By Brendon Harre
New Zealand’s energy and electricity system is complicated. It is hard to understand because it requires three variable thinking to solve a trilemma problem.
New Zealand is in a difficult place in the global transition to decarbonised electricity usage. The country has the unique problem of having a largely renewable electricity system that in ordinary hydrological years provides the country with all the electricity it needs, but in dry years, which occur once or twice a decade, there is a winter shortfall that requires the extensive use of gas and coal, and industrial curtailment due to high wholesale electricity prices.
It is a fact that New Zealand’s hydropower has a cycle of variability that is years long. New Zealand’s other main types of electricity generation have the following characteristics, geothermal is good baseload - it has virtually no variability in its rate of production, the economics of its generation is it is best run at a steady rate. Coal and gas fuelled electricity production can be turned on whenever needed, it takes some hours to warm up etc but as long as there is a coal and gas stockpile available then there is no issue with this backup supply. Solar has a predictable daily intermittent cycle with a little added cloudiness variability. Wind has a cycle of variability that is weeks long as weather systems pass over the country. On a seasonal and yearly basis both solar and wind have a predictable level of output.
New Zealand’s recent experience with the electricity transition has been that large industrial energy users, especially in the forestry processing industry, are permanently exiting the market. The reason the exiting businesses give for leaving is high and fluctuating short-term electricity prices. Mercury Energy – a gentailer – denies there is a straight line between energy prices and company closures, yet despite Mercury’s denials energy prices do seem to be a factor.
New Zealand is hoping to expand its electricity generation capacity by 80% in the coming decades to take advantage of the global electrification trend, so it is concerning that large scale electricity users at this early stage are being priced out of the market. This indicates the electrification transition is not going smoothly, and the country may lose out to other places that manage the process better.
Providing energy storage or a ‘battery’ for New Zealand’s entire electricity system to counter the dry year risk would be very expensive. Preliminary estimates of the capital costs for a ‘battery’ that would solve the variable hydrological problem was $16 bln for the Lake Onslow project and $13 bln for a portfolio of smaller projects. The most expensive option of building the giant Onslow pumped hydro battery would have the highest upfront capital costs but the lowest ongoing running costs.
This dry year issue demonstrates the tension between security and affordability. For illustrative purposes $16 bln works out at about $8000 per New Zealand household to provide them each with the equivalent of a 1000 kWh gravitational battery. Also, because households only make about a third of electricity demand in New Zealand this upfront capital cost could be spread across even more electricity users and therefore lower the per household cost. Unfortunately the full report from the NZ Battery Project investigation was never completed because the current government cancelled the investigation six months before its final business case report was due.
Continuing with the status quo means using fossil fuel powered peaker units to cover dry years (and at other times when maximum electricity production is required). In the future this will require importing LNG, as it is unlikely that a new domestic gas field will be found and even if found, like Maui and New Zealand’s other gas fields, over time it will be depleted.
LNG thermal peaker plants will be expensive, the resulting electricity will cost at least three times the ordinary megawatt hour prices, and it also adds the third factor of the energy trilemma problem of not being environmentally sustainable.
LNG imports may have the potential to put a cap on wholesale electricity prices in the absence of major structural reforms…
Meridian Energy chief executive Neal Barclay said on Wednesday that, at current prices, imported LNG could be used to produce electricity at a price of between $200 and $300 a megawatt hour.
So, relying on fossil fuel thermal generation as New Zealand’s back-up electricity supply will have high ongoing operating costs.
The New Zealand electricity market is dominated by four large generating and retail power companies called gentailers. Historically new entrant retailers in the electricity market have struggled because customers want long-term contracts which requires the retailers to buy electricity from the short-term wholesale market. This exposes them to the risk of peak spot and dry year electricity prices.
The gentailers who own New Zealand’s large hydroelectric and geothermal generation and who have the largest customer base are not incentivised by the market structure to solve the dry year problem because the increase in wholesale electricity prices when there is the fear or the actuality of a dry year more than compensates them for any loss in generation they experience during the dry year.
