Just because something is cheap to buy, does not mean it will be cheap to own, and just because the sticker price of some renewables is coming down does not mean we can keep adding them without costs. A reliable electricity supply is more than just electrons, and most of our reliability is provided by the dirtiest generators that we need to retire to deal with climate change. We can clean up our electricity supply and maintain reliability provided we use all the technology available to us. Understanding more about ancillary services and the great concentration of greenhouse emissions in a relatively small number of generators in Australia illustrates a likely sensible floor for a nuclear sector in Australia. There is more than enough space for that, as well as a strongly growing renewables sector. We desperately need a sensible centre in our energy discussion that respects the way our system actually operates.
Ancillary adjective : providing necessary support to the primary activities or operation of an organization, system, etc.
Suddenly it seems like everyone is talking about ancillary services.
Ok, that’s an exaggeration. I am sure there are more people talking about the colour of the diving pool in Rio. In my little world of energy though, ancillary services have seemingly gone from nowhere to very interesting.
What the heck are ancillary services? You can read this piece to get a little idea, you can read this from AEMO to get much more of an idea or you can go with this…it’s all the important ingredients in running a reliable electricity system that you don’t know about. It is only one part of the game to provide the right number of megawatt hours in a given hour. The system needs to run at the right frequency, the voltage needs to stay within limits and the system needs to be able to get back up and running again in case of serious failure. That’s all called ancillary services.
So why are we suddenly talking about them? Like most necessary support services, we acknowledge their necessity when they start to go away. In the Australian National Electricity Market, all of the ancillary services for the control of frequency are provided by 116 connected generating units that bid to provide that service; a mixture of coal, gas and hydro electricity units. No solar or wind generators are bidders to provide this service because, at this time, they can’t: they are non-synchronous, non-dispatchable generators.
South Australia has taken on a very large share of wind generation which has contributed to the exit from the market of several dispatchable, synchronous generators. The availability of ancillary services has declined, and our dependence on the rest of the NEM to provide those services has gone up. The latest 2016 Electricity Statement of Opportunities for the National Electricity Market (Australian Energy Market Operator 2016) has led with this issue:
The 2016 NEM ESOO highlights that as intermittent generation (such as wind and rooftop photovoltaic (PV) generation) continues to increase, and thermal synchronous generation (such as coal and gas-fired generation) withdraws:
Total installed generation capacity alone becomes a less reliable indicator of supply adequacy.
Availability of plant to supply energy when needed, and capability to provide ancillary services, are both key factors to consider when assessing opportunities related to secure operations and supply adequacy in the NEM. (AEMO 2016)
The future risk of load shedding is projected to be greatest between 2.00 pm and 8.00 pm, if high demand coincides with low wind and rooftop PV generation, unplanned generation outages, and/or low levels of imports from neighbouring regions (AEMO 2016)
AEMO goes on to highlight that there are credible security risks in future and this situation will exacerbate should Australian fulfil its obligations to cut greenhouse gas emissions, which will require the withdrawal of a lot more synchronous generation in the form of coal-fired power stations.
At the moment we are looking at low-credibility scenarios… but at the moment, we still have a very low penetration of wind and solar in the National Electricity Market overall. Were Victoria, NSW and Queensland to have gone with the penetration of wind that South Australia has achieved (some 40% of total electricity supply)…the situation would be different. This is an early, important warning: just because a generation source is getting cheaper, it doesn’t mean adding more of it is low cost. Just because a generator produces electricity, doesn’t mean the electricity it produces has the same value of what it will displace.
On that note let’s leave South Australia for another high-penetration renewable jurisdiction: Germany. In case you missed it, Germany is telling the world it will run on renewables. Lots of people, (me included) think it will run on fossil and renewables and the actual priority is closing nuclear. But whatever, the point is they have a plan for lots and lots of renewables. So how is the ancillary services situation shaping up?
The German Energy Agency gives us some idea of their thinking with their 2014 Ancillary service study (Deutsche Energie-Agentur GmbH (dena) – German Energy Agency 2014). The study scenario for the year 2033 is, itself, revealing. I have reproduced it below:
|Installed generation capacity in Germany in the study year (total: 259 GW)|
|Lignite||Hard coal||Natural gas||Pumped storage||Others||Onshore wind||Offshore wind||Photovoltaics||Hydroelectric power||Biomas and others|
|12 GW||20 GW||41 GW||11 GW||3 GW||66 GW||25 GW||65 GW||5 GW||11 GW|
The first thing to note is that while nuclear has disappeared there remains 32 GW of coal and 41 GW of gas. That’s what I regard as seriously warped priorities.
