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The energy regulatory model in Australia is complex, and broken. And rather than simplifying it, it is going to be made even more complex, and probably more broken, to resolve the problems.

Tesla is not the problem, the 30 minute bidding model, and the state/federal divide on energy policy, and the monopoly capital rent-seeking behaviour of encumbent privatized generators using coal and gas, and guaranteed yields on capital investment, and weak regulatory oversight, and a lack of national coordination, maybe they are the problem.

But Tesla exposes the problem: the Neoen battery stack has been fantastic, but needs to be kept in perspective: To use this for more than FCAS (frequency stability services) nationwide, means re-building the national transmission grid to favour battery models. Parliamentarians got up on their hind hooves and brayed about how it couldn't keep lightbulbs on for more than 20 minutes and was a waste of money: They didn't for one minute admit it wasn't designed as a longterm power store, but as a frequency-control store, stability, and for peak-price bidding to cap off supply-price disfunctions, its working fine: Something like 60% of its capacity is for private bid to earn money, 40% contracted to the state for their goals. It is a real game changer but needs to be understood, its not like a Pumped Hydro unit, or a synchronous condenser (although it is more like that, than PHES) It is its own beast. Its response speed is so fast, the regulatory behaviour models have to adapt to cope with it.

A Five minute bid pricing model is coming in under 2 years I think. I hope the majors don't work out a way to "game" it because my hope is, other mega-scale battery and PH systems will be onstream then, and be able to survive in it, and drive some more coal and gas out of the system.

We have a fictional belief in "base load" power here rather than responsive power. We also lack useful tools like demand management which can be used to bid alongside supply for pricing to avoid having to turn on nasty dirty generators, when the option to time-shift load exists (supermarkets and places with huge thermal mass can time-shift their AC and cooling or heating budget, and so avoid load)

Meantime, people are arguing for a de-centralized model using household batteries where resilience is kept in the customer distribution net, as well as at the transmission net level. There are competing pressures around "how shall we fix it" which are not simple.

If you want to read a good overview of this, look for stuff written by John Quiggin, an economist in Queensland who has written on the stuff-ups in privatized energy supply in Australia and the market failure.

I suspect every model is currently broken, and they are all distorted by: regulatory capture.

My guess is that without storage systems, wind and solar and distributed power will always be "regulated away" by wealthy incumbents.

But with storage systems, new forms of power will be valid participants and maybe there is a chance of an efficient energy market.

"Regulatory capture" hits that sweet spot of being easy to grasp, somewhat smart, and sufficiently cynical.

But while it is definitely a valid concern, and probably applicable to energy markets, it is unlikely to be the single reason for any and every problem with energy markets and production.

Using it as a highbrow euphemism for "corruption" probably causes more harm than it is useful: it gives license to ignore actual technical problems and the painstaking search for solutions, opting instead for an all-encompassing, nihilistic, and cynical narrative where nothing really can be done, except trying to tear down ever more existing institutions.

I also don't quite understand how storage systems are supposed to bypass problems arising from "regulatory capture". If incumbents get to write the rules in their favour, they could just as easily keep newcomers using storage out of the market as those without.

I really appreciate your comment but I think another element we need to consider is what type of leadership is going to force change.

Whenever I see people throw around “regulatory capture” when talking about immensely complex and finely tuned systems for delivering critical services, I think of newbie programmers who approach a big legacy codebase with the idea “oh this is all crap, we should just rewrite it.”

The electric grid is the product of a century of technical and regulatory co-design. If you were starting from scratch with an eye to accommodating renewables, you wouldn’t design either the grid or the regulations the way they are. But you’re not. You’re slowly evolving the system from point A to point B. You’re dealing with expensive physical infrastructure built on 30 year planning horizons, in many cases with express guarantees about revenues (because at the time, you needed that capacity and sought to induce someone to build it).

When I think of distortions to the energy market, I think of screwed up regulation. And it is usually not to the benefit of the customers.

A friend in texas pays about .06/kwh for residential power. In California, PG&E gets power at 0.03/0.04 per kwh, and resells it to residential customers for .22/.28/.49 per kwh. (you pay more when you use more, unlike any other commodity)

I hope these markets benefit from robust competition, and maybe projects like this help. Allow alternative energy, route around distribution problems and shake things up a bit.