The wholesale market is structured so that if there is an oversupply in wholesale electricity generation then short-term spot electricity prices fall well below the cost to build new generation. This occurs for long periods – months and years – when New Zealand experiences ordinary hydrological conditions. This limits the investment in new generation, even though the lowest cost generation, which is wind and solar has had falling costs for many years.
The electricity market as it is currently configured is always on the precipice of under supply and whenever a dry year occurs (which is highly unpredictable) and supply falls off the cliff then prices spike many times over.
The only way for solar and wind generators to consistently profit from selling on the short-term wholesale spot price market is to store some of their production for times when the market is under supplied, and prices are high. Another possible solution for new wind and solar generators is they could get into the retail business by offering long-term 24/7 contracts to a steady customer base. Both options would require the new intermittent generation businesses to invest in energy storage options. Genesis has experimented with a new electricity contractual product which shows there is market demand for the second option of providing long-term 24/7 guaranteed supply.
Genesis who is the gentailer with the most fossil fuel thermal units has started to provide to the market a guaranteed generation product called the Huntly Firming Option (HFO). Each HFO secures 1 MW of generation, available 24/7, for a fixed price for the next two calendar years. Genesis Energy says demand for its new derivative product has exceeded supply. The power generator and retailer said 85 megawatts (MW) of HFOs have been secured by a number of participants after bids for 270MW were lodged.
In theory, if New Zealand households were to go fully electric, by installing rooftop solar, and switching to all electric appliances including for transport (so electric vehicles) then each household would save $thousands a year and the country would save $billions a year.
There is a campaign for New Zealand to replicate Australia’s rooftop solar success with the claimed prize being the country would save $95 billion by 2040. This was most clearly articulated on a Q+A interview called - The case for electrification – which discussed some of the economics of electrification. Unfortunately, what this campaign does not explain is how these households would get through winter cold snaps when electricity demand is up, and solar production is down. The campaign doesn’t explain the mechanism that would provide a guarantee to purchase electricity when solar households produce excess and would have the capacity to supply electricity when solar households require it, at a tariff price that means for New Zealand’s household sector switching to being solar powered is a good economic investment.
New Zealand is different from Australia. Household peak demand in New Zealand is a extended winter cold snap. In Australia it is a summer heatwave. Australia’s heatwave problem is better aligned with peak solar generation. Even worse, New Zealand’s winter cold snap problem intersects with the country’s dry hydrological year problem. As explained earlier, the current market structure does not encourage the major suppliers of electricity – the gentailers – to solve this problem. Basically, this means that if rooftop solar households want to stay connected to the grid to ensure they have electricity supply during a winter cold snap, then the gentailers are not incentivised by the market structure to provide these households with the tariffs that will allow them to unlock the $thousands in savings that are theoretically available. No entity, including the government can promise the entire household sector that they will supply them with low priced electricity at any time they need it because in a dry hydrological year New Zealand is under supplied with electricity.
The roof top solar campaigners need to stop fudging. They either need to openly say what they are advocating for is households going off-grid which is a viable solution for only a small percentage of people. Alternatively, if they are advocating for a general solution for all households then they need to explain how they will address the security of supply factor of the energy trilemma.
Former Green Party leader James Shaw who since leaving parliament has gone back to being a corporate investment advisor has stated that importing LNG is not the solution for New Zealand’s dry year problem. He does though think that the Queensland Sunshine Hydro company could be helpful if it came to New Zealand. It is worthwhile looking further into the model behind his suggestion, because it has several interesting features that could in a localised manner address New Zealand’s energy trilemma problem.
Sunshine Hydro’s business model like the Genesis Huntly Firming Option offers a 24/7 long-term electricity supply solution to its contracted customers. Unlike Genesis its business model achieves this by using carbon free energy sources – large scale wind and solar. It firms its renewable energy generation in several different ways. Firstly, with much smaller scale pumped hydro projects than the giant Onslow proposal (because the intermittent cycle is only days long), secondly it proposes it will invest in intermittent hydrogen production for ammonia or methanol purposes, and thirdly with clever software that balances demand and supply operations. The third option of using distributed energy sources, including EV batteries, and ripple control of air conditioning and water heating could be a quite effective virtual battery that many places are innovating with.
Source: The Power is in your hands!
