Blackouts in Australia

More and worse blackouts are on the way for Australians. The reason: aging coal plants. Yeah, I thought it was weird when I read it the first time, too but there it is.

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Australia is installing a heck of a lot of solar, wind, hydro and storage. It is an interesting place to follow in the renewable world.

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On ‎8‎/‎24‎/‎2018 at 6:01 PM, Marina Schwarz said:

More and worse blackouts are on the way for Australians. The reason: aging coal plants. Yeah, I thought it was weird when I read it the first time, too but there it is.

Australia use to have a lot of brown coal plants producing power, where those plants were often built right next to giant pits of brown coal. As a result, power was cheap. Those plants have since closed down in part - note, in part - due to wind power crimpling profit margins in the spot market but also because they were at the end of their operating lives and no-one has built any more. As a result wholesale prices have more or less doubled and the grid network has become considerably less able to cope with major demand events. (On hot days in South Eastern Australia you really, really want an ait conditioner.) Authorities now pay major, industrial users to stay off the grid during those events and keep diesel generators on standby. More renewables are being built but they won't fix these problems without major increases in power storage which is not going to happen inside a decade, if it ever does. No one is building conventional plant because its simply too much of a risk given the rise of looney-green politics. Australia remains a major black coal exporter, incidentally.

Australia will lose more coal/gas plants with only near-useless renewables to replace them. This will not end well.

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Sounds like a whole country is pushing itself into a very bad corner.

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On 9/5/2018 at 9:43 PM, Marina Schwarz said:

Sounds like a whole country is pushing itself into a very bad corner.

their politicians have been pushing the country over the cliff, a country with massive natres and they squander the opportunity to use those in scientifically proven and environmentally safe ways to better the lives of Australians. As stated somewhere in this discussion, they are exporting a lot of goal and also gas... shale gas and gas extracted from CBM that is being exported to Asian and other countries in the form of LNG. If they developed more efficient and cleaner coal fired power plants that would reduce emissions (and capture CO2 for other industrial purposes) , combined with more gas fired plants and or cogens they would have a manageable and sustainable electricity supply without breaking the  bank. They can manage the exports of these resources and also use them for their own consumption for power gen.

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My is Shakiru Adebayo the manager of Amu & Mul Nigeria Limited, we crude oil suppliar of any grade that good for your refinery

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As an australian i feel obliged to comment here.

The reason we still get black outs in this day and age is that we did not invest enough in new power generation and we have been progressively shutting down old power plants that have expired their designed service life. 

Recently in NSW, the government offered an incentive package to the company who was running an old coal plant and shut it down. The incentive offered was to keep it open for another 10 years or so but the conpany declined stating high running costs for the more than 40year old plant did not make it a viable option depsite the financial assistance offered.

We are making new investments in renewables -like most countries are- but this cannot be blamed for the outages in that kind of simplicity. What can be blamed is the mismanagement of the implementation- like is always the case when governments and their incompetent non performance based salary staff,  overly content in their cushy jobs with exaggerted benefits, are left to manage the roll out of new and technologically advanced infrastructure. They did not forsee the impending problem of energy shortages in peak demand, nor is there incentive for companies to do business here in that sector due to high labour costs, bureaucracy and red tape.

Australia is one of the greatest countries in the world- if you havnt travelled you need to see it for yourself, but we do have a few key issues which go beyond the scope of this discussion which id love to change and make it even better. The crux of it is we have too much bureaucratic redtape and industry policing which makes it difficult to get anything done here nevermind make a profit- hence all our best talent leaves for greener business pastures and where good ideas are embraced and allowed to flourish...

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On 9/6/2018 at 11:43 AM, Marina Schwarz said:

Sounds like a whole country is pushing itself into a very bad corner.

Oz has huge quantities of LNG exports to other countries.

But Oz still wants to import foreign LNG for domestic usage, due to energy shortages.

 

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This is the energy revolution of the 21th century, expensive renewable energy sources without any analysis about storage or base load power capabilities despite having of the largest uranium reserves all it's politicians think that they will solve everything with windmills and solar panels

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1 hour ago, Sebastian Meana said:

This is the energy revolution of the 21th century, expensive renewable energy sources without any analysis about storage or base load power capabilities despite having of the largest uranium reserves all it's politicians think that they will solve everything with windmills and solar panels

Yeah, good luck with that.

