The underlying issue is the fundamental change in energy solutions. As I pointed out in my previous column, we are moving away from investment by governments and large businesses in big power stations and centralised supply, and towards a distributed, diversified and more complex energy system. As a result, there is a growing focus on “behind the meter” technologies that save, store or produce energy.
What this means is that anyone who does not have access to capital, or is uninformed, disempowered or passive risks being disadvantaged – unless governments act.
The reality is that energy-efficient appliances and buildings, rooftop solar, and increasingly energy storage, are cost-effective. They save households money through energy savings, improved health, and improved performance in comparison with buying grid electricity or gas. But if you can’t buy them, you can’t benefit.
In the past, financial institutions loaned money to governments or big businesses to build power stations and gas supply systems. Now we need mechanisms to give all households and businesses access to loans to fund the new energy system.
Households that cannot meet commercial borrowing criteria, or are disempowered – such as tenants, those under financial stress, or those who are disengaged for other reasons – need help.
Governments have plenty of options.
They can require landlords to upgrade buildings and fixed appliances, or make it attractive for them to do so. Or a bit of both.
They can help the supply chain that upgrades buildings and supplies appliances to do this better, and at lower cost.
They can facilitate the use of emerging technologies and apps to identify faulty and inefficient appliances, then fund their replacement. Repayments can potentially be made using the resulting savings.
They can ban the sale of inefficient appliances by making mandatory performance standards more stringent and widening their coverage.
They can help appliance manufacturers make their products more efficient, and ensure that everyone who buys them know how efficient they are.
To expand on the last suggestion, at present only major household white goods, televisions and computer monitors are required to carry energy labels. If you are buying a commercial fridge, pizza oven, cooker, or stereo system, you are flying blind.
The Finkel Review made it clear that the energy industry will not lead on this. It clearly recommends that energy efficiency is a job for governments, and that they need to accelerate action.
It’s time for governments to get serious about helping everyone to join the energy transition, not just the most affluent.
Together, PV and wind represent 5.5% of current energy generation (as at the end of 2016), but crucially they constituted almost half of all net new generation capacity installed worldwide during last year.
It is probable that construction of new coal power stations will decline, possibly quite rapidly, because PV and wind are now cost-competitive almost everywhere.
Hydro is still important in developing countries that still have rivers to dam. Meanwhile, other low-emission technologies such as nuclear, bio-energy, solar thermal and geothermal have small market shares.
This is double to triple the rate of recent years, and a welcome return to growth after several years of subdued activity due to political uncertainty over the RET.
If this rate is maintained, then by 2030 more than half of Australian electricity will come from renewable energy and Australia will have met its pledge under the Paris climate agreement purely through emissions savings within the electricity industry.
To take the idea further, if Australia were to double the current combined PV and wind installation rate to 6GW per year, it would reach 100% renewable electricity in about 2033. Modelling by my research group suggests that this would not be difficult, given that these technologies are now cheaper than electricity from new-build coal and gas.
Renewable future in reach
The prescription for an affordable, stable and achievable 100% renewable electricity grid is relatively straightforward:
Use mainly PV and wind. These technologies are cheaper than other low-emission technologies, and Australia has plenty of sunshine and wind, which is why these technologies have already been widely deployed. This means that, compared with other renewables, they have more reliable price projections, and avoid the need for heroic assumptions about the success of more speculative clean energy options.
Distribute generation over a very large area. Spreading wind and PV facilities over wide areas – say a million square kilometres from north Queensland to Tasmania – allows access to a wide range of different weather, and also helps to smooth out peaks in users’ demand.
Build interconnectors. Link up the wide-ranging network of PV and wind with high-voltage power lines of the type already used to move electricity between states.
Fossil fuel generators currently provide another service to the grid, besides just generating electricity. They help to balance supply and demand, on timescales down to seconds, through the “inertial energy” stored in their heavy spinning generators.
But in the future this service can be performed by similar generators used in pumped hydro systems. And supply and demand can also be matched with the help of fast-response batteries, demand management, and “synthetic inertia” from PV and wind farms.
