efficiency: the mine, operated by Goldings, employs up to 50 people; while the power station is staffed with 40 operators and maintainers, plus “a couple” of sub-contractors for ash handling and cleaning. “We are a low cost operation from a number of perspectives”, says Brown. “Single [work] shifts operate at the mine and the power station, further reducing our operating costs.” It is the largest power station anywhere in the world to operate a single work shift.

Kogan Creek pushes efficiency limits

In one respect, water supply, the power station is less energy efficient than it could be, but the trade-off is worth it, given that in Australia, water is scarce and expensive away from the coast. Conventional coal-fired power stations are big water users – typically more than 15,000 megalitres a year – which is why new plants used to be located close to water and remote from mines. Kogan Creek is air-cooled. In place of huge cooling towers, it has a condenser the size of a football field. Picture a massive car radiator turned on its side and suspended 15 metres in the air and you’ve got it. Low pressure turbines deliver spent process steam through two six-metre-diameter pipes. Forty-eight fans under the condenser pipework, each nine metres in diameter, restore the water to liquid before re-circulating it. The only water loss is from occasional blow downs to clean the process water. Kogan Creek uses just 1500 megalitres a year, pumped from an artesian bore. It is around the same amount of water that a medium-sized irrigation farm would use. Supplied by Siemens, the air condenser is the biggest in use anywhere in the world. The benefits of air-cooling in an arid climate were realised in 2007/2008 when some power stations in southern Queensland were forced to reduce output for several months to conserve water. Kogan Creek’s high thermal efficiency means that it has the lowest carbon dioxide emissions of any coal-fired plant in Australia. Brown and CS Energy are keenly aware that carbon constraints brought about by Australia’s proposed emissions trading scheme will change operating conditions as time goes on. The plant was built to be carbon capture

ABOvE Kogan Creek’s single turbine produces enough electricity to power a medium-sized city. OPPOSITE There are very few power stations around the world that can match Kogan Creek’s high level of thermal efficiency.

ready, with room set aside on the site for carbon scrubbing equipment. Brown says they are presently investigating the feasibility of pre-heating boiler steam using solar energy that would further reduce carbon emissions. So far, the power station has lived up to the high expectations of CS Energy, the owner, and Siemens, the developer. Its 8000-hour inspection, in November 2008, was judged an outstanding success. While peripheral issues were identified, all major systems were operating safely and within performance parameters. CS Energy now has Kogan Creek II on its radar, with present thinking that there may be a window of opportunity in 2014. To meet that timeframe a decision will have to be made in 2010. Brown says whether and when the project goes ahead will depend on several factors, including how the gas market develops in Queensland. “The focus of the coal seam methane industry at present is on LNG plants with a view to exporting gas. Kogan Creek is more likely to go ahead if LNG is exported.” Brown says Kogan Creek II is, on paper, essentially a replication of the existing plant on an adjacent site. It would leverage both the coalmine and existing high voltage transmission facilities.

Little bits add up to a lot

ABOvE Wind, solar, geothermal and other renewable resources will be required to meet the looming shortfall at huge capital cost. OPPOSITE hydro takes just 90 seconds to bring online from a standing start, making it wonderfully flexible.

contribute 50 gigawatt hours per year to the system. A lower power station on the same system will also be redeveloped to contribute 20 gigawatt hours per year. Connarty says the prospective 20 projects will produce a maximum of around 440 gigawatt hours at a cost of $200 million. Fewer prospective projects have been identified necessary to make up the remaining 560 gigawatt hours, but these will cost close to $400 million. Similar fiddling at the edges is happening everywhere in Australia’s hydro systems. The 4500 gigawatt hour Snowy Mountains Scheme, which plays a major role in regulating power between NSW and Victoria, has a $300 million modernisation project planned. It involves new micro-hydro generators on many of its facilities and refurbishing existing turbines and pipes. Stanwell Corporation, which owns and operates two large hydro stations in far north Queensland – Barron Gorge, on the Barron River, and Kareeya, on the Tully River – has also invested in value-adding. A new small power station at Koombooloomba Dam takes advantage of water releases to Kareeya Power Station’s head weir. Stanwell has also built a micro-hydro generator on Wivenhoe Dam, Brisbane’s main water supply reservoir.