So far, I still haven't seen any energy solutions that beat the bang for the buck of hydrocarbons.  It's like distilled sunlight for energy.

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On 8/26/2018 at 5:16 AM, Refman said:

Australia is installing a heck of a lot of solar, wind, hydro and storage. It is an interesting place to follow in the renewable world.

Here is an interesting article that seems to show a fairly unbiased picture of the initiatives Australia is taking, or what the various parties are proposing.  One thing is for sure: they show some impressive data in support of renewable energy.  There are opinions presented with a view towards consumers, government factions, industrial magnates and even Tesla, so it is a pretty good summary, I think.  Normally, I don't care much for the skewed information presented in the media, but this one seems to be well researched and minimally biased.  What do you think?

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3 hours ago, Tom Kirkman said:

Oz has huge quantities of LNG exports to other countries.

But Oz still wants to import foreign LNG for domestic usage, due to energy shortages.

 

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Hi Tom.  Hope you are feeling better down under today 😀 (for readers: this is not a reference to Down Under, as related to Australia).

If you would be so kind, could you cite references to your comment?

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16 minutes ago, Dan Warnick said:

Hi Tom.  Hope you are feeling better down under today 😀 (for readers: this is not a reference to Down Under, as related to Australia).

If you would be so kind, could you cite references to your comment?

Heh heh, thanks Dan.  Clear beverages of a refreshing nature have no carbs, and I faithfully stuck to my low carb keto diet last night  : )

And here's a reference about Oz importing LNG:

LNG import plan for South Australia targets first gas in mid-2020

MELBOURNE, July 23 (Reuters) - A private firm is looking to import liquefied natural gas (LNG) to South Australia starting in 2020, around the same time as two other proposed import projects, looking to fill a supply gap as domestic gas gets sucked into LNG exports.

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49 minutes ago, Tom Kirkman said:

Yeah, good luck with that.

So far, I still haven't seen any energy solutions that beat the bang for the buck of hydrocarbons.  It's like distilled sunlight for energy.

New wind is coming in at less than 3 cents (American) per kilowatt hour. A 1GW-h battery with an expected 20 year virtually maintenance free life span comes in at around $500 million INSTALLED. Name one fossil fuel source that can compete with that.

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6 minutes ago, Bill the Science Nerd said:

New wind is coming in at less than 3 cents (American) per kilowatt hour. A 1GW-h battery with an expected 20 year virtually maintenance free life span comes in at around $500 million INSTALLED. Name one fossil fuel source that can compete with that.

Interesting.  Link?

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(edited)

1 hour ago, Tom Kirkman said:

And here's a reference about Oz importing LNG:

LNG import plan for South Australia targets first gas in mid-2020

Thanks, Tom.  Unfortunately it is articles like this one that make me believe somebody, maybe lots of somebodies, are jockeying to get to the public trough, and not enough people are paying attention and connecting the dots.

The lead paragraph does not say why the date of 2020 is even relevant, other than to say that that is "around the same time as two other proposed import projects, looking to fill a supply gap as domestic gas gets sucked into LNG exports."  What supply gap?  How is domestic gas getting sucked into exports?

Then we find that "Venice Energy, set up by former BHP Billiton executives, plans to submit a development application to the South Australian government within the next month to park a floating storage and regasification unit (FSRU) in Port Adelaide..".  Why did these former executives think it was a good idea to pump, presumably, large sums of their own money into this "project"?  Could it be that they think they will profit from these projects?  Obviously, and that's ok, but is the project necessary?  I don't know, because the article doesn't tell us why the project is really needed.

Further, “And then we could have first gas into the South Australian market by June/July 2020,”  Wonderful, that's settled then.  But WHY?

Then we find out that Venice Energy is not the only group with a "plan".  There is also AGL energy and a group called Australian Industrial Energy, backed by top Japanese LNG importer JERA (my emphasis added), to import the superchilled fuel to the states of Victoria and New South Wales.

Now we finally get to a statement that seems telling, and yet vague as all get out: "Gas prices have soared there as domestic supply has been piped into LNG export plants in Queensland."  That reads like there are already shortages due to supply being diverted to export plants.  Are there shortages?  Read the next paragraph.

