2 weeks Ago By Giles Parkinson
A major blooper on the amount of wind energy that can be produced in the south west region of the country’s biggest coal state is being blamed for the effective stranding of some of the best and most prospective wind projects in the country. The long-awaited results of the country’s first auction of grid access rights – for the south west renewable energy zone in NSW – were announced this week and confirmed some of the industry’s biggest fears and worst kept secrets. The most significant of these is that there simply isn’t enough grid capacity to unlock many of the best projects in the region from Balranald to Hay and Buronga – and the problem has been sheeted down to an error in the Australian Energy Market Operator’s otherwise much admired Integrated System Plan.
The ISP is the multi-decade blueprint put together by AEMO to guide investments in much needed energy infrastructure, particularly transmission lines, and is focused on the best options to replace Australia’s ageing, increasingly unreliable and highly polluting coal-fired power stations. It is an incredibly detailed document and widely respected, but the ISP also has its weaknesses – all modelling does – and it comes down to the quality of the inputs. And, in the case of the South west REZ, it is about the assumptions made on the wind resource in the mostly flat farming region.
The ISP assumes that the wind resource is not all that strong, with a capacity factor of less than 30 per cent. And it is on the basis of this wrong assumption that the decision was made to build Australia’s biggest transmission project, Project EnergyConnect, with a 330kV transmission line rather than a 500kV line. But the reality is that the anticipated capacity factor of many of the projects proposed in that region is more than 40 per cent.
Yet most of the more than 20 GW of projects may never see the light of day, because the south-west zone – as currently created – doesn’t have the capacity to support them. Among the projects to miss out is the $1.4 billion Junction Rivers project proposed by Windlab, the renewable energy developer which has made a name for itself as an expert wind mapper.
If anyone knows where to find a good wind resource, it is Windlab, originally spun out of the CSIRO and now majority-owned by iron ore billionaire and green energy evangelist Andrew Forrest. Windlab was advised earlier this year that Junction Rivers was not successful in its application for the state-run tender for access rights to the south west REZ, a bitter blow given it was the only project in the REZ to have been successful in the federal government’s first major generation auction under the Capacity Investment Scheme. In February, it wrote to AEMO in response to its latest draft inputs and assumptions consultation document pointing out – yet again – the errors that had been made in assessing the wind resource in that REZ, and others.
“Windlab is concerned that the ISP continues to be highly sensitive to wind capacity factor assumptions, some of which are highly inaccurate,” the company wrote in its submission. It says if the right capacity factors had been adopted, then another 2.6 GW of wind capacity could have been included in the zone.
As it is, only 3.56 GW of capacity has been allocated access rights. Of the four winners announced this week, only Origin Energy’s 1.
46 GW Yanco Delta wind project received allocations for its full capacity, while the other three projects – Pottinger, Dinawan, and Bullawah – had to take a major haircut on their original proposals. Another major renewables developer to miss out is Forrest’s Squadron Energy, which has three major projects in the zone – Conargo, Koorakee, and Gol Gol – with a combined capacity of 2.3 GW of wind, 2 GW of solar, and potentially tens of gigawatt-hours of long duration battery storage.
It also says that AEMO has got the wind resource estimates wrong. “We have found that the current assumed capacity factor of 29% significantly underestimates the wind resource,” Squadron wrote in its . “Independent energy yield assessments for our projects, across a range of scenarios, resulted in capacity factors ranging from 37% to 43%.
” The difference in estimated capacity factors is explained by the different sources used. AEMO makes its calculations using satellite data produced by the CSIRO, but experts say this only gives broad estimates. The detailed findings that give much higher capacity factors come from “anemometers” used by individual developers, and others note that the ISP is not based on the most recent, efficient wind turbines.
AEMO is being urged by the likes of Windlab to incorporate this private data into its inputs and assumptions. Windlab is also seeking to develop the 1.4 GW Bungaban wind project in southern Queensland, and has signed a long-term off-take agreement with Rio Tinto, as part of the mining giant’s plans to guarantee the future of its aluminium smelters and refineries by switching from fossil fuel power supplies to renewables and storage.
But Windlab says the capacity factor estimates in the ISP are selling that project short, suggesting that could limit its ability to be built or operate at full capacity. “For all the reasons above, it is imperative that AEMO allows submission of confidential, high quality wind measurement data to enable calibration of their wind map and wind capacity factor traces,” it says. Indeed, there is now intense pressure on AEMO and government authorities to come up with a solution.
One might be contracting batteries to act as giant shock absorbers (like the Victoria Big Battery and the new Waratah Super Battery) that would allow more capacity to be transported on those transmission lines. There are several companies that appear to be in a position to offer this. Squadron says these batteries could effectively double the carrying capacity of the Project EnergyConnect transmission line from 800 MW to 1.
6 GW, allowing more wind output to be transported to the major load centres. Engie, which is trying to develop the massive The Plains wind and battery project (up to 1,800 MW of wind) agrees that installing two big batteries at either end of the REZ would allow more capacity to be transported across and from the zone at any one time. Laura Caspari, Engie’s head of development, says the company is also looking at attracting data centres to the region, creating a major load base within the zone that would support more generation capacity.
“It reduces the transportation costs of the electron,” Caspari tells Renew Economy. (You can also listen to Caspari discussing the idea in more depth in a of Renew Economy’s Energy Insiders podcast) AEMO is also coming under pressure from numerous parties for a major re-think of the ISP planning, also because some of the proposed REZs face major social licence issues, and because of the blow-out in costs in transmission projects. Some even suggest scrapping the New England REZ (where Barnaby Joyce is leading major opposition, and which faces logistical challenges and potential transmission cost blowouts) and doubling the size of the south-west REZ instead.
Others suggest looking at the opportunities within existing distributed networks, whose owners say hold tens of gigawatts of untapped capacity, and who intend to produce their own “distribution ISP” later this year. Some suggest this could be a vehicle to shift the focus away from wind and transmission – now hostage to soaring civil engineering costs – to solar and battery storage, where technology costs have fallen and largely offset the rise in costs of labour, logistics and planning. Squadron – and others – say that the south west REZ is simply too good a resource to be ignored.
They say it’s not just the strong wind conditions, it is the sparse population, the welcoming communities and the lack of any major social licence issues, and the flat region that makes logistics a lot easier, and a lot cheaper. Squadron includes a number of recommendations to AEMO. One is getting a better handle on the regions’s potential by adjusting its assumptions on land costs, the issues of social licence, and construction and logistics costs – because of the flat topography.
It recommends “virtual transmission” – the shock absorbing batteries – and it also urges AEMO to consider “dynamic ratings” rather than “still air” ratings, allowing for the grid to handle more capacity particularly when the wind blows. Using sensors on the transmission lines can allow this. Squadron suggests a 1m/s (meter per second) wind speed at line level increases power flow by up to 60% for most conductors compared to setting the rating based on ‘still air’.
Experts say that the grid is “more capable than we thought.” Distributed networks have discovered this in the rollout of rooftop solar, and they are now discovering that they can also host tens of gigawatts of large-scale capacity too. Engie’s Caspari says the south-west region’s excellent wind resources, and its strong community support, is too good to ignore.
“The local community around Hay has been fantastic,” she says. “There were no objections to the EIS (environmental impact statement). They were disappointed at missing out (on the grid access tender) and have really encouraged us to keep going.
“How often do you get an area with such a resource? It ticks all those boxes. We have got to find a way to unlock it.”.
