Australia has opportunities to leverage both mature and emerging technologies as part of the transition to net-zero energy, a panel of scientific and energy industry experts says.

But the transition needs to be carefully managed so as to maintain grid reliability and to deliver NetZero at the lowest possible cost.

Speaking at the launch of the latest explainer from the Academy of Technology and Engineering (ATSE) on the state of low emissions technology in Australia last month, the panel discussed important measures which will be needed as part of Australia’s transition to NetZero energy by 2050.

Panelists included Katherine Woodthorpe AO FTSE, former director of the Australian Renewable Energy Agency (ARENA); Alex Wonhas FTSE, an advisory board member of the NSW Energy Corporation (EnergyCo); George Maltabarow FAICD HonFIEAus FTSE, former managing director of Ausgrid – Australia’s largest energy distributor; Professor Renate Egan FTSE, interim CEO of NSW Energy Institute and UNSW lead of Australian Centre for Advanced Photovoltaics; and Professor Lauchlan Blackhall FTSE, head of the battery storage and grid integration program at ANU.

The panel session comes as Australia is undergoing an energy crisis, which the Australian Energy Market Operator (AEMO) says saw wholesale energy prices in the June quarter at triple their levels in the same quarter last year.

The session also comes as Australia’s energy system is undergoing a transition which has seen us lead the world in deployment of solar and wind power on a per capita basis.

Across calendar 2021, data from the Australian Government Department of Climate, Energy, the Environment and Water indicates that renewables accounted for 29.1 percent the nation’s overall energy generation (267,452 gigawatt hours (GWh).

On current projections, this is expected to rise to 50 percent and 69 percent by 2025 and 2030 respectively.

By 2025, AEMO expects Australia’s electricity grid to be capable of running on 100 percent renewable energy.

At the same time, around two-thirds of the nation’s coal generation capacity – which accounted for just over half (51.4 percent) of all generation last year – is expected to close between now and 2040 and will need to be replaced.

From a climate perspective, clean energy will be critical to Australia’s 2050 NetZero objective as electricity accounts for 34 percent of Australia’s carbon emissions.

Last week, Commonwealth and State energy ministers agreed to establish a national partnership to work toward Australia’s energy transformation.

Source: Australian Energy Statistics, Department of Energy, Science and Resources, April 2022

Several themes stood out during the discussion at the launch of the ATSE report:

1. The current crisis has several underpinnings.

Whilst the discussion focused on longer-term transition, Wonhas says the current energy crisis has been driven by several factors. These include high coal and gas prices fuelled by the Ukraine war and significant outages on aging coal plants. (High demand and lower solar generation in recent months on account of adverse weather have also contributed.)

On aging coal plants, Wonhas acknowledges that some downtime for maintenance is expected but stresses that we are seeing more outages which are taking longer to rectify. At the Callide Power Station in Central Queensland, repairs following an explosion caused by catastrophic failure of the hydrogen-filled generator last May are expected to take one-and-a-half years and will not be complete until December.

Those outages also point to the aforementioned need to replace aging coal plants as they retire.

2. A portfolio of technologies is needed going forward

According to the ATSE report, a range of technologies are needed to transform our energy grid.

These include:

• Renewable generation technologies, such as solar, wind and biomass (an emerging technology). As mentioned above, these are expected to deliver 69 percent of Australia’s electricity generation by 2030.
• Storage technologies such as pumped hydro (including Snowy Hydro 2.0) and large-scale batteries.
• Grid technologies and transmission infrastructure upgrades to enable the grid to handle higher levels of variable and intermittent renewable energy generation (see points 5 and 6 below)
• Use of gas fired generation through gas turbines as a transition technology whilst the nation constructs sufficient wind, solar and storage infrastructure to accommodate a renewable energy future.

Note that the panel does not consider that nuclear energy will be viable and cost effective as part of Australia’s transition to net zero electricity at this stage (refer separate article). Accordingly, nuclear was not considered as part of the report or panel discussion.

3. Strong Regulatory Framework Needed to Encourage Massive Investment

Whilst Australia is adding renewables fast, all panelists agree that the scale of the transition will be huge.

To reach NetZero by 2050, Maltabarow says we need a nine-fold increase in large-scale solar and wind, a five-fold increase in rooftop solar, a three-fold increase in firming capacity and an additional 10,000 kilometers of new transmission infrastructure.

To encourage this, he says the regulatory environment needs to incentivise investment and unblock regulatory barriers.

In some areas, this could be tricky. Whilst gas is not a low-emission technology, the market will need to facilitate a price and availability which enables gas to fulfil its role as part of the energy transition. Meanwhile, the market for batteries (where cost is falling but remains relatively high) will need to provide investors with relative certainty over their revenue streams to enable the technology to fulfil its role as storage in the transition.

In addition, Maltabarow says a framework will be needed to enable risk-sharing between investors and consumers. He points to interventions outlined in the NSW electricity roadmap as an example.