I am not convinced about the economics of producing hydrogen from intermittent renewables at this stage, but there is huge global pressure to find a use for excess solar and wind production which frequently drops to basically nothing in price. So maybe there will be progress in this area.
Separate to the hydrogen industrial production issue, it would make sense for the Sunshine Hydro business model to have a diversity of customer types because industrial and commercial electricity users have different demand profiles to households, so there are offsetting opportunities. It might be advantageous, for instance, for an industrial company to agree in advance to a planned winter shutdown in exchange for guaranteed lower priced electricity during the remainder of the year. This opportunity arises because on a seasonal basis solar production is predictable, there will be more generation in summer relative to winter, and on the demand side, households predictably use more electricity in the winter than in the summer. Also note there are already some large-scale offsetting users who naturally only consume electricity during the summer, such as Canterbury’s irrigators.
Building a localised energy store to convert solar’s daily intermittent cycle to a 24/7 baseload supply could be an affordable option for a localised customer group. This group could build storage systems relatively cheaply compared to the costs of a seasonal or yearly storage battery for the whole of the electricity system – such as Onslow. It could also be built at a lower cost compared to thousands of households having to buy and install their own energy storage systems.
How could this work?
The nature of New Zealand’s geography is the sort of elevation difference needed for pumped hydro is quite common. Recently I took a multi-day train journey from Stockholm to Copenhagen, to Berlin, and then to Warsaw. I saw plenty of wind turbines, rooftop solar, and large fields of solar panels, but I rarely saw steep hills (with a gradient of at least 1 in 10) that had a height drop of greater than100m which affordable pumped hydro requires.
This indicates to me that low-cost pumped hydro gravitational storage batteries could be a competitive advantage for New Zealand.
The basic formula for gravitational potential energy is mass times gravity times the height difference in metres. The website Omni has a potential energy calculator. On this website you can select the energy store units that the calculation produces – joules, watt hours, calories etc - kWh is a good option because it allows comparison with batteries used in home solar systems.
I spent a few hours on topomap.co.nz looking around my local area near Christchurch for potential small-scale pumped hydro sites. I relatively quickly found one that I liked. It may not be the best location, a more thorough search could find many alternatives which might have better characteristics, but it seems quite good.
I quite liked the hilltop by Bossu Road 400m above Lake Forsyth. Although, I think there could be dozens, if not hundreds of equally good sites for small scale pumped hydro in the Canterbury area where I live. Most regions in New Zealand would have a similar set of opportunities.
My thinking was a reservoir could be built similar to those in Waipara wine valley that are approximately 200m by 200m in surface area and about 4 metre deep. This would store 160 million litres of water.
Which given the necessary civil works, such as a penstock pipe and a bidirectional generator pump could store 174,000 kWh of energy. This is over 10,000 times more storage capacity than a home solar battery would achieve. Ten thousand lithium batteries for home solar systems would cost over $100m (note buying and installing solar panels would double or more this cost). The capital costs of the pumping and generating station, the penstock, and the reservoir should be significantly cheaper than that. So this one pumped hydro project if it was paired with something like the $104m Canterbury Lauriston Solar Farm could provide an affordable 24/7 electricity supply solution for over 10,000 household customers. This is about 5% of the homes in Canterbury.
It may make commercial sense to build a larger reservoir on the site that uses the full dimensions of the hilltop and is much deeper – increasing the water and therefore energy storage capacity many times over. This would cost more but these costs would be spread across more customers. A full commercial business case would determine the sweet spot for how much to invest in civil works. Queensland has fully committed to a number of pumped hydro projects so there are civil works contractors in Australasia with the expertise to do this work.
Luddington Pumped Hydro Scheme
For instance, the Luddington pumped hydro scheme above Lake Michigan has a reservoir that is 30m deep. It was built in the 1970s because local nuclear power plants were steady state power generators. The local electricity company needed to store excess energy overnight, so they built the pumped hydro scheme. More recently they have invested in upgrading Luddington because they want to store excess solar and wind energy. There is a good video which describes this history.
If the Sunshine Solar business model did come to New Zealand it has the potential to be a significant market disrupter.
