Echoes of one of the great public policy failures of this nation are starting to grow louder.
In the 1850s, the British colonies in Australia chose to build railway networks using three different railway gauges, a folly for which we continue to pay the price.
What actually happened was that in 1850 the British Colonial Secretary recommended the Australian colonies adopt the British “standard gauge” of 4’8.5” and this was agreed by New South Wales, Victoria, and South Australia. Then in 1852, following strong representations from the Colony Engineer-in-Chief, New South Wales decided that they would adopt the “Irish gauge” of 5’3”. The Victorian and South Australian Legislative Councils agreed to follow the “mother colony” by conforming to the change and legislated to this end in 1853.
However, the arrival of a new and fiercely partisan, standard gauge advocating Engineer-in-Chief in NSW meant that the previous Act was repealed in 1855 and that Colony returned to the standard gauge. By then the other colonies had already built a considerable 5’3” track and ordered locomotives and rolling stock. In the words of contemporaries: “the most lamentable engineering disaster in Australia was an accomplished fact.
In 2020, we could be heading down the same path, but this time with our electricity grid.
Australia’s electricity grid was developed as separate state-state based and owned systems during the 1920s and 1930s, utilising each state’s black and brown coal or hydro resources.
In the 1990s the eastern states agreed to join their separate electricity systems into a national grid with partial privatisation of the component generation, transmission, distribution, and retail parts, the whole to be known as the National Electricity Market (NEM). Operationally, the grid remained the same with the exception that new transmission lines were built to join each of the state networks (“Interconnectors”).
But in the last decade, and with increasing velocity, things have started to change dramatically. The whole basis of how our electricity grid operates is transitioning.
Generation is moving from thermal, based on burning coal and gas, to renewables (sun and wind). Transmission is no longer fit for purpose, simply because much of the new renewable generation (plus Snowy 2.0 hydro) is not adequately connected to the existing grid. Distribution will need to change to cope with consumers who are now also generators or energy providers: currently through rooftop solar, but in the future through electric vehicles which will have a two-way relationship with the grid. Further, we will need a new capacity to store much of the renewable electricity generated and renewable generation also lacks the reliability and the technical capacity to provide the transmission stability of the thermal and hydro generators.
The capacity of current or near-future battery technology alone to take on this storage role is questioned by many energy experts but is an act of faith for many who see everything through the prism of climate change, with an immediate end to coal-based electricity as its key solution.
Transmission upgrade is seen as a key step in making the transition work, both in bringing new renewable generation into the grid and in providing wider geographic availability of sun and wind. Indeed, the Labor Party proposes a Rewiring the Nation” plan as part of its solution to the problems of the transition.
The NEM has increasingly been plagued by the limited capacity of the interconnectors between the old state systems. Indeed, some generators have been accused of deliberately withholding output to force prices up in their state. I have personally attended business fora where power plant operators have admitted withholding generation in the direction of the facility managers.
However, some other proposed new transmission is more questionable. The proposed “Project Energy Connect” between South Australia and NSW will, along with the usual claims of lower prices and new jobs, according to SA Energy and Mining Minister Dan van Holst Pellekaan, “stabilise the grid and address its legacy of mass blackouts” (Australian, 15/11/20). Apart from a couple of gas-fired power stations and diesel generators, SA is totally dependent on other states’ systems in the absence of sun and wind. But NSW is itself moving rapidly down the transition path and in the medium term will probably become more dependent on thermal generation from Queensland’s younger generator fleet. There is no doubt SA at times has excess wind generation to export, but will NSW end up in the same boat when the wind isn’t blowing and be unable to supply power even for itself? More sceptical views exist.
And then there is Snowy 2.0. As well as requiring a new transmission connection to the grid, the costs of which were not included in the already ballooning budget, Snowy 2.0 will certainly supply extra grid stability – and storage – needed as we transition to renewables, but this specific project has many critics.
With Snowy 2.0, like most energy transition project announcements, the overwhelming driver seems to be the political optics – and this, rather than the engineering and technical requirements, the basis for the decision.
A significant part of the transition—and one where Australia is a world leader – is the penetration of electricity generated by rooftop solar into distribution networks. What makes rooftop solar challenging is that essentially it is uncontrolled by network operators, and therefore often causes rapid and large power demand fluctuations at distribution substations. The Australian Energy Market Operator (AEMO), in the absence of real-time data, uses 24-hour old demand data to plan its demand profiles but this is often at variance with reality causing AEMO to curtail market-participant generators, driving them into negative price territory. Distribution networks in effect only control voltage, which when at the higher end of a permissible variation, causes solar inverters to switch off, to the annoyance of their owners who won’t get feed-in payments.
As I write this article at noon on 26 November, rooftop solar is feeding 7000 MW into the NEM, while the commercial solar farms are contributing just 2000 MW.
Technologies exist that can make rooftop solar both visible to and controllable by the system operator, but none of the existing authorities have direct responsibility for forcing their installation, and system owners won’t unless there is “a quid in it”.
Most fundamental of all, and despite the absence of direct federal Government policy, the transition is being driven by the need to reduce emissions to zero by 2050, or sooner. As touched on above, the politics and passion of dealing with this issue are massively distorting how we transition our electricity network.
And now, as a consequence of this absence of a clear federal energy plan, we are starting to see the emergence of state-based decision making which threatens the viability of the national whole – just like the railways in the 1850s.
Victoria has legislated to allow itself to go it alone outside of the NEM structures and processes and is pushing ahead with further subsidies for uncontrollable rooftop solar and a new “twice as big as South Australia” battery; NSW has a new, bold 60 percent renewables by 2030 energy plan; and South Australian is over the hill and heading down the other side with a new plan to tax electric vehicles.
In recent weeks there has been a great deal of finger-pointing to and fro between the state and federal governments and between the owners of the various components of the NEM. Much of the argument has been around how the “market” will or should work as we transition.
However, what is lacking in all of the blather is a clearer focus on the technical problems and the long term outcomes of the various possible solutions. At the end of the day, electrons will trump dollars and if we don’t get how the electrons move right, once again we will be getting out of our sleeper car beds in the middle of the night at Albury station.
In the 1850s, it took around twelve months to communicate with the authorities who had final responsibility for coordinating a uniform Australian railway gauge – the British Government in London.
Today, the ultimate responsibility for national projects lies with the national government in Canberra. The failures of the Abbott/Turnbull/Morrison Governments to come up with a national plan for energy transition will have generations of engineers rolling in their graves.
Amidst the welter of puffery and misplaced passion in this sector, it is still possible to find information that is understandable and appears relatively unbiased. Articles by former Clean Energy Council and Energy Supply Association CEO, Matthew Warren, in the AFR are in this class as is his excellent book, Black Out: how is energy-rich Australia running out of electricity?