(yeah, "throw out the old code, rewrite it")

I ask you - Why does the entire grid need to be rebuilt for batteries? Australia needs to split generation and transmission/distribution apart - the utilities shouldn't be able to make money of their own generating assets similar to a majority of US jurisdictions.

I'll counter that I believe the energy systems are moving in the right direction and will likely get to a better spot over the next 5-20 years as the infrastructure upgrades are necessitated and alternatives products that are more cost-effective options become more viable / pressure builds on policy makers.

And yes, energy markets are incredibly complex - especially in highly dynamic areas with fluctuating demands and supply possibilities. I believe the CA-ISO was integrating electricity for 10,000-35,000 MW every 3 seconds about 7 years ago -- probably way faster at this point. It's amazing and humbling what our grids operators are able to do.

I deleted a rant. I think you make excellent points. Its an amazing system, we should laud the engineers who keep it running. I am also hopeful for the future but wary of the resistance to structural change from the incumbency. Thats why I ranted: I'm so frustrated by a cowed regulator.

What do you mean by integrating every 3 seconds? As an ISO in the US, CAISO is pretty standard in that they have a day-ahead hourly market and a 5-minute real-time market. Of course they have very large ramps due to solar (duck-curve).

For those who aren't aware, the US power grid has been using 5-minute bidding for many years.

For what it is worth, Australia has 5 minute generator dispatch, but 30 minute settlement. The market operator is presently implementing a project to bring settlement to 5 minute as well.

15 minutes for some (most?) of Europe

I can also recommend this analysis by Jess Hill in mid-2014:



"Since 2009, the electricity networks that own and manage our “poles and wires” have quietly spent $45 billion on the most expensive project this country has ever seen. Allowed to run virtually unchecked, they’ve spent vast sums on infrastructure we don’t need, and have charged it all to us, with an additional fee attached. The spending was approved by a federal regulator, and yet the federal government didn’t even note it until it was well underway."

As you intimate, the whole AU vs state vs private interests approach to power supply leads to a breathtakingly poor result for citizens / consumers.

Do you have ongoing guaranteed yeld for coal plants? That's insane. Is it some old contract that is about to expire?

Anyway, I wonder how the grid will cope after the lion-share of the generation is done by synchronized inverters, instead of high-inertia rotational generators. I am concerned we move too fast and make our grids instable worldwide, with generators amplifying deviations instead of absorbing them.

Do you have ongoing guaranteed yeld for coal plants?

No, that is referring to capital investment in the distribution assets, not generation.

5 Minute Settlement is due to start on July 1, 2021.


And a wholesale demand management market looks like it'll be coming around the same time.

Whats wrong with a bidding model for the bulk electricity market?

This is a bidding market, it's just the granularity of the demand blocks in that market that's changing. It already uses 5 minute dispatch, but the settlement is on 30 minutes.

>We have a fictional belief in "base load" power here rather than responsive power.

What are the time-frames to qualify as 'responsive power'? I can imagine a battery acting like a capacitor and smoothing out supply on a second by second basis, but big pumped hydro like snowy 2.0 can (will) provide 'base load' within 90seconds of being turned on.

Excellent comment.

I’d like to give it the HN equivalent of Reddit Gold... maybe HN could implement something along those lines but instead of keeping the money and removing ads, the money could get donated to something like the EFF?

My favorite thing about HN is that the votes don't matter that much and comments stand on their own. I would not look forward to that addition, unless only the receiver was aware of it.

A cryptocurrency address in poster's profile would do the trick

You can click "favorite" on the story itself and save that to a separate space. Can't favorite individual comments though (yet).

Edit: Yes you can. Click your profile and click favorite comments at the bottom.

  To add a comment here, click on its timestamp to go to its page, then click 'favorite' at the top.

I think the words "Excellent comment" alone show the parent comment as truly an excellent one. I agree, upvotes for both!

Base load is just the minimum power demand. What's fictional about that?

Minimum in what situation? At what price level?

> Minimum in what situation?

Low demand starting at night into early morning. e.g. https://energymag.net/daily-energy-demand-curve/

This is excellent, thanks.