The second thing to note is that this scenario retains 28% of installed capacity as synchronous, dispatchable fossil fuels, as part of a grid that is well-connected to surrounding markets. This is hardly a 100% renewable scenario, and Germany is anything but an island in electricity terms. Even in those conditions, the challenge is not lost on them:
Conventional power plants, which today still largely provide the ancillary service products for stable grid operation, will be on-grid for fewer and fewer hours in future. The question as to how the scope and type of these ancillary service products must change to provide the ancillary services frequency control, voltage control, system restoration and system control.
So, what do they find? In summary, they think it is do-able, however it’s amply uncertain in all areas and the planning needs to start now. It will also come at a cost:
The costs for maintaining and providing ancillary service products must be economically bearable both for the system operators and the operators of decentralised energy units and flexible loads. …Further provision of ancillary service products and associated expenses must be made economically viable with a suitable compensation system. Investments and ongoing operating expenditures required on the part of the system operators for secure and stable grid operation in a power supply system with an increasing proportion of renewable energy sources (e.g. grid monitoring and development of system control tools) must be incorporated suitably in the regulatory framework.
Bear in mind, this is just Germany…in a scenario that maintains lots of fossil fuels… connected to several of their neighbours who can provide these services to the grid and currently have no-such plans. This is not 100% renewable Germany and certainly not 100% renewable Europe.
So let’s come back to Australia and the concerns being raised by AEMO. If we act, as we must, to close our coal fired power sector so as to meet our responsibilities to deal with climate change, we will exacerbate, drastically, a problem that is already appearing on the horizon for South Australia as we axe several of the major providers of ancillary services.
AEMO has a point. The chart below illustrates the make-up of Australia’s electricity sector in terms of electricity generation and greenhouse-gas emissions. Note the left y-axis is a log scale (Note also this data is all of Australia, not just the NEM).
This tells us that a really large percentage of both electricity generation and greenhouse gas emissions in Australia’s electricity sector comes from a remarkably small number of locations. To be precise, 50% of the greenhouse gas emissions from the electricity sector in Australia (corresponding to 37% of the electricity generated) comes from just seven locations: Loy Yang Power station and mine (VIC); Eraring Power Station (NSW); Bayswater Power Station (NSW); Yallourn Power Station (VIC); Stanwell Power Station (QLD); Loy Yang B Power Station (VIC).
Those locations have 34 generating units totalling 15,000 MWe, producing 84 million megawatt hours, giving an average capacity factor of 64%. They are also all registered bidders for the provision of ancillary services.
So…riddle me this. If you were concerned about climate change and wanted to slash greenhouse gas emissions from Australia’s electricity sector with the greatest certainty and the least messing about… what would you be looking for?
I would be looking for, at the minimum, 10-15 GW of synchronous, dispatchable supply, capable of providing ancillary services, with high capacity factor, that could be spread across perhaps 7-10 key generating nodes, that didn’t emit greenhouse gas. In other words, I would be looking for a medium-sized sector of electricity generation from fission technologies. Nuclear power.
The remaining 63% of the electricity supply… who knows. Maybe the rational use of nuclear in Australia is higher than 10-15 GW. After all, 85% of our greenhouse gas emissions from electricity come from just 22 locations that provide 70% of our electricity. That’s a remarkably elegant match for the rule of thumb that 30% of supply that can be cost effective with variable renewables, supported by papers such as Ueckerdt, Hirth et al. (2013) and Nikolakakis and Fthenakis (2011). On the other hand we are going to get better at using variable renewables and some of the novel ancillary service solutions may come to fruition. That rule of thumb may have to change.
But to maintain that Australia, or anyone, is going to get the fossil fuels out of the electricity supply without fission technologies is, quite evidently, highly uncertain at best and at worst? It’s hopelessly ideologically rigid or perhaps just incredibly rent-seeking and greedy on the part of the renewables industry. We need much smarter policies to reflect what we actually need in the market place.
No one gave a damn about ancillary services until they started to go away. Now that their absence and future availability is being noticed, hopefully we will better-appreciate just what we need to climb the mountain of decarbonisation. It is clear to me is we are not getting there on wind and solar alone.
Australian Energy Market Operator (2016). 2016 Electricity Statement of Opportunities for the National Electricity Market. Melbourne, Victoria.
Deutsche Energie-Agentur GmbH (dena) – German Energy Agency (2014). Summary of key results of the study “Security and reliability of a power supply with a high percentage of renewable energy”. Berlin, Germany.
Nikolakakis, T. and V. Fthenakis (2011). “The optimum mix of electricity from wind- and solar-sources in conventional power systems: Evaluating the case for New York State.” Energy Policy 39(11): 6972-6980.
Ueckerdt, F., L. Hirth, G. Luderer and O. Edenhofer (2013). “System LCOE: What are the costs of variable renewables?” Energy 63: 61-75.