It is possible the dry-year and energy security risk more generally could shift from being a New Zealand wide consumer problem to being a specific gentailer producer problem. Each time wholesale electricity prices spiked because of fears of under supply then consumers would leave the gentailers who have the highest energy security risk and shift to more reliable and more affordable Sunshine Hydro type suppliers.
On a personal basis as an electricity consumer, I would be interested in the competitive effect of this potential market disruption. I would certainly consider buying my electricity from a Sunshine Hydro type supplier. I would also consider investing in such a company rather than paying to install and maintain my own household solar and battery system. Additionally, I think my KiwiSaver provider should be investigating this sort of reliable return long-term investment.
89 Comments
Good article.
I spend hours on Topomap, looking at pumped hydro options.
The latest one to interest me , is to pump from Lakes Te Anau/ Manapouri (which have very little storage), to a header lake above Lake Whakatipu , with the added benefit of feeding the Clutha river schemes.
Thanks Solardb.
I like the Lake Forsyth option because there is good road access for civil works. The penstock pipe is relatively short from the top storage reservoir down to Lake Forsyth - less than 1km. It has a good head of 400m. No tunneling is required. A pipe(s) down the hillside should be fine.
Potentially it could be a much bigger pumped hydro project if instead of a simple agricultural pond that I outlined in the paper a more substantial reservoir was built with double the surface area and the depth increased five fold to 20m. This would store 10 times the amount of energy and if paired with enough solar would provide a security of electricity supply solution for 100,000 households.
"If there is a scope or need for pumped hydro storage
in New Zealand, it has already largely been built and tested on the Tekapo canal. All that is
technically required to make use of this existing asset is to buy pumps and install them in their prebuilt
locations at Tekapo A and B power stations. This could be accomplished in less than two years
at an estimated cost of less than NZ$100 million, and, assuming the completed pumped hydro
scheme would be operated coordinated with other adjacent generation assets, could provide backup,
firming and energy storage capacity for several hundred MW of new and future wind or solar
generation development. There are no technical barriers preventing the completion of the pumped
hydro scheme at the Tekapo canal and the comparatively small financial outlay required, would
make it one of the most cost-effective pumped hydro schemes realizable anywhere in the world."
https://img.scoop.co.nz/media/pdfs/2308/Pumped_Hydro_its_already_built_…
The numbers are important. The Canterbury Lauriston solar farm will cost about $100m to provide intermittant electricity to the equivalent of 13,000 households. The pumped hydro scheme I described is really simple. The civil works should be under $10m. If this can be generalised then for a 10% increase in cost to grid scale solar this generation can be turned into reliable baseload supply. That is a massive competitive advantage that few other countries will have.
Not sure about your cost estimates, but do like the thinking.
There is a storage lake(s) near me for irrigation developed on the flat with easy access that was commenced in 2011 (investigation and consent work began years earlier) and a not dissimilar scale to that which you propose...cost estimated then were 80 million....Im pretty sure it overran and by all accounts leaks .
https://www.stuff.co.nz/timaru-herald/features/4844761/Moving-earth-for…
Thanks for the link Frank.
Converting numbers can be confusing.
1 hectare = 100m x 100m
1 cubic metre = 1000 litres
The $80m+ storage lakes near you is significantly bigger than what I am proposing.
Your lakes are 7 ponds covering 280 hectares.
They store 16 million cubic meters of water which is 16 billion litres.
Whereas the simplest version of my scheme has an upper storage reservoir which is 200m x 200m so 4 hectares and it would store 160 million litres of water.
So it is about 100 times smaller.
Love the misleading maths there, Frank.
Pumped hydro is saved for smoothing out the peaks.
It is NOT used for providing 100% of the load to 10,000 houses.
In a smoothing role, it could cater for 10 or 100 times that number of households and possibly more. Remember, as a 'green peaker' it'd only be needed for 2-3 hours in the morning or evening.
These schemes are everywhere else in the world .... except NZ.
Sigh...you miss the point Chris, if we are to develop such infrastructure then the costs and risks are better taken at a scale that provides some flexibility...would we say go to the trouble of building a gas/coal peaker plant and only store a day or twos fuel , or say a car with a 1 litre fuel tank?...they would work but would not be effective.