Abundant anecdotal evidence suggests that wind and PV energy price has fallen to A$60-70 per MWh this year as the industry takes off. Prices are likely to dip below A$50 per MWh within a few years, to match current international benchmark prices. Thus, the net cost of moving to a 100% renewable electricity system over the next 15 years is zero compared with continuing to build and maintain facilities for the current fossil-fuelled system.
Gas can no longer compete with wind and PV for delivery of electricity. Electric heat pumps are driving gas out of water and space heating. Even for delivery of high-temperature heat for industry, gas must cost less than A$10 per gigajoule to compete with electric furnaces powered by wind and PV power costing A$50 per MWh.
Importantly, the more that low-cost PV and wind is deployed in the current high-cost electricity environment, the more they will reduce prices.
Then there is the issue of other types of energy use besides electricity – such as transport, heating, and industry. The cheapest way to make these energy sources green is to electrify virtually everything, and then plug them into an electricity grid powered by renewables.
A 55% reduction in Australian greenhouse gas emissions can be achieved by conversion of the electricity grid to renewables, together with mass adoption of electric vehicles for land transport and electric heat pumps for heating and cooling. Beyond this, we can develop renewable electric-driven pathways to manufacture hydrocarbon-based fuels and chemicals, primarily through electrolysis of water to obtain hydrogen and carbon capture from the atmosphere, to achieve an 83% reduction in emissions (with the residual 17% of emissions coming mainly from agriculture and land clearing).
Doing all of this would mean tripling the amount of electricity we produce, according to my research group’s preliminary estimate.
But there is no shortage of solar and wind energy to achieve this, and prices are rapidly falling. We can build a clean energy future at modest cost if we want to.
Household energy use is a significant contributor to global carbon emissions. International policy is firmly moving towards technology-rich, low- and near-zero-energy homes. That is, buildings designed to reduce the need for additional heating, cooling and lighting. They use efficient or renewable energy technology to reduce the remaining energy use.
But what about the experiences of people who live in homes of this standard? Are these homes comfortable, easy to operate, and affordable? Do people feel confident using so-called smart energy technology designed for low energy use? What support systems do we need to help people live in low-energy, low-carbon houses?
We worked with other Australian and UK researchers to understand what it’s like to live in purpose-built low-energy housing. As part of this project, researchers from Sheffield Hallam University and the University of Salford in the UK visited South Australia to collect data from Lochiel Park Green Village, one of the world’s most valuable living laboratories of near-zero energy homes.
Lochiel Park’s 103 homes were built in the mid-2000s to achieve a minimum of 7.5 energy efficiency stars. They’re purpose-built to be a comfortable temperature year-round, and are packed with a solar photovoltaic system, solar hot water, a live feedback display to show households their energy use, plus a range of water- and energy-efficient appliances and equipment. Combined, these systems reduce both annual and peak energy demand, and supply much of that energy at a net zero-carbon impact.
To reciprocate, we spent several weeks investigating similar examples of niche low-energy housing developments in the Midlands and the North of England. We listened to the stories of people living in low energy homes, who experience the difference on a daily basis, and from season to season. They help us look beyond the dollars saved or percentage of emissions reduced; for them the impact of low-energy homes is personal.
This research provides new insights into the relationship between people, energy technologies and low-carbon buildings. For example, one elderly householder told us that moving into a dry and warm low-energy home allowed their grandchildren to come and stay, completely changing their life, and the life of their family.
Low-energy homes create a wide range of physical and mental changes. Several households spoke about health improvements from higher indoor air quality. Even the idea of living in a healthier and more environmentally sustainable home can prompt lifestyle changes – one woman in her mid-50s told us she gave up smoking after moving into her low-energy house because she felt her behaviour should match the building’s environmental design. She also shortened the length of her showers, reduced her food wastage, and lowered her transport use by visiting the supermarket less often.
Purpose-built low-energy homes also give economic empowerment to low-income households. One household told us that savings on energy bills let them afford annual family holidays, even overseas. This economic benefit matches our findings in other Australian examples.
