Australia ministers face tension over energy policy
Australian energy ministers are preparing for a potentially fractious meeting this month to discuss keeping coal-fired plants open well beyond their retirement date, to ensure the country's power system remains reliable during a transition to lower greenhouse gas (GHG) emissions.
The proposal, known as a capacity market, will provide a strategic reserve for significant events in the National Electricity Market (NEM). The NEM accounts for more than 80pc of Australia's total electricity demand, and coal-fired plants are its largest fuel source.
But the proposal has proved to be contentious, as some state ministers have announced that they will not support it.
Australian federal energy minister Angus Taylor says the capacity market is necessary to allow more renewable energy to come onto the market. But just weeks after the policy was unveiled, the annual outlook report for the NEM showed that, contrary to what the minister had claimed, there is actually little need for a capacity market. This is because of the planned construction of power transmission infrastructure to carry supplies from one state to another, as well as additional gas-fired peaking capacity that is to be built in Australia's most populous state New South Wales (NSW), such as the 316MW Tallawarra B gas-fired power plant, and the 635MW Port Kembla gas-hydrogen power station. These plants will provide the back-up power necessary to maintain grid reliability.
There are multiple well-established generation, storage, and transmission projects that would help mitigate supply scarcity risks, the Australian Energy Market Operator (Aemo) said in its 2021 [Electricity Statement of Opportunities (ESOO) report](ESOO). Around 62pc of electricity in the NEM comes from coal-fired plants, around 30pc from renewables, and around 8pc from gas. Renewables are expected to rise in the coming 12 months and take more market share from coal and gas-fired plants.
The reliability forecast for the next five years has improved since the 2020 ESOO report, which identified a gap in the reliability of the power supply. The 2021 report shows that this gap no longer exists, primarily because of a combination of newly-committed generation, storage, and transmission developments that were not included last year, Aemo said.
In addition, 2,200MW of new capacity, including 470MW of storage capacity, is forecast to be operational in the December 2021 to February 2022 summer, and another 2,200MW of new capacity is expected to become operational within the next five years. This includes the 750MW Kurri Kurri gas-fired plant which will commence operations in 2023-24 and partially replace the 1,680MW Liddell coal-fired plant, which will be retired over 2022 and 2023, Aemo said.
State capacity
In recent weeks, Australian states have disclosed more of their own policies for transitioning to a less emissions-intensive economy. They are also showing little interest in supporting ageing coal-fired plants, which are becoming less profitable, because renewable energy is increasingly eating into their market share. Power generation from renewable sources has today doubled from around 15pc in 2017, when coal accounted for 71pc of power supply, and gas accounted for the rest.
The NSW state government received proposals in late August to build 34,000MW of renewable energy projects at one of the state's three designated renewable energy zones (REZs), where initially only 8,000MW of solar and wind were to be built.
The number of proposals exceeded the interest displayed in the Central-West Orana REZ, which attracted 27,000MW worth of projects in a space where 3000MW of renewable energy is to be built. NSW, along with Victoria and Queensland are the only states in the NEM with coal-fired plants.
Tasmania, which has the lowest GHG emissions among Australia's six states, has attracted several green hydrogen project developers seeking to gain leverage from the state's renewable energy sector, which generates almost 100pc of the state's power from hydro and wind resources. As a result, the island-state has launched an initiative called Renewables, Climate and Future Industries. Tasmania will bring together resources from all its ministries to provide a whole-of-government approach to attracting renewables and hydrogen investment, as well as dealing with climate change adaptation and mitigation, as part of its strategy to become a leading player in green hydrogen, as it missed out on previous booms in coal and gas.
At the end of August, the state government in Victoria opened its second renewable energy auction to attract proposals to build 600MW of renewable energy, as part of its strategy to meet its renewable energy target of attaining 40pc of electricity from renewable sources by 2025, compared with around 33pc at present.
Critics say the capacity market mechanism is a cynical attempt by Canberra to keep coal production and coal-fired plants going for as long as possible. Proponents in the renewable energy sector claim it will deter future investment in the sector, including for green hydrogen projects, as it will be an added cost, and will also cost consumers more.