Hydro is wonderfully flexible. In contrast to most other forms of electricity generation, it takes just 90 seconds or so to bring it on line from a standing start, making it ideal for managing fluctuations within electricity networks. Barron Gorge and Kareeya power stations, at the far northern end of Queensland’s high-voltage grid, fulfil this role. Pump storage facilities, such as those in the Snowy Mountains Scheme and at Splityard Creek, above Wivenhoe Dam in Queensland, use baseload power to lift water up to holding dams during the night when demand is low. It is then released to generate large quantities of power at periods of peak demand. With the exception of Tasmania, where hydro-electric generation is used for baseload supply, most hydro power is reserved for peak and intermediate periods. This conserves the finite resource and generally attracts better prices for generators. Together with the government’s RET and CPRS, these factors make small-scale hydro development commercially attractive and the little bits are all starting to add up. However, observers agree new development will fall well short of the federal government’s 20 per cent target, meaning that wind, solar, geothermal or other renewable energy resources will be required to meet the shortfall at huge capital cost, including some $4.5 billion for high voltage transmission. The irony is that in Tasmania’s untapped rivers, in far north Queensland, and a dozen spots along the eastern edge of the Great Dividing Range, several thousand gigawatt hours of potential hydro power that could be developed at relatively low cost will almost certainly be overlooked.

Little bits add up to a lot

ABOvE The victorian government has targeted the development of 1000MW of wind farms by the end of this decade.

produced from brown coal, of which some 66 million tonnes are mined each year. An environmental lobby organisation, The Climate Group, excited media attention at the beginning of 2009 by pointing to an 8 per cent increase in Victoria’s greenhouse gas emissions since 2000, and a 2.1 per cent rise in 2008. Emissions from the brown coal generators had risen 2.4 per cent over 2007. “Victoria, the dirty state, shamed by emissions scoreboard,” cried a headline in a major newspaper. The core accusation was that Victoria’s emissions in 2008 had risen disproportionately compared with those of NSW and Queensland. The state’s Environment and Climate Change Minister, Gavin Jennings, was quick to respond that, while Victoria’s population and economy have grown this decade, per capita emissions have not. They rose by 15.4 per cent between 1990 and 2000 and fell by 5.4 per cent through this decade, he pointed out. Emissions intensity had improved 17 per cent during the past eight years, he said, with business

emitting only 510 tonnes of greenhouse gases now for every $1 million of production, versus 710 tonnes in 1990. He could have added that some of the brown coal generators’ output had gone to saving Tasmania from economic discomfort by sending energy south across Basslink when drought reduced the productive capacity of hydro-electric plants. The minister pointed, also, to a range of Victorian Government initiatives to help cut emissions, including funding of some $300 million for renewable energy projects, Victoria’s own renewable energy target scheme (which is due to be subsumed in the national program proposed by the Rudd government), an obligation imposed on energy retailers to help residential customers improve their efficiency in conjunction with a government program promoting home energy saving, a program of rebates for people in regional Victoria installing solar hot water systems and improvements to state building codes that he claimed had so far reduced carbon dioxide emissions from new homes by 340,000 tonnes. The Victorian Government has targeted the development of 1000MW of wind farms this decade – ten times the 2008 level – as well as supporting projects to build gas-fired capacity. It estimates there is 2000MW of wind capacity within a short distance of transmission lines.

The Climate Group has pointed to an 8 per cent increase in Victoriaâ&#x20AC;&#x2122;s greenhouse gas emissions since 2000, and a 2.1 per cent increase in 2008.

Its political opponents were equally quick to point out that the Victorian Government had made a commitment in 2002 to reduce the stateâ&#x20AC;&#x2122;s annual emissions by 8.5 million tonnes by 2006 and had failed to deliver on it. (Since then the government has made a commitment to pursue emissions reductions of 2.7 million tonnes a year between 2009 and 2011.) Premier John Brumby argues that Victoria is well-placed to be a leading state in tackling greenhouse gas abatement as well as water saving technologies, and that this requires communities and businesses to work strongly to convert government policies in to practical actions. His optimism is supported by market research that shows nearly three-quarters of Australians polled strongly agree that individuals need to change their behaviour to reduce their impact on the environment â&#x20AC;&#x201C; and 78 per cent of companies believe they have a responsibility

to reduce emissions even if this involves adding to costs. State agency Sustainability Victoria has a major focus on the environmental performance of buildings, pointing out that they consume almost a third of resources around the world and the number in use in Australia is rising by up to 4 per cent a year. The problem with buildings, it points out, is that 70 per cent of their environmental impacts are locked in at the design stage and 95 per cent by the time construction commences. The issue, it says, needs to be tackled effectively at the concept stage. The Brumby government says it will cut its own energy use by 5 per cent by 2010 and increase its use of green power to 25 per cent. It highlights its commitment to sustainability by pointing out that, since 1999, it has invested some $3.4 billion in research and innovation, a record, it claims, for Australian states.