As researchers, we might dismiss this as a macro-economic rebound effect, voiding many of the energy and environmental benefits. But to that household the result was a closer and stronger family unit, able to make the types of choices available to others in their community. The benefits in mental and physical wellbeing are real, and more important to that family than net carbon emission reductions.
Although international policy is firmly moving towards technology-rich, low-energy homes, our research shows that not all technology is user-friendly or easy to understand. For example, some households were frustrated by not knowing if their solar hot water system was efficiently using free solar energy, or just relying on gas or electric boosting. Design improvements with better user feedback will be critically important if we are to meet people’s real needs.
This research highlights the importance, in the transition to low-energy and low-carbon homes, of not forgetting the people themselves. Improving real quality of life should be the central focus of carbon-reducing housing policies.
Our new ClimateWorks Australia report, released today, shows that the electricity sector needs to deliver a much greater cut than the 28% emissions reduction modelled in the Finkel Review if Australia is to meet its overall climate target for 2030.
When Australia’s energy ministers meet this Friday to discuss (among other things) the Finkel Review released last month, they will hopefully consider its recommendations for the electricity sector in the broader context of developing a long-term national climate policy.
According to our analysis, the electricity sector should cut emissions by at least 45% by 2030, as part of a move towards net zero emissions by 2050. This is well beyond current government policies, but is crucial if Australia is to meet its climate obligations in an economically responsible way.
Our analysis suggests that the electricity sector will need do a larger share than other sectors of the economy, because it has more technical potential to do so and can support emissions reductions in other sectors. In practice, reaching net zero emissions means shifting from coal and other fossil fuels to zero- or near-zero-carbon energy sources such as renewable electricity and bioenergy. Coal or gas will only be feasible if fitted with carbon capture and storage. Achieving near zero-emissions electricity is a key step in the transition to a net zero-emissions economy, not least because of the future importance of electrically powered transport.
The good news is that our previous research has shown that this is achievable with existing technologies, thanks to Australia’s rich renewable resources.
If the impact of existing policies (such as the National Energy Productivity Plan, the phase-down of hydroflurocarbon emissions, and state renewable energy targets) are taken into account in the projections, emissions could drop to 531Mt CO2e in 2030. This still leaves an 82-megatonne gap to reach even the minimum emissions reduction target of 26% percent below 2005 levels.
However, should the electricity sector only make a 28% reduction in its emissions, in line with the Finkel analysis, then it would only reduce emissions by 6Mt CO2e beyond current policies, leaving most of the effort of reducing emissions to other sectors such as buildings, transport, industry, waste and land management, where cutting carbon is likely to be significantly more expensive.
To reach this level of emissions reductions in the land sector, for instance, we would need to increase forest planting by more than three times the amount estimated to be delivered by the federal government’s Emission Reduction Fund in 2018, its peak year.
In its defence, the Finkel Review focused exclusively on the electricity sector and its analysis did not look at the impact that limited change in this sector would have on the required effort from other parts of the economy.
We therefore modelled various other scenarios, including one in which the share of renewables increases from 40% to 50% by 2030. This could enable the electricity sector to achieve double the carbon reductions delivered by efforts in line with the Finkel review.
Like the Finkel Review, our report recommends that the federal government defines a specific emissions-reduction policy for the electricity sector, which in Finkel’s case was the Clean Energy Target. This will help to ensure a smooth shift to reliable, affordable, low-carbon energy.
Our report outlines the key principles that Australian governments need to consider in order to make effective decisions on climate change policy, with a view to achieving net zero emissions by mid-century.
These include providing clear long-term direction to support the industry’s investment decisions, and ensuring that decision-making to 2030 is compatible with reaching net zero emissions by 2050.
Climate policy should also be flexible so that it can be scaled up to meet future targets and allow a range of solutions, including the uptake of emerging technologies to make the transition faster and cheaper.
Given that net zero emissions is the ultimate goal, we need to move faster and achieve greater emissions reductions by 2030 to help deliver a fully decarbonised electricity system, on time and on budget.
