MULTIPLE UNIT TRIPS, CAUSE BLACKOUTS IN 375,000 QLD HOMES AND ENERGY PRICES TO RISE.

Apart from the power going out in 375,000 Queensland homes we would not have seen any real impact on the NEM as prices remained stable as supply and demand was managed by AEMO.

AEMO published a market notice at 2:21pm advising of the power event at H24 Calvale.

H24 Calvale substation is next to Callide Power stations, which connects to the 275KV transmission line that links Callide in central Queensland via Tarong into South East Queensland.

As a result of this transmission line outage, all the power from central Queensland was redirected down the transmission lines closer to the coast.

Following the simultaneous trip of the Callide units, Stanwell power station also tripped.

Initially there were various rumours regarding the cause of the failure including:

  • explosions at Callide
  • a fire in the turbine hall
  • a fire at the substation

It is now becoming evident that the cause could be a fire in the turbine hall at Callide. The station has been evacuated and emergency services are on site.

At the time of writing this update, 4:30pm, the Callide units have not returned to service however, Stanwell is gradually returning 3 of its 4 units to service.

As demand increases, solar generation diminishes, and thermal generation slowly increases the market has been put under stress. This has resulted in several price spikes and increasingly higher prices.

As we move into the evening, predispatch shows the price is likely to hit over $14,000/MWh for the next couple of hours, however this is unlikely to occur as the gas turbines and other coal fired generators increase their output.

Tomorrow when all the market data is published, we will provide a more accurate update on what is currently occurring.

Update:

  • At 16:13 AEMO flagged its intension to negotiate with RERT panel members for additional generation between 17:30 and 20:00.
  • At 16:16, AEMO notified the market that the transmission line out of H24 Calvale had been returned to service, this will allow generation to flow unconstrained.
  • It looks like 3 Gladstone units also tripped following the event at the same time as the Stanwell trips.

RENEWABLE GAS IN THE PIPELINE

Australia’s largest electrolyser has started producing green Hydrogen which will be distributed through the gas network. The 1.25MW electrolyser is located at the Hydrogen Park South Australia (HyP SA) which forms part of the Tonsley Innovation District south of Adelaide.

The facility received $4.9M of funding from the SA government under a grant to leverage its renewable infrastructure to be a world class renewable hydrogen supplier.

The facility is operated by Australian Gas Networks (AGN). Its parent company Australian Gas Infrastructure Group sees “green hydrogen” as a potential saviour for its sunk investments in gas pipelines.

The green hydrogen will be blended at 5% with conventional natural gas and distributed through the existing gas network to 700 homes. Longer term plans are for the percentage of hydrogen to be increased to 10% and extending the pilot to more end users.

Emission reductions from 5 or even 10% hydrogen will not result in house holders reaching net zero emissions, but it is a start for people that want to remain with gas usage for heating and cooking. To reach net zero emission it is likely that gas appliances will need to be replaced by renewable powered electric devices.

In the rapidly changing energy mix, AGN must adjust its business model to prevent its assets from becoming stranded due to the shift to renewable electricity. AGN is marketing the 5% gas blend as renewable gas and clean burning gas.

The renewable hydrogen plant will cost $14.5 million and can produce 20kg/hr of green hydrogen with onsite storage of 40kg. In one of the driest states of Australia it is also noted that it takes 15l of water to make 1 kg of Hydrogen.

SA wants to become a green hydrogen powerhouse with plans to export green hydrogen via three new hydrogen hubs. To power the electrolysers capable of producing the required volumes of green hydrogen for export will need 12GW of renewable energy.

Apart from the reticulation of the green hydrogen gas blend, the facility is using BOC to transport the green hydrogen by road to industrial customers in Whyalla. Previously BOC transported hydrogen from its Victorian manufacturing facility. BOC will use hydrogen tube trailers to transport the gas from the Tonsley facility saving 117,000km in annual driving and 122,000 kg of carbon emissions per year.

Edge News – May 2021 Newsletter

Electricity prices are market driven, and markets respond to price drivers. Too high, respond with action that drives them lower. Too low, respond with action that makes them higher. Sounds simple yes? Add in policy uncertainty, ongoing network capacity issues, and a genuine sustainability movement, and it’s not that simple at all.

We look at Q1 2021 electricity prices. Why they did what they did. What the real drivers are. Where they can go in 2021, and beyond.

We also look at Sustainability. In as little as 12 months it feels like we’ve seen Sustainability go from a compulsory annual report to a real movement with real action and actual commitments.

TAX ON ELECTRIC VEHICLES (EVs)

The Victorian government has introduced a Zero Emissions Vehicle (ZEV) Subsidy. The subsidy is designed to reduce the cost of purchasing an ZEV. ZEV’s, which are more commonly known as Electric Vehicles (EVs) are increasing in popularity and the Victorian government would like to see Victorians choosing to buy an EV sooner. Buyers of electric and hydrogen vehicles will be subsidised with the goal of achieving half of all new cars sold to be zero-emission by 2030.

