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MARKET OVERVIEW AND THE CASE FOR OFF-GRID RENEWABLES Prepared for Remote Area Power Supply Conference March 2014
Heading goes here Where is the Off-Grid Energy Market?
• Off-Grid • Not the NEM or SWIS
• Fringe-of-grid • Remote NEM and SWIS
areas • Remote or Very Remote
• ABS definition
Heading goes here Remote Energy Market Overview
• 2% of Australia’s popula0on live in remote regions yet they consume
6% of energy demand
• Currently supplied by;
• Natural Gas (72%)
• Liquid Fuels (25%)
• Renewables (1%) in comparison to
NEM (13%) or SWIS (6%)
86%
8% 5%
1%
NEM
SWIS
Off-‐Grid Industrials
Off-‐Grid Communi0es
Heading goes here Remote Energy Market Overview
15,857 GWh was produced by almost 5GW of remote installed capacity (Source: BREE 2013)
South Australia Queensland Northern Territory
Western Australia
Total
Renewables 2 1 3 47 56
Liquid Fuels 35 146 327 705 1,222
Natural Gas 40 545 602 2,410 3,614
-‐
1,000
2,000
3,000
4,000
5,000
6,000
MWs
Heading goes here Remote Energy Demand
Source: AECOM, BREE, Geoscience Australia 2013 Data may have anomalies, esAmates are arbitrary & AECOM does not accept any liability for any decisions made on the basis of this informaAon.
Off-‐Grid Western Australia
Off-‐Grid Northern Territory
Off-‐Grid Queensland
Off-‐Grid Australia
Industrial; 79%
Community, 21%
Industrial; 89%
Community, 11%
Industrial; 41%
Community; 59%
Industrial; 89%
Community; 11%
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Renewable Energy Target (RET)
Carbon Price, ARENA and CEFC
RAR Program $400m (target 150MW)
FaHCSIA
Remote Indigenous Energy Program &
Bushlight
Community Service ObligaTon
>$700m
Diesel Rebate Fuel Scheme
$5bn
(~$2bn Miners)
Remote Renewables Support Remote Energy Subsidies
Current Programs Supporting Remote Energy
Heading goes here Off-Grid Market Research Observations
• Technical • Immaturity: Remoteness factor is not well
understood and backing of the supplier and maturity of the technology differ
• No out of the box soluTon:
• System integra0on challenges vary in complexity
• Scale and penetra0on is generally low.
• Credible data to analyse op0ons is limited
• Storage not considered or understood but recognised as expensive
• Reliability is paramount !!!
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Technology Potential
Hybridisable technologies will be the early movers…
Wind • Commercial • High Poten0al
Hydro • Commercial • Limited Poten0al
Solar PV (& CSP) • Commercial • High Poten0al
Wave & Tidal • Pre-‐commercial • Limited Poten0al
Bioenergy • Commercial • Moderate Poten0al
Geothermal • (Pre)Commercial • Limited Poten0al
Heading goes here Off-Grid Market Research Observations
• IntegraTon • Knowledge gap exists & niche
companies are dominate on smaller projects
• Intermiiency and reliability concerns has limited ‘penetra0on’
• Loca0on, weather, access, resources and transporta0on are a challenge
• Market is inquisi0ve yet cau0ous
• Economic downturn has affected aktude to risk, investment and non-‐core ac0vi0es
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Heading goes here Mining Process and Energy Intensity
Primary energy consumpTon in the mining sector
Source: BREE 2012
Source: BREE 2012
Trends in intensity by sector
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Exploration
Extraction • Blasting • Drilling • Digging • Ventilation • Dewatering
Materials Handling • Diesel • Electric
Beneficiation & Processing • Crushing • Grinding • Seperation
Transportation
Hour of Day
The Industrial Hybrid Challenge
-‐
2
4
6
8
10
-‐
5
10
15
20
25
30
35
1 2 3 4 5 6 7 8 9 10 11 12
GWh
Globa
l Mean Solar Expo
sure Mj
Heading goes here Hybrid Integration and Reliability
Reliability Probability
Scale
ConfiguraTon & PenetraTon
Use of Storage OpTmised Control System
PredicTon
Cost / Benefit
Define
1
Optimise
3 Analyse & Re-
Analyse
2 Execute
4 Early Evaluation Examine Options Optimise the Solution Inform the Decision
Heading goes here Balancing Intermittency
Flow Baieries
Lithium Ion
Advanced Lead Acid
Fly-‐Wheels
1kW 10kW 100kW 1MW 10MW 100MW 1GW
Month
Day
Hour
Minute
Second
Sodium Sulphur
Discharge Tim
eframe
Graph Source: EPRI (2010), “Electricity Energy Storage Technology Op0ons”, Bradbury (2010), “Energy Storage Technology Review”
Power Quality Grid Support / Balancing
Bulk Power
CAES
Super-‐capacitors
85-‐100% 70-‐85% 45-‐70% Efficiency
Pumped Storage
Op0ons include;
• Energy Storage (see graphic)
• Load or Demand Side Management of non-‐cri0cal loads
• Curtailing the renewable genera0on to maintain redundancy and/or spinning reserve
• Load dump
• Reduce renewable penetra0on level
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20
40
60
80
100
120
140
160
180
200
30 28 26 24 22 20 18 16 14 12 10 8 6 4
Solar CAPEX of $3200/kW
ConTnue using diesel (Diesel SRMC < Renewable LCOE )
CleanOpt Hybrid Analysis – Diesel + Solar
Carbon price
Delivered
diesel price (cen
ts per litre)
Project lifeTme (years)
100cpl & 10yr Mine Life or Payback
$3.2m/MW
1MW PV installa0on equates to ~ $5m Fuel
Cost Savings over 10years
100cpl & 6yr Mine Life or Payback
$2.2m/MW
AECOM does not take any responsibility for investment decisions made from this analysis
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Off-‐Grid Australia
213
1,067
0 200 400 600 800 1000 1200
MW's
Source: AECOM, BREE, Geoscience Australia 2013 Data may have anomalies, esAmates are arbitrary & AECOM does not accept any liability for any decisions made on the basis of this informaAon. Market Poten0al: Low Penetra0on equates to 50% feasible, 20%diesel & 5%gas of exis0ng capacity and High Penetra0on equates to 80% feasible, 50%diesel & 20%gas) of exis0ng Capacity
Remote Renewable Market Potential
~$2Bn Market
~$600m
Heading goes here Heading goes here Conclusion
• Integra0ng renewables with exis0ng energy sources makes sense
• Mining & industry is a natural fit for renewables
• Focus on opera0ng cost
• Fuels costs are vola0le
• Business case is viable in some cases without a subsidy
• Currently low penetra0on
• Technical challenges can be overcome whilst maintaining reliability
• Funding is now available
Heading goes here Contact Details
Craig Chambers Market Sector Director – Power Genera0on
D +61 2 8934 1060
M +61 419 992 380