Then they tell us "At the same time, the dominant gas supplier to those states, ExxonMobil Corp, has also said it was considering importing LNG to Victoria."  This is followed immediately with "All are pushing ahead despite a recent report by Australia’s energy market operator saying it no longer expects a gas shortfall in southeastern Australia before 2030."!!  What's going on here?  I mean, if they have pipeline supply, and assuming that the pipeline supply can be increased with proper investment over the next 12 years, are they even sure there will be a shortfall, or are they estimating a shortfall based solely on existing capacity?  The article does not let us in on this pesky detail, like so many other details left out of this article.

Lastly, they tell us another seemingly telling bit of information "However, Venice Energy’s Winter-Dewhirst said given the costs of piping gas across long distances in Australia, his company might be able to work out gas swaps with AGL’s LNG project." (completely out of his company's good will and concern for the community.)  “They’re complementary in some ways,” he said.  Are those costs higher than the A$750-800 million?  I guess Jack or Jill Public shouldn't bother him or herself with another pesky detail like that.

Edited by Dan Warnick
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(edited)

1 hour ago, Bill the Science Nerd said:

Ok, now let's look at the renewable's side of this argument, as evidenced by the brilliant first article linked to above.  Again, I'm no expert so my take on this article could be wrong.

The article starts out in a way that sure makes me optimistic!  I'm sure glad they're working this out.  2 cents per kWh, eh?  Technology and cost reductions, eh?  That's what I want to hear!  Heck, at this rate it will be free soon enough.

But wait, oh no,  “Wind energy prices ­– ­particularly in the central United States, and supported by federal tax incentives (my emphasis added) – remain at all-time lows, with utilities and corporate buyers selecting wind as a low-cost option,”  Exactly how much are these federal tax incentives?  What do they add up to in $/kWh?

Then we learn that "the DoE also found that bigger wind turbines are enhancing wind project performance with increased capacity at lower prices, serving to only solidify the value of wind energy as a dominant player in the energy mix. With increased development and innovation comes lower wind turbine pricing which, in turn, continues to drive down the installed cost of wind farms. According to the report, wind turbine equipment prices fell to between $750/kW to $950/kW, which are pushing down project-level costs. As such, the average installed cost of wind projects in 2017 across the US was $1,610/kW, down $795/kW from a peak in 2009-10."  So, if we just spend more money on the bigger wind turbines, we'll get even closer to zero cost.  Now where is that trough?  Has there been a tax increase, or a tax $ diversion, in recent years?  Will there need to be one now or in the near future?  Don't know, not stated.

But then we see "Continued strong growth in wind capacity is anticipated in the near term,” thanks in part to federally available tax incentives. As such, various forecasts for US wind power capacity additions range from 8 gigawatts (GW) to 11 GW per year between 2018 and 2020, before a generally-agreed-upon market-contraction beginning in 2021 as tax incentives are phased out."  Aha, now we see where the trough is.

As with the article about the gas import/export questions in Australia, neither article makes me want to trust any of these characters.  The only seemingly similar fact is that the public is going to get stuck paying for the government subsidies whether they go with gas, renewables or both, and there are companies standing by to do their patriotic best to get to the trough, er, to help the country and the people.

Edited by Dan Warnick
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Seriously, renewable subsidies pale in comparison to fossil fuel, even before figuring in externalities like health impacts and climate change. Fossil fuels, unsubsidized, wouldn't even come close to being competitive unsubsidized with wind or solar. Most people know where the trough really is.

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20 minutes ago, Bill the Science Nerd said:

Seriously, renewable subsidies pale in comparison to fossil fuel, even before figuring in externalities like health impacts and climate change. Fossil fuels, unsubsidized, wouldn't even come close to being competitive unsubsidized with wind or solar. Most people know where the trough really is.

That may be.  I do remain convinced that we need both and we need to continue with wise development of both.  The only things that bother me are that a) much of the debate seems largely driven by investors and emotions, on both sides, and b) the fact that huge sums of public money is thrown at both of them by bureaucrats that are, at least sometimes, ill-informed at best or biased at worst.  Just my opinion.

