In this edition of Queensland Mining and Energy Bulletin we talk to the University of Queensland’s Professor John Foster who works as a Professor of Economics, Director of the Energy Economics and Management Group, and Focal Leader Renewable Energy in the Global Change Institute.
What current projects are you working on at the University of Queensland?
Three major projects: ARC Linkage Project on the Economic Impacts of Wind Penetration (with eight Wind Industry partners), CSIRO Flagship Project on the Future of the Grid and the National Electricity Market, ARENA-funded research on the economic impacts of commercial scale solar PV arrays.
What is the UQ Solar Initiative all about?
Four years ago, we installed the largest rooftop PV array in the southern hemisphere with the support of the Bligh Government. It is still the largest rooftop PV array in Australia. It has generated 7.3 GW hours in 45 months, mitigated 6.95MKg of CO2 and saved UQ about $1 million. It is on-track for an 8-10 year payback.
The data from it is being used by industry, government and research organisations and it has been an important exercise in ‘learning by doing’ through actually installing local generation.
In March, 2015, we launched our Gatton PV Pilot Plant, specifically designed to understand the viability of commercial PV arrays and their impacts on the grid, both locally and nationally, and on the national electricity market. It is a 3.275MW fixed, single axis and dual axis tracker array that includes 37,000 First Solar Cadmium Telluride panels with five centralised SMA inverters on a 10 hectare site.
A Battery Storage Research Station with a 600kWp, 760kWh battery will be installed later this year. In order to do effective research, there is a Bespoke Central Control System, the Gatton Solar Research Facility, the UQ Data Hub, the UQ Power System Research Station and the UNSW Power Systems Interface Laboratory (Real Time Digital Simulator).
All these have been funded by an ARENA Education Investment Fund Infrastructure Project Grant ($40.7m) which is part of the much larger AGL UTILITY Scale PV Project which includes 103MW at Broken Hill and 56MW at Nyngan in New South Wales and is receiving $130M from ARENA and $65M from the New South Wales Government.
We shall also research the impacts of this utility scale project and make comparisons with commercial and residential scale PV installations.
What are your thoughts on Australia’s current energy policy?
Currently there is a political battle going on concerning renewable energy generation, driven by climate change controversy rather than the needs of a power system in transition.
There has been failure to: settle on a longterm carbon policy with the establishment, then abolition, of carbon pricing; there has been uncertainty about the future of the Renewable Energy Target, curtailing investment in both renewable and non-renewable power generation assets; there has been a lack of understanding of the severe impacts, both on profits and power provision, of PV peak-shaving on base-load coal generators, even though these were already understood overseas; there is no coherent policy to promote significant increases in gas generation to diversify power sourcing and to cope with renewal energy variability and there has been poor demand forecasting by the Australian Energy Regulator, with consequent over-investment in the networks of some states and large increases in the retail price of electricity.
The Federal Government has designed the Renewable Energy Target (RET) to ensure that at least 20 per cent of Australia’s electricity comes from renewable sources by 2020, with Bill Shorten recently announcing plans for 50 per cent RET by 2030. Are these RETs achievable?
The RET has been highly beneficial in stimulating the shift of Australia to a more resilient and secure power system. Unlike some statements by Federal Government Ministers, the increase in wind generation has lowered, not increased, wholesale electricity prices. This has been confirmed by a number of studies, including one commissioned by the Federal Government.
Uncertainty concerning the future of the RET has had a severe effect on investment in wind which has not been relieved in the wake of a bipartisan agreement concerning the 2020 target because of adverse political statements by the Prime Minister.
The 50 per cent target is feasible, but the ALP have given no clear indication of the policy strategy required to meet this target. Perhaps the most important issue concerning the RET is the size of the subsidy. As technological advances reduce the unit cost of power, the subsidy should be reduced accordingly, yet this have not been discussed in any detail by policy-makers. Slow and steady change is always preferable to abrupt change of the kind experienced with feed in tariffs.
What do you think is the future of solar power? Do you think coal mining will soon be a thing of the past?
Research shows that advances in solar power generation are moving quickly. The cost of PV panels is likely to fall by 50 per cent over the next three years and inverter technologies are also becoming cheaper.
There is considerable research ongoing globally on cheap power storage solutions and, in about four years, storage of various kinds will be economic enough to enable solar generators to move off grid in certain circumstances. Solar will remain a marginal contributor to power generation over the next decade but continue to have a big impact upon coal generation because of its effect on wholesale electricity prices.
Our modelling suggests that coal generation will be around for some time to come but old, inefficient plants will be closed more quickly and more efficient, lower carbon emitting plants will be invested in, particularly in developing countries where gas generation is not a viable option and renewables cannot provide enough reliable power in large urban areas.
At the Queensland Power and Gas Forum, held in Brisbane in July, you mentioned in your presentation that Queensland is the most solar-efficient state in the country, can you expand on this?
Queensland is a very favourable location for solar generation of all kinds. It receives more than twice the amount of solar energy than Germany which has invested heavily in solar PV. Queensland also has suitable cheap land on which to build solar arrays close to the existing power grid.
To date, Queensland has had, by far, the largest number of residential solar installations. This has much to do with the fact that Queensland has the most favourable solar conditions making investment the most economic for any given subsidy structure. This would also be true if incentives were made available for larger commercial investments which are significantly more cost effective.
It has always been true that Queensland has benefitted greatly from its rich natural resources. So capturing solar energy at commercial and utility scales is a clear next step in the state’s economic development. And the earlier this is done the better so that the required skills and expertise can be gained.
“Our modelling suggests that coal generation will be around for some time to come but old, inefficient plants will be closed more quickly and more efficient, lower carbon emitting plants will be invested in…”