Last Friday, world-famous entrepreneur Elon Musk jetted into Adelaide to kick off Australia’s long-delayed battery revolution.
The Tesla founder joined South Australian Premier Jay Weatherill and the international chief executive of French windfarm developer Neoen, Romain Desrousseaux, to announce what will be the world’s largest battery installation.
The battery tender won by Tesla was a key measure enacted by the South Australian government in response to the statewide blackout in September 2016, together with the construction of a 250 megawatt gas-fired power station.
The project will incorporate a 100MW peak output battery with 129 megawatt hours of storage alongside Neoen’s Hornsdale windfarm, near Jamestown. When fully charged, we estimate that this will be enough to power 8,000 homes for one full day, or more than 20,000 houses for a few hours at grid failure, but this is not the complete picture.
The battery will support grid stability, rather than simply power homes on its own. It’s the first step towards a future in which renewable energy and storage work together.
How Tesla’s Powerpacks work
Tesla’s Powerpacks are lithium-ion batteries, similar to a laptop or a mobile phone battery.
In a Tesla Powerpack, the base unit is the size of a large thick tray. Around sixteen of these are inserted into a fridge-sized cabinet to make a single Tesla “Powerpack”.
With 210 kilowatt-hour per Tesla Powerpack, the full South Australian installation is estimated to be made up of several hundred units.
To connect the battery to South Australia’s grid, its DC power needs to be converted to AC. This is done using similar inverter technology to that used in rooftop solar panels to connect them to the grid.
A control system will also be needed to dictate the battery’s charging and discharging. This is both for the longevity of battery as well to maximise its economic benefit.
For example, the deeper the regular discharge, the shorter the lifetime of the battery, which has a warranty period of 15 years. To maximise economic benefits, the battery should be charged during low wholesale market price periods and discharged when the price is high, but these times are not easy to predict.
More research is needed into better battery scheduling algorithms that can predict the best charging and discharging times. This work, which we are undertaking at Monash Energy Materials and Systems Institute (MEMSI), is one way to deal with unreliable price forecasts, grid demand and renewable generation uncertainty.
The battery and the windfarm
Tesla’s battery will be built next to the Hornsdale wind farm and will most likely be connected directly to South Australia’s AC transmission grid in parallel to the wind farm.
Its charging and discharging operation will be based on grid stabilisation requirements.
This can happen in several ways. During times with high wind output but low demand, the surplus energy can be stored in the battery instead of overloading the grid or going to waste.
Conversely, at peak demand times with low wind output or a generator failure, stored energy could be dispatched into the grid to meet demand and prevent problems with voltage or frequency. Likewise, when the wind doesn’t blow, the battery could be charged from the grid.
The battery and the grid – will it save us?
In combination with South Australia’s proposed gas station, the battery can help provide stability during extreme events such as a large generator failure or during more common occurrences, such as days with low wind output.
At this scale, it is unlikely to have a large impact on the average consumer power price in South Australia. But it can help reduce the incidence of very high prices during tight supply-demand periods, if managed optimally.
For instance, if a very hot day is forecast during summer, the battery can be fully charged in advance, and then discharged to the grid during that hot afternoon when air conditioning use is high, helping to meet demand and keep wholesale prices stable.
More importantly, Tesla’s battery is likely to be the first of many such storage installations. As more renewables enter the grid, more storage will be needed – otherwise the surplus energy will have to be curtailed to avoid network overloading.
The South Australian Tesla-Neoen announcement is just the beginning. It is the first step of a significant journey towards meeting the Australian Climate Change Authority’s recommendation of zero emissions by at least 2050.
While there are now more solar panels in Australia than people, the many Australians who live in apartments have largely been locked out of this solar revolution by a minefield of red tape and potentially uninformed strata committees.
In the face of these challenges, Stucco, a small co-operative housing block in Sydney, embarked on a mission to take back the power. Hopefully their experiences can serve as a guide to how other apartment-dwellers can more readily go solar.