> means re-building the national transmission grid to favour battery models.

You literally can't store enough energy in batteries to power the network. Yesterdays demand for SA was [0] 218,247,760 kWh. At even the most optimistic battery price no one has ever managed to achieve as scale of $100 USD per kWh betteries that's $21,824,776,000 (21 Billion Dollars) for one state, in Australia.

You need to double or triple that to deal with summer heat waves, having enough storage to deal with intermittent renewables etc. You'd be looking at $200 billion for SA alone, with 1.7mil people, to move to battery power, without any of the infrastructure change.

Oh and lithium ion batteries lose half their charge every 10 years or less. So you will need to invest $100 billion every decade. That's $128,381 per person in SA to move to battery power once, and then $6,419.05 per year to replace the lost capacity.

This is a pipe dream wilder than cold fusion.

[0] https://www.aemo.com.au/

> Oh and lithium ion batteries lose half their charge every 10 years or less.

Most Teslas sold today will still be driving with their original batteries and well over 60-70% of their capacity well beyond ten years. Tesla warranty actually covers them up to 8 years up to 70%. Meaning they are fully confident they can promise that and keep their money in the bank.

> even the most optimistic battery price no one has ever managed to achieve as scale of $100 USD per kWh

Cost keeps dropping: https://about.bnef.com/blog/behind-scenes-take-lithium-ion-b.... Ten years is a lot of time and Tesla just announced the desire/goal to increase production capacity to about 1 Twh/year (i.e. about a 35x change relative to production today). Whatever the cost is going to be in ten years, it's going to be nowhere near what it is today. Well below 100$/kwh in ten years certainly.

> Yesterdays demand for SA was [0] 218,247,760 kWh.

You seem to assume a complete lack of wind and solar on a day (unlikely) is going to require 100% battery reserve. That scenario is very unlikely. It might happen locally a couple of times per year but you could simply import power for regions elsewhere in Australia via a cable. Or you could install some over capacity solar to ensure that even at reduced efficiency you still get some power and use the surplus that you end up having for other purposes (clean water, producing hydrogen, etc.).

In any case, nobody is talking about rolling out that much battery. So we're talking way less battery that will cost less than you assume and lasts much longer than you assume and that will allow for the retirement of some very expensive aging coal/gas plants (which you should factor into your numbers).

And Tesla batteries are living a harsher life than grid storage cells. Thermal management, charge levels, and charging speeds are much more difficult to balance in a car than in a grid battery.

There is wind at night. It's extremely unlikely that all renewables produce no power at all for a whole day. Batteries are perfectly fine to smooth over a 50% dip in power generation over a few hours. For longer periods (i.e. winter) you want power-to-gas and gas plants.

Also, 21 billion is actually not that much. Coal power costs about $2k per kW (or more[1]), so having enough coal plants to satisfy that demand would cost about 18 billion.

[1] https://www.synapse-energy.com/sites/default/files/SynapsePa...

Your total energy demand figure for SA is incorrect.

For 29/7/2019 (midnight to midnight), total energy demand was 34,700 MWh.

(Go to https://www.aemo.com.au/Electricity/National-Electricity-Mar... and download the SA data for Current Month. Divide the TOTALDEMAND in each half hour settlement interval by 2 to get MWh, then add them up for 48 intervals for the day in question.)

> You literally can't store enough energy in batteries to power the network

You need that only when renewable production goes to zero, that happens pretty much never. Your PV production goes to 0 at night but demand is lower at this time.

So yes, it is completely feasible to do battery load averaging if you do the math correctly

One can't run an industrial society on an agrarian power source. If we want to go on a holiday for winter, like the good old days, brilliant. But be honest. And be honest what will happen when China realizes that you can't power the grid and all those military bases only work at 50% efficiency in winter.

China has the biggest hydroelectric dam in the world, I think they will be just fine (though I'm not sure it does pumped hydro - they probably don't bother).

I think the point was that China would take advantage of the energy weakness of other countries during the winter somehow.

Ironically that is /really/ obsolete thinking. Pax atomica says hi for one.

Nitroglycerin will make war too horrible to fight.

Wonder where I've heard that before.

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