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Kosovo confident in winter 24-25 supply: TSO
Kosovo confident in winter 24-25 supply: TSO
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Western Australia to allow some onshore gas exports
Western Australia to allow some onshore gas exports
Darwin, 19 September (Argus) — Western Australia's (WA) state government will allow onshore developers of gas fields to export about 20pc of their output as LNG during a five-year window, in response to a growing failure to bring on new supplies for the domestic market. WA previously banned onshore gas exports, except in the case of Australian independent Beach Energy's 250 TJ/d (6.7mn m³/d) Waitsia stage 2 project . Beach may be required to share its infrastructure with fellow Perth basin firms, the WA government said, to expedite market access for new projects. Australian mining firm Mineral Resources, which has argued for permission to export 85pc of the gas from its Lockyer project as LNG and fellow WA-based firm Strike Energy may benefit from the changes, as both hold significant reserves in the Perth basin. The changes apply to new onshore developments or existing projects seeking to expand production. Developers are required to reserve 80pc of gas produced for WA, with this rising to 100pc from 2031 onwards. The policy shift follows dire outlooks for WA's gas supplies as the state attempts to wean itself off coal-fired power generation. It currently contributes about a third of the electricity into the state's largest power grid. A parliamentary report last month warned WA cannot rely on sporadic appeals for more gas to meet demand. "These policy changes are sensible responses that balance the need for Western Australia to secure its energy future while encouraging onshore producers to bring on more gas supply as and when it is needed," mines and petroleum Minister David Michael said on 19 September. The 15pc reservation for offshore LNG projects will continue, while WA has promised more transparency on the policy with the publication of a yearly WA Domestic Gas Statement to reveal how producers are meeting obligations, with a review to take place after two years. An interim parliamentary report tabled earlier this year showed about 8pc of the state's offshore gas output has reached WA consumers since 2006, representing just over half the required volumes. Following public criticism of LNG producers' contributions, Australian independent Woodside Energy has since pledged an extra 32PJ (854mn m³) of domestic supplies by the end of 2025 . WA will also seek to strengthen laws designed to prevent companies banking prospective onshore oil and gas tenements, with a review into the "use it or lose it" policy to be led by the state's energy department. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU needs future power grids task force: Ember
EU needs future power grids task force: Ember
London, 18 September (Argus) — The EU must put in place a future grid task force to bring together scattered legislation and directives, so the bloc can better implement its power grid roadmap and integrate renewable capacity, according to UK-based think-tank Ember. Integrating intermittent renewables into the power grid adequately will require substantial upgrades to the power network across the continent. This is a political priority for the EU but responsibility is shared across a number of European governmental bodies, Ember said. Most of the 80 action points laid out in EU policy and legislation are the European Commission's responsibility, but some objectives are overseen by EU distribution system body DSO Entity, European grid operators association Entso-E, energy regulators' agency Acer, the EU's High-Level Forum on European Standardisation, and individual member states. The policy framework is a "positive step", Ember said. But significant grid work and modernisation are needed, which would be best met through a single body that can ensure "timely and effective" delivery, according to Ember. A dedicated task force would centralise policy support and monitoring through a single channel, provide access to financing from the European Investment Bank and European Bank for Reconstruction and Development, and develop a clear roadmap for all actions that are currently in the commission's remit. The need for a roadmap is significant as several of the commission's targets do not have scheduled completion dates, Ember said. The EU must centralise funding access for member states and grid operators to ensure stakeholders can use as much of the funding available to them as possible, according to Ember. Funding is currently underutilised and spread across several financial instruments. In addition to uniting these instruments, the access mechanisms should be streamlined and administrative burdens reduced so that stakeholders of varying sizes can utilise these funds. The EU should provide targeted funding for pilot projects on grid digitalisation, and then create a "technical toolbox" to support the digitalisation of distribution grids. The toolbox would detail best practice approaches, standardisation guidelines and interoperability technologies to ease digitalising the power network. These innovative grid technologies (IGTs) or grid-enhancing technologies (GETs) use existing infrastructure to improve renewable integration while reducing overall investment needs. IGT and GET technologies could improve renewable integration with costly network upgrades by as much as 40pc, according to a study by Latvian grid operator AST. By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesian Sumsel 1 coal-fired unit eyes December start
Indonesian Sumsel 1 coal-fired unit eyes December start
Manila, 18 September (Argus) — The first 300MW unit of the 600MW Sumsel 1 mine-mouth coal-fired power plant in Indonesia's south Sumatra province is scheduled to begin commercial operations in December following several years of delays. The plant, which is located in Muara Enim regency, is being developed by China Shenhua Energy and Lion Power Energy, which have 75pc and 25pc respective stakes in the project. Once fully operational it is expected to consume around 2-3mn t/yr of coal. Lion will be responsible for sourcing the coal. The $750mn plant is part of Indonesia's 35GW power generation roadmap developed by the Indonesian government in 2015. The project was contracted to China Shenhua Energy in 2016. The first unit at the plant was originally scheduled for completion by 2020. But land acquisition delays and the Covid-19 pandemic and resulting restrictions on the movement of people and travel bans delayed construction, Lion said. Construction work on the plant structure is now in the final stages and operational testing is expected to begin soon. But hitting the operational target date also depends on the completion of a 275kV high-voltage line that will connect the plant to the grid, state-owned utility PLN said. The 80km transmission line will pass through four districts in south Sumatra. The local government is pushing for the acceleration of the voltage line construction and has instructed the sub-district head and local government offices to provide support for the power line construction, PLN said. Sumsel 1, once fully operational, will operate on a build-own-operate basis with a 25-year power supply contract with PLN, the utility said. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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