From an energy perspective, Stucco was a typical apartment block: each of its eight units had its own connection to the grid and was free to choose its own retailer, but was severely impeded from choosing to supply itself with on-site renewable energy.
Things changed in late 2015 when the co-op was awarded an Innovation Grant from the City of Sydney with a view to becoming the first apartment block in Australia to be equipped with solar and batteries.
A central part of Stucco’s plan was to share the locally produced renewable energy by converting the building into an “embedded network”, whereby the building has a single grid connection and manages the metering and billing of units internally.
Such a conversion seemed like an ideal solution for solar on apartments, but turned into an ideological battle with the electricity regulator that took months and hundreds of hours of pro bono legal support to resolve.
In this way the Stucco project grew to embody the struggle at the heart of the Australian electricity market: a battle between choice and control, between current regulations that mandate consumers to choose between incumbent retailers, and the public’s aspirations for green self-sufficiency.
A chicken and egg problem
Embedded networks have been around for decades. Yet if the Australian Energy Regulator had its way, they would be banned as soon as possible.
The reason for this is that they inhibit consumers’ choice of retailer: consumers are forced to buy their electricity from the building’s embedded network management company, which may exploit its monopoly power.
Yet it doesn’t have to be this way. At least one company in Germany allows apartment residents to buy power either from their preferred grid retailer or from the building’s solar-powered embedded network. This business model relies on Germany’s smart meter standards that ensure all market participants can access the data they require.
We currently find ourselves in a standoff. The regulator is waiting on companies to offer solar powered embedded networks that include retail competition, while companies are waiting on the regulator to create an accessible playing field that would make such services viable.
The recently released Finkel Report touches on this by recommending a “review of the regulation of individual power systems and microgrids”.
Stucco’s bespoke solution
In the absence of such a solution, Stucco made a unique agreement with the regulator: the co-op committed to cover fully the costs of installing a grid meter for any unit whose occupant wishes to exit the embedded network in the future.
Such a commitment was feasible because Stucco’s residents, as co-op members, have direct input into the management of the network including controlling prices (that are mandated to be cheaper than any grid offer). But it is difficult to image regular strata committees accepting such liabilities.
Embedded networks are therefore not the best general solution for retrofitting solar on apartments, at least not under current regulations. This is unfortunate because they represent the best utilisation of an apartment block’s solar resource (Stucco’s system provides more than 75% of the building’s electricity) and are therefore increasingly being adopted by developers.
Advice for apartments
The good news for residents of existing apartments is that there are easier routes to installing solar. The even better news is that the cost of solar systems has plummeted (and continues to do so), while retail rates continue to skyrocket, so much so that body corporates are reporting rates of return of 15-20% on their solar investments.
The recommended options for apartments are epitomised by the old adage “keep it simple”. They fall into two categories: a single solar system to power the common area, or multiple smaller systems powering individual units. Which of these is best suited to a particular apartment depends primarily on the building’s size (as a proxy for its energy demand).
For buildings with 1 square metre of sunny roof space per 2m² of floor space (typically blocks up three stories high), it is worth installing a solar system for each unit, as these will typically be well matched to unit’s consumption.
Taller buildings (with less sunshine per apartment) are better off installing a single system for the common area, particularly if this contains power-hungry elements such as elevators or heating and cooling systems.
But here’s the crux: no apartment can install solar without the political support of its strata committee. While this hurdle has historically tripped up many initiatives, increased public awareness has created a groundswell of support. Plus you may need fewer votes than you think.
To improve the chances of overcoming this barrier I have put together a solar-powered apartment pitch deck, available here.
While this article focuses on solar, it is important to remember that the first priority for any building should be to improve energy efficiency, by installing items such as LED lights, modern appliances, and insulation and draft proofing. For advice on these opportunities see the City of Sydney’s Smart Green Apartments website and the Smart Blocks website.
Lastly, adding batteries to an apartment solar system creates extra challenges, for instance fire-prevention planning. But it allows for far greater energy independence and resilience, and a chance to join the future of distributed energy currently being enjoyed by so many of Australia’s non-strata householders.