The Tea Room - Archival
[Thursday 30th June 2011 ]
As tea room readers will likely appreciate, OzEA has been run on a shoestring. We're now out of shoestring again, and hence in another pause.
In order to get OzEA onto solid footings, and then grow the project, we need to establish the value of the OzEA approach. There is no point making further investments of effort and time unless consequential outcomes are anticipated.
The University of Adelaide, and the Environment Institute in particular, are again providing support in helping OzEA find its way. The institute's business manager, Simon Divecha, is working to develop industry relationships. If industry can see value in OzEA and are prepared to invest in developing us, then we have the vote of confidence we seek and need.
This is a good juncture for a brief overview of OzEA past, present and future.
(i) The scope and philosophy of OzEA are our distinguishing characteristics, and the aspects I outline here. For work-flow to date see this chronology, while for a more discursive overview of project development please see the First, Second, and Third Stories.
While born from a cauldron of debate on climate change and the role of nuclear power, OzEA very deliberately seeks to distance itself from any particular encompassing world view. Rather, an empirical focus on a constrained question provides the basis for making meaningful contributions. This scoping has settled on the task of describing how an Australia with 50% renewable electricity might arise.
Crystal ball gazing is an occupational hazard that we also seek to avoid, thus requiring circumspection in terms of technology and timeframe particulars. That is, we focus as much as possible on conceptual problems such as how the intermittency of renewable supply can best be handled, but do this in a concrete and empirical way. Also, we seek to develop abstractions and quantitative measures that enable a high-level discussion about the evolution of a national electricity market.
As an operating principle, OzEA conducts its work with a positivistic attitude to the prospects of renewables.
(ii) Current work is to establish a round one version of a 50% renewables scenario. The Third Story - Renewable Base Supply, is built around 35% wind and 15% concentrating solar thermal, a division that arose somewhat arbitrarily. This should not be confused with the current need to specify a 50% scenario that includes a PV component and the existing ~8% hydro, in addition to new analysis of now wind and solar complement each other given particular storage and transmission parameters.
(iii) As above, the future hangs in the balance. Whatever happens the OzEA site and project will continue in some form. Ideally we will soon have Francis back on the books executing the *next set of milestones* through to years end, while also seeking a second dedicated researcher and pushing forward with a linkage grant application. The focus of the work is also turning to the economic, with scoping of the questions that OzEA can usefully address currently underway.
[Wednesday 25th May 2011 ]
New tasks and draft milestones
The Third Story (TTS) in finally in place. There is follow up work to do, however, the clear need is to include major transmission requirements. Introduction of a spatial model, where individual generators produce electricity that must then be accounted through a transmission network, requires some sort of organising principle to enable the modelling of flows. The natural choice is electricity price. Thus, we require both a spatial model and a market model.
As outlined in what follows, OzEA now moves to explicitly include individual generator dispatch (for the fuelled generators) based on a high-level model of wholesale electricity pricing and market operation. These aspects have been in the background for some time, and are now to be handled and added back onto the 'solid core' of TTS. There are two specific aims:
i) to see how the prima face case of TTS (that high-penetration renewables can pull their weight as base-supply) looks once major
transmission is considered;
ii) to allow OzEA to settle on a 50% renewable electricity scenario as the platform for developing analysis on how to get there.
It is anticipated that this work, including a first-cut on the evolutionary pathway, will take up the rest of 2011, and work plans are being codified into a set of milestones. OzEA continues for now as a small, focused, high-level operation, but with a clear expectation that this effort is laying groundwork for a more coordinated and better resourced future analyses.
Draft milestones to end 2011: Last November OzEA adopted a set of (old/@Nov2010) milestones which acted powerfully to move the work forward. Similarly, we are now drafting milestones for work through to the end of 2011, with specific tasks at the front end leading into more general steps. Here are the new draft milestones; you are invited to provide feedback by 15th June.
The Spatial Model: The spatial layout itself will be kept very simple to start. Each of the NEM states will be considered as a region, with 'transmission pipes' connecting these regions (see Figure below). Within each of these regions we will require that supply meet demand, inclusive of the interstate flows (which will be determined via the market model). So, specification of the starting spatial model will require:
a) nodes and edges representing the regions and transmission links;
b) sizes of transmission links;
c) demand trace to be supplied at each node;
d) renewable generation data for the wind and solar plant associated with each region (/node)
e) specification of fuelled generators associated with each region (/node)
For (d), the renewable generation data has the same form as previously (i.e. in TTS), with the output in time (hour-by-hour) based on pre-processed weather data and plant size (nameplate capacity). For (e), we specify the plant as one of a small number of "types" (e.g. 'coal', 'CCGT', 'OCGT', 'Hydro'), with the properties of these types being a matter for the market / dispatch model.
The Market Model: The market model is layered over a spatial model, and settles the wholesale electricity price at each node at each time point. What is required is that the market model works to dispatch generators and use transmission in a reasonable way in order that supply meet demand in each region at each time point; how this 'price' compares with what happens in the real NEM is of curiosity value only at this stage.
There is significant detail and development work in establishing the mechanics of the market model, and here I provide only a superficial overview. As for the real NEM, generators bid to supply electricity at a price that is predominantly based on the marginal cost of production (also tied to a generators ramp-up and ramp-down rates). The final price is the highest priced offer that needs to be accepted in order that total supply meets demand. Also included (unlike the real NEM as understood), will be an explicit mechanism for 'buyers' to state the highest price they will pay to have a certain demand meet. While this buyer price will initially be set at the market cap, it will in time provide a mechanism for exploring demand side elasticity.
The model is run according to predefined infrastructure, and with prices built up around marginal costs. The (modelled) profitability of given infrastructure is determined by examining the cash flows in model runs over time. While marginal cost dictates when a generator enters the market, the price received can often be higher and thus act to pay the capital and other costs.
Transmission Analysis: As transmission can be expensive, we embed the cost of transmission into the design of the spatial model. Transmission links pay themselves off by adding to the cost of the electricity that flows through them. What will this cost be? In the immediate work the transmission links are between NEM states (Figure above), with each state representing a market with a uniform wholesale price at each time point; transmission occurs (in this case) when the difference in price between connected markets is greater than the transmission losses. As for generators, this is a marginal cost threshold and the overall profitability of these transmission links is examined by modelling cash flow over time.
Markets, central planning, public policy debates, and OzEA: It is a mistake to imagine that an OzEA 'pathway' to 50% renewables is a proposal for central planning, just as OzEA sees it as mistaken to 'leave it to the markets' without considering what may be tasked of market mechanisms. The 'free markets' vs. 'government intervention' cake-fight does not belong here; OzEA is pragmatic and philosophically down the centre in this regard. What is more interesting, however, is the pubic policy debate.
To clarify what has been stated before, OzEA works towards having a particular niche in the public / policy debate around renewables. We eschew engaging broader debates so that we can deliver on our core business: an open, empirical and high-level analysis of how high-penetration renewables might best be achieved in Australia.
In Summary: The clear and present task list for OzEA is to: i) settle on a 50% renewables scenario, ii) work back into 40%, 30% and 20% stepping stone scenarios, and iii) get a solid first-pass grip on the evolutionary pathway involved. As the minimum requirement for the various scenarios, we include gross (interstate) level transmission requirements - the analysis of which will be build on a market pricing model for wholesale electricity in each NEM state. It is thus development of the price based generator dispatch machinery that is coming to occupy attention and my energies.
