South Australia’s power sector: renewables, batteries and the future role of gas
Nicholas Browne A B and Bikal Pokharel AA Wood Mackenzie, 3 Church Street, Singapore, 049483.
B Corresponding author. Email: Nicholas.browne@woodmac.com
The APPEA Journal 58(2) 505-507 https://doi.org/10.1071/AJ17063
Accepted: 20 March 2018 Published: 28 May 2018
Abstract
The South Australia experience is noteworthy in a global power mix set to increasingly shift to renewable energy. The rapid growth of renewables raises intermittency challenges and has already changed the power mix with coal phased out and gas utilisation reduced. However, despite this reduction, gas still remains the most important way to ensure uninterrupted power supply. Meanwhile, South Australia is experimenting with numerous new technologies, in addition to reintroducing diesel generation, in an attempt to ensure security of power supply. Currently, these technologies are not economic compared to gas.
Looking ahead South Australia is projected to have installed renewable energy capacity exceed its peak demand by 2020. This paper asks what needs to be considered given the increasing role of renewables in the energy mix? Can battery technology combined with renewables offer a commercial solution for replacing either base load or peak load gas plants? What is required for system security to 2035? If renewables and batteries are proven commercial then what are the implications for gas?
To answer these questions, this paper will assess the extent to which renewable and battery technology costs will fall in South Australia. We will compare renewable and gas cost projections for 2018, 2025 and 2035. Using proprietary dispatch modelling we will then assess what the growth in renewables means for annually, monthly and daily gas demand. Demand will undoubtedly decline and become more volatile. This poses challenges. We will assess whether and how current gas contracting terms need to change to ensure that gas has a continued role in ensuring system security in South Australia.
Keywords: battery storage, gas contracts, intermittency, renewable energy, role gas, security of supply, solar, wind.
Nicholas Browne, Director, Asian Gas and LNG Research. Nicholas joined Wood Mackenzie in 2007 as a consultant in London. Based in Singapore since 2012, he leads research into Asian gas, LNG and power dynamics. An energy markets and LNG specialist, he has advised on several major international infrastructure transactions and project financing engagements. He also completed projects across the gas value chain such as on gas monetization options, transport economics and market entry strategies. Nicholas joined Wood Mackenzie from Total, where he worked on their gas and power trading floor, in addition to gas sales and marketing. Nicholas holds a BA from Trinity College Dublin, an MSc from the London School of Economics and an MBA from INSEAD. He is a member of the Association of International Petroleum Negotiators. |
Bikal Pokharel, Principle Analyst, Asian Power Research. Bikal is responsible for the overall research, analysis and modelling of Asian power markets. He has led an expansion of Wood Mackenzie coverage in recent years to cover Japan, South Korea and Australia. Prior to joining Wood Mackenzie, Bikal was a power specialist at Power Seraya in Singapore, where he was responsible for analysing the Singapore electricity market and developing market models to forecast market conditions. The developed models were used for making bidding strategies in the half hourly electricity market in Singapore.Bikal holds a BSc Eng Electrical Engineering from Regional Institute of Technology, India and a PhD Power Engineering (Electricity Markets) from Nanyang Technological University, Singapore. |
