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Can we afford a renewables-only power supply?

By Geoff Carmody - posted Wednesday, 4 April 2018

So, based on 2016-17 AEMO results for SA, replacing 'on tap' fossil-fuel power with PVs delivering the same power requires up to 12.3 times the generation-equivalent capacity in solar panels and batteries.

There's more: 'unused power' (UUP).

The 85% residual from the 2016-17 AEMO SA data includes 'unused power' (ie, 'wasted' power) plus 'no power'. Does it matter if we don't know how much of each was in the 85% result? In one sense, no. AEMO provides an overall 'used power' rating (15%) for total solar capacity. Only used power counts – for users.


Knowing the value of 'unused power' does matter for power costs. It is a measure of the extent to which we need to 'over-invest' in renewables capacity to deliver a given value for UP plus UUP. If we don't 'over-invest', we won't have enough capacity to deliver a target value for used power. We must generate both.

'Unused power' also measures how much additional storage we need to convert it into used power. We could reduce or eliminate unused power if we had more batteries in which to store it. If we could store presently unused power, the measured 'efficiency' of solar panels would rise. If, say, unused power was 10% of used power, and we could store all of it for later use, then AEMO's 2016-17 SA 'efficiency rating' for solar would increase from 15% to 16.5%.

We'd need fewer solar panels to deliver the same used power (in this case 100). But here's the rub. We'd also need even more batteries, not fewer, to store hitherto unused power. Required PV generation capacity falls to under 6.1 times the fossil-fuel plant it's replacing. The generation-equivalent capacity of needed batteries increases to over 6.3 times the fossil-fuel plant it's replacing. The all-up required generation capacity equivalent rises to about 12.4 times the fossil-fuel plant it's replacing.

We don't know the % of unused power to used power. We can do 'what if' scenarios assuming different proportions of unused power to used power, using the 15% AEMO 2016-17 SA estimate for the latter.

If we want (rising) renewables capacity to deliver the same power as fossil-fuels, while eliminating waste of renewables 'unused power' (by storing it), required capacity and costs rise. A lot. See chart below.


To replace fossil-fuel generators while delivering the same power requires solar generation plus battery storage capacity over 12 times larger if we don't capture unused power. If we do capture unused power at, say, 70% of used power, it's over 14 times. These are big numbers, combining intermittency, capturing unused power, and required battery storage capacity. Unused power will rise as renewables' power share rises. More renewables power will be wasted without proportionally more storage. We'll pay, used or not.

AEMO's 2016-17 efficiency estimate for wind in SA is about 29%. The required wind capacity multiplier to replace the same fossil-fuel power is nearly 6 times (ignoring 'unused power'). This is a big number too.

There's still more. Additional costs using renewables do not end with intermittency and unused power. The intermittency of renewables is uncertain. We don't know for certain when the sun will shine, the wind will blow, or water availability will be drought-affected.

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About the Author

Geoff Carmody is Director, Geoff Carmody & Associates, a former co-founder of Access Economics, and before that was a senior officer in the Commonwealth Treasury. He favours a national consumption-based climate policy, preferably using a carbon tax to put a price on carbon. He has prepared papers entitled Effective climate change policy: the seven Cs. Paper #1: Some design principles for evaluating greenhouse gas abatement policies. Paper #2: Implementing design principles for effective climate change policy. Paper #3: ETS or carbon tax?

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