4. Energy Storage is important

Given the intermittent nature of solar/wind generation, panelists stress the need to have enough energy storage capacity to maintain secure and reliable supply as we move away from fossil fuels.

Indeed, in its 2022 Integrated Systems Plan, the Australian Energy Market Operators says a 30-fold increase in storage capacity is needed by 2050.

Energy storage comes in two main forms: pumped hydro and batteries. As things stand, pumped hydro accounts for 96 percent of global storage power capacity and remains the prime source of large-scale energy storage notwithstanding that the cost of batteries is falling and that large-scale battery storage is gaining momentum in Australia.

Going forward, Blackhall says important additions to these will include:

• increasing uptake of medium-scale battery storage such as community or neighborhood batteries installed in streets and suburbs.
• batteries deployed in residential settings and households – in many cases, households are jointing virtual power plants which enable individual battery and solar systems to work together to supply energy to the grid.

The 300 Mw Victorian Big Battery just outside Geelong can store enough energy to power up to one million Victorian homes for up to 30 minutes

5. Grid management will be critical

To cope with greater intermittency and variability, management of the electricity grid will be critical.

This is particularly important, Maltabarow says, as the grid requires an instantaneous balance between supply and demand and needs to be maintained at a constant frequency of 50 cycles per second. If the gird is stressed beyond small tolerances, it does not slow down but instead stops altogether.

First, significant investment in long-distance electrical transmission infrastructure is needed. This will enable energy from new solar and wind farms to be brought into cities. It will also enable energy to be shared across states in such a way that good weather from one state is able to compensate for poor conditions in other states.

Across the grid itself, deployment of synchronous condensers will be critical. These are spinning electromagnetic shafts which can produce or absorb grid power. They can help to regulate voltage and enable the electricity system to continue to operate in a consistent state of supply matching demand without the grid being impacted by dips in supply. They are now being deployed across the nation. Areas of focus include those with high renewable energy generation penetration or where generation occurs far from cities where demand is concentrated

Finally, renewable networks will require further development of software systems and data to enable monitoring and decision-making for region-wide energy generation allocation, optimisation, and demand management.

One example of this is ‘nowcasting’ technology which was recently trailed in South Australia under a one-year pilot project led by solar and data and forecasting firm Solcast. The project saw technology deployed to provide high-accuracy weather forecasts (five-minute increments for up to six hours across a gridded area of one to two kilometres) to generators and to the Australian Energy Market Operator. This enabled cloud cover and wind to be tracked in minute detail throughout the day and provided greater information for grid operation to manage electricity supply, storage and demand.

6. Get Serious About Demand Management

According to Maltabarow, a key part of handling greater intermittency and volatility involves managing demand to better match likely supply at any given time.

This has been often talked about but received little action.

Traditionally, Maltabrow says electricity grids have simply built enough capacity to meet the highest peak demand with an additional capacity for anticipated outages. In the Ausgrid network which he previously managed, a quarter of capacity was built for just four days of the year.

Going forward, he says this will not be feasible with greater volatility. Instead, we must be able to manage and shed demand in a sensible way.

Key to this will be pricing reform. This includes time-based pricing and dynamic pricing. Consumers should have options to reduce their energy demand through smart meters and internet controls particularly at certain times of the day and should be rewarded for doing so.

This should not require households to ‘stand by monitors’. Instead, it must be available through set and forget software which can be tailored to individual households.

Maltabrow expresses frustration about the lack of action in this area – a phenomenon he attributes to a timid response from regulators and resistance from incumbents.

He cites one (unnamed) CEO of an incumbent firm, who described demand management as ‘blackouts’.

7. Electrification and Integration of Electric Vehicles

In addition to above measures, Blackhall says additional strategies will be needed.

To capitalise on clean electricity, homes and commercial buildings will need to be electrified and powered 100 percent by electricity.

As uptake of electric vehicles (EVs) gains momentum, meanwhile, these must be integrated with the energy system. This could unlock energy stored within EV batteries for use within the grid through vehicle to grid technology . This will enable electricity from stationary vehicles to be uploaded to the grid during times of peak energy demand in early evenings before the EV batteries are subsequently recharged overnight when energy demand is low.

Should all vehicles be electrified, Blackhall says potential storage available through EV batteries would equate to five-and-a-half times that of Snowy Hydro.

(On the flip side, EVs could exacerbate peak energy demand challenges should masses of EV owners recharge their vehicles in the early evening.)

8. Social and Economic License

Whilst discussion around the energy transition often focuses on technology and assets, Blackhall stresses the need to consider social and economic dimensions and to ensure that a social license for change is maintained.

Toward this end, he would like more social science research to better understand household and community expectations.

Call to Action

Wonhas says the importance of action should not be underestimated.

“Australia has the technologies to avoid a future crisis, but we must act now to lay the foundation of a truly modern energy system,” he said.

“Immediate investment in the deployment of mature technologies, demonstration of emerging technologies and development of grid infrastructure capable of running a renewable energy system is necessary to ensure Australia can meet its unique challenges.”

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