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Coal-fired power stations in France to be shut by 2021

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The President of France, Emmanuel Macron, has told the World Economic Forum in Davos, Switzerland, that all coal-fired power stations in France will be shut by 2021. Macron’s predecessor, Francois Hollande, had planned to shut down the plants by 2023 but President Macron has decided to move that date forward in an ambitious timeline to help France lead the EU (and the world) on climate issues.

Coal-fired power stations in France

Coal-fired power stations in France to close in 2021- President Emmanuel Macron
Coal-fired power stations in France to close in 2021- President Emmanuel Macron

Although France only produces around 1% of its energy from coal-fired power stations in favour of using nuclear power, President Macron’s commitment to shutting them all down is a great step forward for climate change. In 1960 France had 36.5% of their power generated from dirty coal power stations. They currently generate around 75% of their electricity using nuclear energy due to a long-held policy on energy security, but they have a goal to reduce this percentage to 50% by 2025, with one of the main problems what to do with the radioactive waste. In the Champagne-Ardenne region of eastern France, near the village of Bure, they are talking about storing it deep below ground while the radiation slowly reduces. 

Regardless of the fact that it only represents a very small decrease in coal generated power, Mr Macron called the decision “a huge advantage in terms of attractiveness and competitiveness” in a speech discussing France’s view towards climate change: 

“We should stop opposing on one side productivity, on the other side climate change issues,” he said.

 Compare this to Australia, which had 74.4% coal-fired power stations in 1960 and 63.6% in 2015 (no recent figures, but this should be quite a lot smaller in 2018 due to closures of plants like the Hazelwood power plant early last year and the AGL Energy’s decision to shut down of the Liddell coal-fired power station in 2022). 

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Liddell Power Station To Close in 2022 – AGL Energy

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AGL Energy will be closing the Liddell coal-fired power station in 2022, resulting in a 1000MW shortfall of energy. AGL has an exciting plan to cover this missing amount by using a mix of solar power, wind power, pumped hydro, battery storage, and gas peaking plants over a three-stage period leading up to 2022. 

The Closure of Liddell and its implications

The Turnbull government had asked AGL Energy to consider extending the life of the Liddell power station or selling it to someone else, but it doesn’t seem like that plan is on AGL’s radar. According to the SBS, Energy Minister Josh Frydenberg has asked the AEMO (Australian Energy Market Operator) have a look at AGL’s idea, advising that it is best to “leave the judgement of (the plan’s) merits to the experts”. 

AGL’s plan for solar/wind/pumped hydro/storage and gas peaking plants will cost $1.3b and is expected to provide electricity at $83/MWh for up to 30 years, in contrast to the much higher cost for Liddell. By keeping it open for just an extra five years the cost would be $920 million and it would cost $106/MWh, according to figures stated on the SBS. 

“Obviously it’s a significant proposal, there is a host of new technologies and new investments as part of it,” Mr Frydenberg was quoted in Melbourne on Sunday.

“You need all forms of energy in Australia’s future energy mix, there’s a role for coal there’s a role for gas, there is increasingly a role for wind and solar and for battery storage,” he added.

Liddell Power Station - AGL Energy to close it in 2022
Liddell Power Station – AGL Energy to close it in 2022 (source: wikipedia.org)

This news comes hot on the heels of the closing of the Hazelwood coal-fired power station in Victoria in March this year. Numerous other coal-fired power stations across New South Wales and Victoria are nearing the end of their 50 year lifespans – with two of Victoria’s three coal-fired plants having outages during last February’s hot weather. 

Federal opposition energy spokesman Mark Butler was complimentary of the plan – whether 

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Finkel Report could raise cost of Solar in Australia

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The Finkel Report for National Energy Market security was released last week. Chief Scientist Alan Finkel’s review of the NEM included 50 recommendations, one of which was the implementation of a “generator reliability obligation” which could have serious ramifications for the cost of renewable energy in Australia. The closing of ‘dirty’ coal-fired power plants such as the 1600MW Hazelwood earlier this year has put a large dent in our installed capacity, which has been slowly sinking as we attempt to transition to renewable energy in an attempt to meet our 2030 Renewable Energy Targets (RET).

Finkel Report Australia MW Capacity Energy
Australian Installed Energy Capacity – 2017 Finkel Report

Finkel Report

According to the Sydney Morning Herald, under Finkel’s recommendations, the average household would save $90 per annum on their electricity bills over the decade from 2020-2030. This would be through the implementation of Finkel’s ‘Clean Energy Target’ – as opposed to a ‘business as usual’ situation. The report, which you can read by clicking here, notes that the value of Australia’s wholesale electricity market trades $11.7 billion. There are 9.6 million metered customers and, with rapidly increasing electricity prices it is obvious that something needs to be done. Balancing the price of wholesale electricity and the reliability of the grid whilst trying to meet climate change obligations is a very tricky and delicate process.

In an attempt to mitigate this, there are some repercussions for solar. The “Generator Reliability Obligation” and some changes to new wind and solar plants could pose serious problems for the next 10 years of renewable energy in Australia. Firstly, Finkel advised that plants be equipped to provide voltage and frequency response, which is reasonable. But the big one is a very controversial recommendation that individual wind and solar farms be self-reliant to provide ‘dispatchable generation‘ (i.e. backup power)  – rather than looking at more holistic/system-wide solutions. Even though many solar farms are being built with battery storage a ‘hard and fast’ rule like this could have implications for investment in large solar in the future (as battery storage costs have been shrinking, they are still significant).