A 160 million litre lake/pond would provide a very brief capacity....a capacity that lessens the justification for the associated infrastructure costs, both initial and ongoing.
"if we are to develop such infrastructure then the costs and risks are better taken at a scale that provides some flexibility"
LOL, so Think Big, huh?
Or yet another example of what Winston Churchill famously said “perfection is the enemy of progress”?
In any event, you're way wrong. There was a very specific reason why I finished with ...
These schemes are everywhere else in the world .... except NZ.
It quickly establishes whether people know anything about the subject. Why? Because there are smaller pump-hydro schemes popping up all over the world as green-peakers. No two are the same, but all do the same thing. And almost all have positive ROIs. And some are even smaller than what Brendon is proposing as they work extremely well with renewable but intermittent generation like wind and solar generation.
Ffestiniog Power Station's reservoir is about 400 x 200.
The upper reservoir can be seen to left in this link:
https://google.com/maps/place/Power+Station,+Tanygrisiau,+Blaenau+Ffest…
Ffestiniog is used for daily load smoothing, hence the lower reservoir is dammed.
(See what I did there? i.e. pumped-hydro above our existing dams? ;-)
The 3 solar Ashburton farms Lauriston,Tinwald and Mt Sommers are for the Summer irrigation and pack house peak.They pair with Highbank,Coleridge and Tekapo hydro.Highbank is a dual purpose Hydro scheme,providing water for irrigation,and switching to generation out of season.This negates the need for pumped storage for this application.
A point worth remembering is that pumped hydro options are all net electricity consumers.
Another option is to use more renewables (wind, solar, wave, tidal, geothermal, etc) so that more water stays behind the existing damns.
Of course, such a solution will never fly while the gentailers all want to ensure their damns are making them as much money as they can squeeze out of NZ Inc.
Good article.
All options need government intervention. The localised pumped hydro solutions aren't bad at all, but I doubt we could build more than 2-3 as the cost to build them is quite large still if you are going to support in the 10's of thousands of homes.
What we really need is a mixture of options. Turn huntly into a pellet burning operation and build a pellet plant to use all of the stored solar of the central NI pine forests. Then operate a 4 well geothermal plant with 1 going at any one time, switching them over every few days/weeks to keep them all operational, ramping up to all 4 in operation during a dry year. Any electricity coming from that operation is sold at something like double the average rate of the last years cost. Then the dry year problem is mostly solved. The government as 51% shareholder of some of the gentailers can make these happen, they choose not to.
We should go solar and electric car ripple control anyway and put the necessary subsidy policy settings in place so that they both happen. Having too much electricity where our backbone supply is hydro is a good problem to have as it will mean industry can run cheaper during periods of high production. Add in some offshore wind farms and a proper reset of the gentailer model (I would be keen on transferring the assets back to Transpower, for instance, and the government essentially splitting the companies between generation owned by government mainly, retail run by corporates) and we won't have much of a problem anymore. One thing is certain however, doing nothing as we currently are, will get us into real trouble.
Good thing about central NI or south Waikato preferably (Tokoroa) is that its next to the forestry, Huntly isn't far away and its near to big consumers. I would actually just go large with enough to supply Huntly's 4 generators, you barely even have to change existing generation infrastructure as well, which adds another huge cost.
You could go more distributed (Nelson's golden downs forests another location for local generation), but the building of the generation is another extra cost.
Exactly, we should reuse any existing infra that we have for these sort of projects to keep costs down.
But that's not the only thing that matters, energy security is paramount too, so full electric everything with multiple generation options and a huge distributed backup ripple control via plugged in car batteries, is the way to go in an NZ context.
If you want to back up NZs entire electricity system then the main security of supply risk is the gentailer dry hydrological year problem which requires terrawatt hours of backup supply. EV batteries etc is not enough. It requires something big like Onslow or a portfolio of projects that add up to Onslow.
An excess electricity "problem" is not really a problem. With a smarter grid it would mean all plugged in electric cars with ripple control can be charged, the big batteries companies are installing could be charged, home batteries could be charged, prices would drop through the floor and industry can ramp up its electricity use, more jobs, more economic activity. Its not like we could implement all these things overnight and suddenly produce a surplus, the ramp up would be slow.