The subsidy is part of the Victorian Government’s Zero Emissions Vehicle Roadmap, a $100 million plan to fast track the transition to ZEVs. To achieve the 50% ZEV target, $46M of funding has been allocated to support the purchase of 20,000 ZEVs. The first round includes 4000 subsidies of $3,000 to reduce the up-front cost of an EV. Further rounds will subsidise a total of 20,000 EVs over the next three years.

Victorian residents and businesses can apply for the first round of the subsidy, with electric or hydrogen vehicle purchases up to $68,740 before on-road costs eligible for the subsidy. More expensive EVs, hybrids, zero-emission motorcycles or heavy vehicles are not eligible at this stage.

The Victorian government has also committed to buying $10M worth of zero-emissions cars over the next three years, this will equate to about 400 vehicles. $19M of funding has been allocated to building 50 EV charging station throughout Victoria.

Previously, the Victorian Government released plans to tax EV drivers 2.5 cents per kilometre driven each year to counteract the expected loss from fuel excises.

An average driver covers 15,000km each year so, the extra 2.5/Km would cost EV drivers an extra $375 each year on top of registration. These changes will take effect from July 2021.

FEDERAL FUNDING WITHDRAWN FOR WINDFARM

The Northern Australian Infrastructure Facility (NAIF) is a $5B government backed financier that provides loans to infrastructure projects in the Northern Territory, Queensland, and Western Australia. NAIF’s mission is to be an innovative financing partner in the growth of northern Australia.

South west of Cairns, developers plan to build the Kaban Green Energy hub.  The hub will consist of 157MW of wind turbines and a 100MW battery. This project was to supply clean energy and support local employment during construction and the ongoing operation.

The $340M project has reached the due diligence stage of its application for a $280M loan however the federal Resources Minister has vetoed the projects application.

The deal had been finalised by the NAIF board in January however the Federal Resources Minister Keith Pitt vetoed the deal at the last minute. The Minister stepped in as he did not believe the project would help deliver lower power prices to the National Electricity Market.

The NAIF has supported $2.9B of projects, forecast to generate $9.4B in economic benefit, and supporting around 9000 jobs. Queensland has received $1B in investment through the NAIF and this will be used to develop 10 projects.

GOVERNMENT CONTINUES TO KEEP ITS FOOT ON THE GAS PEDAL

Tomorrow night the federal government is expected to announce $58.6 million in funding to drive its gas-led recovery. Prior to the budget, on Friday the federal government released its interim National Gas Infrastructure Plan that advised where the funding would be used.

Building on Australia’s gas fired recovery plan released in September 2020, the interim report outlines $38.7M will be spent on early works to support critical gas infrastructure projects, $3.5M for the development of a long-term Future Gas Infrastructure Investment Framework, $4.6M to develop initiatives that empower gas reliant businesses to negotiate competitive outcomes, $6.2M to design, consult and implement reforms to continue accelerating the development of Wallumbilla as Australia’s Gas Supply Hub and $5.6M to develop a further National Gas Infrastructure Plan for 2022.

This funding is to ensure there will be enough supply to meet demand on the east coast gas market, part of the funding could go to Australian Industrial Power, a company setup to build a gas import terminal and power station at Port Kembla.

Other beneficiaries of the funding include the Golden Beach gas production and storage project in Gippsland, Victoria that could receive a short-term loan of up to $32 million and support for a business case for the expansion of the South West pipeline. The South west pipeline will allow additional capacity to be used at the Iona storage facility. These projects are expected to deliver 1,000 new jobs.

Modelling for the Interim National Gas Infrastructure Plan continues to show a potential shortfall in gas supply by 2024. These shortfalls are expected to occur during peak demand times so as a result funding is designed to stimulate the availability and reliability of high gas volumes close to the demand centres at very short notice. The report also noted the requirement for supply flexibility.

Pipeline developers are concerned that funding for an LNG import terminal will take the focus away from the existing Australian resource projects.

The final National Gas Infrastructure Plan is due by the end of the year and pipeline developers such as the Hunter Gas Pipeline are increasingly frustrated as they have to wait until the final plan to see if they can receive support to build a new pipeline from Queensland to Newcastle.

Other developers are concerned projects such as a pipeline in the Bowen basin should be fast tracked to allow the export of up to 15,0000PJ.

Australia’s first net zero emissions, hydrogen/gas power plant gets the green light.

EnergyAustralia has announced that the expansion of its existing Tallawarra power station in the Illawarra region is proceeding, following an agreement reached with the Government of New South Wales.

Tallawarra B will be Australia’s first net zero emissions hydrogen and gas capable power plant, with direct carbon emissions from the project offset over its operational life. EnergyAustralia will offer to buy 200,000kg of green hydrogen per year from 2025.

The 300+ megawatt power station will be powering New South Wales homes and businesses in time for summer, following Liddell power station’s retirement.

Not only will the new power station deliver reliable power to around 150,000 homes but it will also contribute $300 million to the economy and create 250 well-paid jobs during construction.

“EnergyAustralia has a goal of being carbon neutral by 2050. Today we provide further evidence of another energy project that can help keep the lights on for customers with reliable, affordable, and cleaner energy,” Managing Director Catherine Tanna said.