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The future Australian National Electricity Market
– how renewable, how distributed, how
synchronous, and how much storage?
Iain MacGillAssociate Professor, School of Electrical Engineering and TelecommunicationsJoint Director (Engineering), CEEM
Machines2018 – 19th Annual
Conference
Coogee, 29/10 – 1/11/2018
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2Progress in energy transitions - some Australian and global perspectives
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A destination – shaped by energy trilemma
Choose any two?
3Progress in energy transitions - some Australian and global perspectives
(World Energy
Council, 2016)
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4APERC Conference - Possible Australian Energy Futures
(ACCC, 2017)
Australian residential energy prices index(Australian Energy Statistics Update 2017)
Australian NEM wholesale prices(AER Status of the NEM Report, 2017)
Electricity emissions intensity comparison(shrink that footprint)
International retail electricity price comparison (ACCC Retail Price Competition Inquiry, 2017)Might get none…currently
high NEM wholesale & retail prices,
emissions, although now improving
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If trend is destiny for the Australian
electricity sector
5Progress in energy transitions - some Australian and global perspectives
(Australian Energy Statistics, 2017)
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More recently, RE penetrations growing
6Progress in energy transitions - some Australian and global perspectives
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.. while in South
Australia
7Progress in energy transitions - some Australian and global perspectives
(IEEFA, Power Industry Transition, here and now, 2018)
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Globally
8Progress in energy transitions - some Australian and global perspectives
(IEA, World Energy Statistics, 2018)
(IEA, World Energy Investment, 2018)
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In the short-
term for
Australia
9Progress in energy transitions - some Australian and global perspectives
(AEMO, Generation Information, 2018)
(Clean Energy Regulator, Project database 2018)
(The Australia Institute, 2018)
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Wind + PV projects getting larger, cheaper
10Progress in energy transitions - some Australian and global perspectives
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And globally..according to the IEA
11Progress in energy transitions - some Australian and global perspectives
(IEA, Renewables 2018)
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In the longer term, it dependsIPCC scenarios for avoiding dangerous climate change
12
(IPCC, Fifth Assessment Report, 2015)
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In the longer term? Quick Poll – Q1
▪ What generation mix do you see as more likely for the
Australian NEM in 2040?
– Approaching 80-100% renewables (RE)
– Around 50% RE, 50% coal and gas without Carbon Capture and
Storage (CCS)
– Around 50% RE, 50% coal and gas with CCS
– Around 25% RE, 75% coal and gas without CCS
13Progress in energy transitions - some Australian and global perspectives
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SA
2016
14
Tools for exploring the future
▪ Projections
– Project from current data and historical trends
into the future
▪ Forecasts / predictions
– Add judgements – eg related trends
▪ Scenarios
– Hypothetical alternative futures to help
explore decision making
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Take care with
projections +
forecasts
15Progress in energy transitions - some Australian and global perspectives
Trend is not destiny
Neither is expertise
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What we know keeps changing…
16Progress in energy transitions - some Australian and global perspectives(IRENA, 2017)
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State RE
targets
in the
NEM
17Auctions/tenders vs the RET - costs vs value (Climate Council, 2017)
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Corporate renewable PPAs also a driver
18Auctions/tenders vs the RET - costs vs value
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..and what happens with existing coal fleet?
19Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated System
Plan, 2018)
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Scenarios
for NEM▪ A wide
range to
choose
from
▪ AEMO ISP
likely the
most useful
20Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated System
Plan, 2018)
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21Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated
System Plan, 2018)
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IEA pathways
22Lessons on sustainable electricity industry transition
(IEA World Energy Outlook, 2017)
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Policy still required…
but falling RE costs a growing driver
23Progress in energy transitions - some Australian and global perspectives
(IEA, World Energy Investment, 2018)
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PV’s ultimate scalability.. and battery storage too
24PV in the NEM - large, small or all
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Australian PV▪ Over 80% is ‘rooftop’ PV
▪ World leading residential
PV penetration
▪ ~15% new Residential PV
includes energy storage
25IEA GIVAR Event - Lessons from distributed PV uptake in the Australian NEM
Australia’s residential PV penetration(Finkel Review into NEM Security, 2017)
PV deployment by system size(APVI Live Solar Map, 2018)
(Australian Clean Energy Council, 2018)
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Quick Poll – Q2
▪ What mix of centralised vs distributed generation do you
see as most likely for the NEM in 2040?
– Significantly >50% distributed
– Around 50% distributed
– Around 25% distributed
– Around 10% distributed
26Progress in energy transitions - some Australian and global perspectives
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Key question – where are prices going?
27Progress in energy transitions - some Australian and global perspectives
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Scenarios
for NEM▪ Neutral has
only modest
dx generation
▪ …but do have
a high DER
scenario
28Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated System
Plan, 2018)
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Global perspectives
29Progress in energy transitions - some Australian and global perspectives
(IEA, Renewables 2018)
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Renewable – inherent storage vs variable
30Progress in energy transitions - some Australian and global perspectives
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Variable RE integration challenges
31Progress in energy transitions - some Australian and global perspectives
(IEA, Renewables 2018)
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Quick Poll – Q3
▪ Where will the key energy storage reside in the NEM in
2040?
– As now, coal stockpiles and gas pipelines
– Lots of pumped hydro
– Lots of battery storage
– Stored renewables, concentrating solar power, biomass, hydro
– All of the above
32Progress in energy transitions - some Australian and global perspectives
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Scenarios
for NEM▪ Neutral has
key role for
utility + distrib.
storage
33Progress in energy transitions - some Australian and global perspectives(AEMO, 2018)
(AEMO, Integrated System Plan, 2018)
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Storage to have a key dispatch role
34Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated System Plan, 2018)
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Growing periods of dispatch, ramp challenges
35Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated System Plan, 2018)
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Globally, pumped hydro still dominates but
battery role growth
36Progress in energy transitions - some Australian and global perspectives
(IEA, Renewables 2018)
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RE – synchronous machine vs power
electronics interface
37Progress in energy transitions - some Australian and global perspectives
(photos from Ren21, RE
Global Status Report, 2018)
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Quick Poll – Q4
▪ How much generation will have a power electronics grid
interface in the NEM in 2040?
– As at present, around 10% power electronics interface (PEI)
– Around 25% PEI
– Around 50% PEI
– Around 75% PEI
– Near 100% PEI
38Progress in energy transitions - some Australian and global perspectives
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Falling inertia a growing concern
39Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated System Plan, 2018)
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System strength too
40Progress in energy transitions - some Australian and global perspectives
(AEMO, Integrated
System Plan, 2018)
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Where next?
"The best way to predict your future is to create it!"Abraham Lincoln
“Keep calm..
& carry on”
Thoughtful,
careful, efforts
41 Progres
s in
energy