We literally have companies shutting down completely (forestry related) and major companies limiting their use (methanex/aluminium smelter) because of an under supply. Its not rocket science to understand what an over supply would do.
For the past few weeks lake Manapouri has been spilling more than 600m3/s of water
https://www.meridianenergy.co.nz/power-stations/lake-levels
which is equivalent to wasting about 20% of NZ electricity consumption.
There are only 2 ways to prevent that wastage,
1) Increase the generation capacity of Manapouri power station,
2) Increase the storage capacity of lakes Te Anau and Manapouri.
Yes, those lakes have very little storage.operating range of only a metre or so.probably why the constant load smelter was a good idea. I think turning a pot line there off or on is a months long process, otherwise it would be an ideal excess load. Why I suggested pumping from te anau would be good , especially if it can be recycled into wakatipu, and the Clyde system.
Manapouri has had 2 units out of commission since Jan 23,( transformer issues) the replacements are due Mar 25 Oct 25.They have also has 44MW out at Westwind with a failed Transformer.The later being replaced by a loan transformer from Transpower in Oct,with a permanent replacement due late 25.
Dougal McQueen gives an overview of some possible pumped storage sites in New Zealand - at this link.
Also, I have a short article in # 62 of the NZ Hydrological Society Newsletter.
I think that coal mine would be in material too unconsolidated for pumped storage. It's best to have hard rock .. see the Kidson pumped storage scheme in Australia. It might happen that the Macraes mine in Central Otago could be suitable later. I sometimes wonder if the exploratory rock drill cores taken from around Lake Onslow were also examined for gold content.
You can make your own "mine" for pumped storage of course. If you go deep enough, the underground chamber (lower reservoir) does not have to be so big. A pumped storage scheme of that type was considered in concept for Singapore. Near Auckland, a Hunua reservoir might serve as the upper reservoir above a rock chamber far below - to give Auckland emergency power for a short time if needed. It would be very expensive though and Auckland probably has more pressing issues presently.
re ... "national parks put a spanner in the works"
They (national parks) shouldn't put a spanner in the works. If greenies (and I'm one) really want to save our planet then pumped hydro is an excellent way to do it. National parks, simply because they are national parks shouldn't be a blocker. Even more so when alternatives like LNG are considered at an alternative (which is simply, mind-numbingly, stupid).
Every year we export the equivalent of the Maui gas field energy, when found, in export logs. We could be using the lower end to drive process heat (instead of electricity) and also black pellets for Huntly, and others - they are looking at it.
It's home grown, renewable and regional. It's not the whole solution by any means, and won't stack up in some places, but its reliable supply, on call, not import reliant and should be looked at as an important part of the solution. We seem to have a mental block on the original energy source for humanity. As you look into your fire or wood burner wondering where we could get energy remember what you are watching.
We are one of the lucky countries that has this option.
Wood processing has not sat on its hands. It is simply a very competitive international market with loads of tariff and non tariff barriers.
"“We also generate all our energy requirements for heat and power from our co-generation plant where our fuel source is renewable sawdust, shavings and bark. We are a net exporter of power.”"
https://www.rotoruanz.com/stories-articles/red-stag
https://innovatek.co.nz/mill-turning-1m-loss-into-500000-profit/
Crazy wood products going to landfill. Tairua sawmill had to close because it couldn't get rid of its sawdust.well that,and the owners bad habit of letting it slide into the estuary. We used to go and get truckloads of sawdust from the Whitianga mill, mixed it with fish waste and / or chicken shit, compost next year.
Cogen probably the best use for it, started in nz by dairy factories that needed low pressure steam, ideal way to drop pressure is to run through turbine, well probably engine in those days. Didn't call it cogen then.
They have trialled torrified wood pellets, which went well, and if you read their Annual report a real option. Straight sawdust dosnt work for them plus you wouldn't get enough volume as mills these days normally burn it anyway or landscape users pay more.
Older boilers need pellets, marginal, and newer ones can take drier chip - very economic as other options disappear, gas, and LNGs true cost is realised, it is very viable and even nationally sensible.
Apart from Huntly, buring wood to make electricity is not viable really. Best used in process heat.