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Agree with what you are saying here. Pull subsidies for both and let the markets figure it out. Yes, despite the increasing negatives of fossil fuel use, it is still highly beneficial until renewables can pick up the slack. It will happen faster than most people expect, but we cannot just turn off the coal plants tomorrow, as much as I would like to.

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13 hours ago, Bill the Science Nerd said:

Agree with what you are saying here. Pull subsidies for both and let the markets figure it out. Yes, despite the increasing negatives of fossil fuel use, it is still highly beneficial until renewables can pick up the slack. It will happen faster than most people expect, but we cannot just turn off the coal plants tomorrow, as much as I would like to.

Atleast you have a sense of reality and common sense about not turning off coal fired power plants.

I am not sure what your personal experience and or investment portfolio is or any other direct involvement in O&G operations is, but from my personal  experience of over 35 years in the industry as a direct investor, operator, e&p side -upstream from all aspects , midstream and downstream and in trading/shipping and logistics plus banking and finance across the globe, I disagree strongly with the notion of "subsidies" specifically directed towards the O&G industry. O&G is one of the industries I am directly involved with but my experience in various aspects of r&d, finance, manufacturing, marketing, sales, global trade etc also includes healthcare, pharma, biomed, biotech, renewable liquids fuels such as algae and non food crop derived biofuels among others. The O&G industry uses the same basic methodologies and accounting practices for taxes and deductions as provided by the tax code to all the other dozens of industries. Nothing special.

Yes I agree if we want to have a fair playing grounds for all, then lets do away with every deduction for business operations , expenses etc that exist in the tax code for businesses and corporations and lets also do away with all the deductions provided to individuals and joint tax filers as well. Let us all pay a flat tax regardless of income and or status (single, married), remove all deductions and credits for having children, for mortgages, interests and what nots.

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4 hours ago, ceo_energemsier said:

Atleast you have a sense of reality and common sense about not turning off coal fired power plants.

I am not sure what your personal experience and or investment portfolio is or any other direct involvement in O&G operations is, but from my personal  experience of over 35 years in the industry as a direct investor, operator, e&p side -upstream from all aspects , midstream and downstream and in trading/shipping and logistics plus banking and finance across the globe, I disagree strongly with the notion of "subsidies" specifically directed towards the O&G industry. O&G is one of the industries I am directly involved with but my experience in various aspects of r&d, finance, manufacturing, marketing, sales, global trade etc also includes healthcare, pharma, biomed, biotech, renewable liquids fuels such as algae and non food crop derived biofuels among others. The O&G industry uses the same basic methodologies and accounting practices for taxes and deductions as provided by the tax code to all the other dozens of industries. Nothing special.

Yes I agree if we want to have a fair playing grounds for all, then lets do away with every deduction for business operations , expenses etc that exist in the tax code for businesses and corporations and lets also do away with all the deductions provided to individuals and joint tax filers as well. Let us all pay a flat tax regardless of income and or status (single, married), remove all deductions and credits for having children, for mortgages, interests and what nots.

No you cant do that! - There would be mass unemployment of all the bean counters and other bureaucrats, entire industries would disappear including accountants, tax lawyers, book keepers etc etc... The amount of people out of work would be enough to loose an election...  No we couldnt possibly have a simple debits/credits electronic tax system for all transactions routed through a bank account and some simple laws to effectively close the doors on the infinitesimally small cash economy.... no this will simply not do! :)

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7 hours ago, ceo_energemsier said:

I disagree strongly with the notion of "subsidies" specifically directed towards the O&G industry.

Outside reviewers found roughly $20 billion in direct subsidies to fossil fuels and only $5 billion for renewables. A good example is the massive tax break Oklahoma gave oil and gas producers last year to try to spur investment. 

https://www.vox.com/energy-and-environment/2017/10/6/16428458/us-energy-coal-oil-subsidies

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On 9/9/2018 at 8:47 AM, Tom Kirkman said:

Oz has huge quantities of LNG exports to other countries.

But Oz still wants to import foreign LNG for domestic usage, due to energy shortages.

 

images.jpeg

Just shows how weak the politicians were for not specifying x % of gas for the local grid in the licensing. 

I reckon big brown envelopes a plenty😉

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