More powerful challenges for regulators

Fifteen years of dramatic reform in supply and the current need to guide massive capital investment while costs remain competitive confront energy watchdogs

n briefings given by the Australian Energy Market Commission (AEMC) and the Australian Energy Regulator (AER) – the industry’s two regulatory bodies – the word “challenging” crops up a lot these days. The former is the organisation which sets rules for the energy market and the latter enforces them. Challenges stem from continuing reform of what were once state-owned monopoly electricity businesses and the entry of two new and large market factors: the federal government’s renewable energy target and its proposed carbon pollution reduction scheme. The energy industry has changed dramatically since reform started 15 years ago and John Tamblyn, the AEMC’s inaugural chairman, is refreshingly blunt about the electricity providers of yore: “These businesses were large, inefficient and unmanageable,” he told a recent conference. There was a time when he would have ducked flying shoes after saying that.

The ensuing decade saw electricity businesses separated into competitive and non-competitive segments with a national market structure imposed on them. The market stretches more than 4000 kilometres from Port Douglas in far north Queensland to Port Lincoln in South Australia. State networks are now physically interconnected, with Tasmania joining the market in 2006 when the undersea Basslink was commissioned. In 2008, electricity valued at over $11 billion was traded through the National Electricity Market by around 275 registered generators with a total output of over 200,000 gigawatt hours, serving 8.7 million customers. Grid interconnections were the main physical manifestation of reform, although Ed Willett, an ACCC commissioner and AER board member, points out that 6600 megawatts of new generation was added to the national market between 1999 and 2008 to meet demand growth. Both Willett and Tamblyn laud this as one of

Realities changing rapidly for retailers

restructuring, with the integration of generation and retailing recently taking on an increasingly important role. The big public and political hurdle remains rising prices. Garnaut noted that “the most significant remaining step” towards establishing a competitive electricity market is the removal of retail price regulation. In an understatement, he said state and territory governments have been “cautious” about relaxing price regulation, with the Council of Australian Governments process having at least in the past year delivered a commitment by the jurisdictions to fully opening up the market, while retaining a caveat that they need to protect consumers who are in financial hardship. The Energy Retailers Association of Australia (ERAA) has been urging governments continuously to understand that maintenance of price regulation will prevent its member companies from passing on the higher costs of a carbon constrained environment in a timely manner when the impact is potentially as much as a 25 per cent rise in the next few years. What they fear is that this could cause them substantial losses and put them in a position where their ability to contract forward with generators is at risk. Forty to 45 per cent of the retail price of power is the wholesale cost of energy, another 40 per cent is network charges and the remainder is made up by retailer costs and their sales margin, which, under normal circumstances, would be about 5 per cent. In a submission to the federal government before the announcement of the carbon white paper, ERAA and other energy associations warned that systemic failure or financial distress among major retailers would increase market volatility and risks, undermining reliability and security of supply. Retailers argue that it is a “struggle” to get estimates of wholesale prices right in the eastern seaboard marketplace and that the best means to guarantee that end-user costs are appropriate is to ensure a high level of competition between them. The whole point of pursuing carbon pricing and other abatement measures, they add, is to provide price signals to consumers to adjust their behaviour. ERAA has proposed a five-point set of key principles to guide government approaches to greenhouse gas abatement policy. u Start, it argues, with effectiveness and efficiency, enabling emission reductions to occur at the lowest cost, with markets determining the technologies to be used. u Ensure equity and transparency in the process, it urges, so that the burden of reducing emissions is shared across the community in a fair and open way. u Employ administrative simplicity to reduce the costs of the system for participants. u Deliver regulatory certainty, it adds, via a robust and stable policy framework to enable the carbon price signal to be passed through. u Finally, it says, ensure that the scheme implemented in Australia can be linked with a global framework or at least the predominant international .

ABOvE Where governments have provided the necessary leeway, local markets are admired overseas for their competitiveness.

One of the key areas with which both governments and retailers will need to wrestle in the rest of this decade is the introduction of “smart meters”. Today, most Australian supply is measured by electromechanical accumulation meters that record only total consumption and are read individually every three months. One of the main areas of the ongoing electricity revolution in this country will come with the roll-out of meters that measure consumption in 30-minute intervals, with the data collected remotely using two-way communications technologies. The selling point for these meters is pre-eminently that they can deliver very useful cuts in greenhouse gas emissions, provide a means of cost savings for power companies and make available energy use and price information to customers to better understand how to reduce their bills.