The Finkel Report and the “Generator Reliability Obligation”

Kane Thornton, CE of the Clean Energy Council (the CEC represents businesses involved in solar and wind renewable energy generation) was quoted as saying – “Many new renewable energy and energy storage technologies and solutions are now available to help manage energy security”. Many large-scale solar plants being built these days are including battery storage

We don’t want a repeat of the the blackouts that plagued South Australia last year so it is understandable that energy security remains paramount whilst our energy economy transitions. It’ll be interesting to see which recommendations are taken on board and which aren’t – but I think the ‘generator reliability obligation’ could prove to be more trouble than it’s worth if it stifles innovation and curbs investment with blanket rules on new solar plants.

With the proposed $16.5b Carmichael coal mine by Adani Mining still being discussed (the mine is expected to produce 2.3 billion tonnes of coal over 60 years), it seems like we are reaching a flashpoint with regards to the crossroads of global warming, employment, and profit. The rest of 2017 promises to be a very interesting time for Australians and their electricity.

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Lyon Solar announce $1b solar-battery farm for South Australia in 2017

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Lyon Solar (the Lyon Group) have announced massive news today, releasing a press release stating they’re going to build a $1b solar+storage farm in South Australia’s Riverland by the end of 2017. The farm, which will consist of 330 mw of solar (cost of around $700 million) and a 100mw lithium-ion battery farm with 400Wh capacity (i.e. four hours of storage) costing $200-300m. It will probably connect to the grid on some scrubland near the small town of Morgan – land has already been secured on where to build the farm. It’s been announced that the system will boast 3.4m solar panels and 1.1m batteries. The solar power generation will qualify for existing renewable energy subsidies of $84/MWh (in addition to the wholesale market price).

About The Lyon Group

The Lyon Group is a Brisbane based partnership run by David Green and backed by Mitsubishi of Japan and the Unite States hedge fund Magnetar Capital. Private equity firm Blackstone, through Magnetar, are among the companies backing the project. Green stated that “We have the capital. That’s already secured,” he said; noting that players like Blackstone don’t “come in behind something that’s ill-considered”. Lyon will be partnered by AES Energy Storage who were instrumental in the emergency roll-out of large-scale battery storage in California last year. Also involved are Tesla and Greensmith (ZEN Energy‘s supplier).

The Lyon Group’s Current Australian Projects

Below is a map of Lyon Solar’s current Australian projects – they’re a big player in the market (have a closer look at their current 120mw Kingfisher project)  and we’re very excited about the  potential of the new Riverland project, which is 100% equity financed and will commence construction around June, employing 270 workers. This solar-battery farm will be the world’s biggest and is extremely exciting for those of us following the energy storage revolution.

Lyon Solar's Australian Projects
Lyon Solar’s Australian Projects (source: AFR.com)

With Wednesday’s shutdown of Victoria’s 1600mw ‘dirty coal’ Hazelwood plant, the project, whilst not a panacea, could go a long way to help solving South Australia’s current and Victoria’s impending energy problems. As Riverland and other large scale projects launch, maybe it’s time to start thinking about upgrading the SA-VIC and creating a new SA-NSW interconnector so as to increase energy flow between the states? Wonder what Jay Weatherill would think?

If you want to hear more straight from the ‘horse’s mouth’ (sorry David) – David Green from Lyon Solar will be speaking at the Informa Large Scale Solar Conference hosted by RenewEconomy in Sydney next week, April 3-4.

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Hazelwood Shutdown – The implications for Australian Power Prices

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After over 50 years of service, the Hazelwood shutdown will finally be completed today . Hazelwood, the Engie and Mitsui owned power plant operated at 1600 megawatts and was a brown (‘dirty’ coal) fired plant, is located in Victoria and supplied almost 25% of the state’s energy (and about 5% nationwide).

This has led to a steady surge in energy futures for the April-June quarter (over 300% in the past year) as per data from the AEMO (Australian Energy Market Operator)

Melbourne analyst for UBS, Nik Burns, wrote in a report this week that the energy market is “…struggling to absorb the potential impact of the closure on future electricity prices” which is leading to “increased volatility”. As the graph below shows Australia’s already struggling power and energy market have reacted with steadily increasing panic to the situation:

Hazelwood Shutdown
Hazelwood Shutdown (source: smh.com.au)

 

Federal Energy Minister Josh Frydenberg has previously said that Victoria could import energy from NSW and Tasmania (coal-fired and hydro generated, respectively) – and according to SMH, and Australia’s electricity grid operator over the next two years there is a prediction of 72 days of high demand conditions/possible power supply shortfalls if next summer is even close to as hot as predicted. As previously highlighted, the plant supplied a massive 25% of Victoria’s power and the 72 days of potential power “reserve shortfall” – which doesn’t necessarily mean blackouts, but certainly shows how reliant the state (along with SA who have myriad similar woes) will be on imported power over the coming months following the Hazelwood shutdown.

However, investigating the situation further it may not be as bad as that sounds – these predictions are based on ‘extreme demand scenarios’ – which refers to the assumption of ‘once in a decade’ electricity usage. A scenario like this is possible for days and even weeks over the next couple of years, but 72 days seems extreme at best. Dylan McConnell from the University of Melbourne said “If there’s a 45-degree day, or three 45-degree days in a row, or a generator fails you could have demand at that level and get a shortfall in Victoria, but it’s not going to happen 72 times in two years,”.  Grattan Institute energy program director Tony Wood agreed that the electricity supply was unlikely to be interrupted in summer 2018/19.

“The most likely outcome at the moment is that we will get through this,” Mr Wood said.

Regardless, Australia’s transition to a clean energy remains fraught with uncertainty (apart from the seemingly inexorable price hikes). With the $2billion Snowy Mountain expansion “Snowy Hydro 2.0” still years away (the feasibility study should be completed by the end of the year) we face a few interesting years as we try to balance reaching our 2030 renewable goals and keep energy on while minimising blackouts and load shedding across the country.

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