Realities changing rapidly for retailers

According to Ross Garnaut, removing retail price regulation is “the most significant step” that remains to be taken in the establishment of a competitive electricity market in Australia.

It is claimed that, when fully rolled out, smart meters could reduce electricity consumption by between 4 and 10 per cent, cutting emissions annually by nearly 20 million tonnes, enabling a reduction in national emissions of between 3 and 4 per cent. One of the critical issues is the cost of the roll-out. For Victoria alone, where 2.5 million such meters are intended to be installed by about 2013, the cost is estimated to be $2 billion. Estimates of the full national bill run to around $7.5 billion. How this will be passed on to customers is politically sensitive – as is the fact that the industry can use the system to control use of air-conditioning in extreme weather when the supply is under pressure. There would be tensions in this relationship even if residential customers were dealing with government, but increasingly the retailer is owned by private investors, with

the largest regional market, New South Wales, delivering its retail sector in to private hands this year after a long and often angry debate. Governments other than in Victoria – where the decision to go ahead has been taken, but consultations on how to proceed are far from complete – have not been in any hurry to introduce the change. The current Council of Australian Governments position is that the roll-out will occur progressively in areas where it can be demonstrated that the benefits outweigh the costs. The other major area of negotiation is between distributors and retailers, who need to agree on complex business-to-business arrangements. For retailers, there is also a high cost issue of installing sophisticated IT to enable the full benefits of the process to be realised for both suppliers and users.

South Australia seeks green leadership

A critical factor for remote-located renewable energy – whether wind, solar or geothermal – is transmission. Gerry Grove-White says Geodynamics has made a submission to Infrastructure Australia, calling for the construction of a “transmission super highway” linking Adelaide and Brisbane, using the Cooper Basin as its generation hub. For the time being, however, it is wind energy that is the dominant renewable generation resource in South Australia, projected to increase sharply once the federal government puts in place the enhanced target of requiring 20 per cent of national consumption to be met by green power. Already with the highest installed capacity of wind farms in the country, South Australia is hopeful of attracting a large part of the new development expected to be triggered by the renewable energy target. Current installed wind capacity is 740MW and, taking into account sites with development approval, the state is on the way to having more than 1500MW of wind farms, with room for a lot more. A group of 30 farmers on the state’s eastern coast, for example, encouraged by the outlook for renewable energy in Australia and the good natural resources of their area, have banded together to propose 600MW of wind development at a cost of $1 billion. Wind power supply, of course, along with large-scale solar power, suffers from the disability of intermittency. At present the only viable solution for market reliability is to ensure that these renewable resources are backed up by conventional power stations, increasingly open-cycle gas-fired turbines. Commercially viable, large-scale storage systems seem today to be in the same bind as “clean coal” technology – they’re coming, but when? Meanwhile, there is a new runner in the renewables

ABOvE Wind power suffers from the disability of intermittency and needs to be backed up by conventional power sources. OPPOSITE A critical factor for renewable energy – be it wind, solar or geothermal – is transmission.

race, and it may face less intermittency hassles: this is wave power, where Australia is starting to demonstrate technological skills that can be claimed to be world-leading. The Rann government has given Perth-based Carnegie Corporation a licence to explore prospects for its wave power technology near Port MacDonnell, a site that has an advantage in being not far from the electricity grid. The company’s technology, unlike many others, does not rely on having its power production located in the sea. Carnegie uses an array of submerged buoys tethered to seabed pump units to deliver pressurised water onshore to drive hydro turbines. It hopes to build a 50MW plant to demonstrate the technology’s potential. The Rann government has also approved development of a $5 million pilot plant by Wave Rider Energy off the Eyre Peninsula near Elliston. Mike Rann sees wave power as a significant additional prospect for baseload supply. “Wave energy,” he says, “represents a largely untapped sustainable energy resource and is seen to be one of the most environmentally benign forms of generation available.” His message to investors in generation generally is: “The South Australian Government will do all it can to open the way for renewable energy investment in this state.”

The power supply chain underpins Australiaâ&#x20AC;&#x2122;s trillion dollar economy and now, more than ever, is central to this countryâ&#x20AC;&#x2122;s long-term productivity, global trade competitiveness and social lifestyle as we move towards a carbon-constrained environment. How the power system evolves over the next decade to serve both Australiaâ&#x20AC;&#x2122;s economic and cleaner energy requirements will be critical to our way of life deep into the 21st Century.

RRP $29.95