The real challenge in regions maybe getting fibre as costs and rules re harvest and roading on steep sites make a lot of the forest estate uneconomic - just like all hard hill country landuses are becoming.
Straight sawdust does work for them - it could be injected or blended in with coal. Problem was they didn't want to pay for the freight and like you say the mills just ended up using the sawdust themselves. You blow a lot of energy making the pellet and requires specific dry storage and handling. Places like Brazil use a lot of direct wood firing for grain drying etc without going down the pellet route.
Agree on white pellet - it's crazy and if you look around the world the big players have all gone broke. Torrified is expensive but if your looking for a coal replacement drop in it works. Ok for peak load and dry times.
Otherwise use dry chip. It's the old story every time you touch something it costs. Keep it simple. The main problem is people think all this fibre is waste and free. It's not and costs but if your not going to burn fossil fuels it's very competitive in process heat vs electrification.
The way I understand it, The torrefied pellets act like a coal like-for-like replacement in terms of the storage. Can be stored outside in the rain in the same spot where it currently sits at Huntly for months or even years before use during a dry year or other winter need.
Where as the white pellets and sawdust can't be stored outside. Require almost instant use (to be economic). hence their existing use in some of the small co-gen plants at mills. But not at a 250MW rankine scale.
Enjoyed that, thanks Brendon.
Pump hydro of this scale is better option than battery storage in many respects, as it provides seasonal storage as well as the intraday storage which batteries currently provide. To those of you who say storage is a net consumer of energy - this is not the case when this energy would otherwise be wasted. Already we have periods, particularly overnight, where hundreds of MW of wind are curtailed because supply > demand, not too mention the hundreds of GWh of energy which is spilled each year on the back of lakes being over their consented limits. This is only likely to increase with the increased proliferation of wind and solar. Managed well, pumped storage would be able to fill itself when when there is an excess of renewables and/or when hydro storage elsewhere was near the limits, minimising potential spill later on.
174,000 kWh (174 GWh) of energy storage is significant (current national hydro storage c. 4,600 GWh, Huntly coal stockpile c. 2000 GWh), though I do wonder about the cost and timescales given NZ's track records with any sizable infrastructure project, not to mention difficulties obtaining the consents. Also has the cost of the generator been factored in? If so how many MW do you think would be attached to a scheme of this size?
"To those of you who say storage is a net consumer of energy - this is not the case when this energy would otherwise be wasted."
Two issues with that statement:
1. Sorry, no pumped-hydro scheme is 100% efficient. The best are 90%. I.e. 10% of electricity gets used in the pumping process.
2. Electricity is never wasted in the way you suggest. The supply gets turned down. That's one of the great things about hydro, it can be ramped up, or turned down, in minutes.
Some further reading if you're included to know more:
https://en.wikipedia.org/wiki/Cruachan_Power_Station (capable of a black start to the UK national grid !!!)
https://en.wikipedia.org/wiki/Dinorwig_Power_Station (operated not only to help meet peak loads but also as a short term operating reserve (STOR), providing a fast response to short-term rapid changes in power demand or sudden loss of power stations.)
(Been to both of those.)
Agree in the case of hydro you can simply turn down and save the water for another time (assuming there is room in the lake, otherwise you get spill) but in the case of wind and solar, without storage where exactly do think this energy goes when these are forced to turn down?
Thanks for the links, and correct the other losses are significant but these can be offset somewhat by saving lost energy from elsewhere.
Yes, but the point is solar at least shouldn't be seen as a threat to grid stability, as some older hands fear. As inverter technology improves they should be seen as been able to smooth the grid, not create spikes etc, as the sun goes behind a cloud, and the peak production that occurs when you have an edge of cloud effect.
But obviously, if that extra production can be stored, all the better.
With a sufficiently large energy storage capacity, a pumped storage scheme can operate at more than 100% efficiency. However, this has to be defined in the context of being associated with a larger hydro system with limited storage capacity. For example, the Lake Onslow scheme was estimated to operate at about 70% round trip efficiency, with respect to that specific scheme. But this can go to more than 100% if the efficiency is measured with respect to a system expanded to, say, Onslow + the Waitaki hydro scheme.
Spill years on the Waitaki scheme are not common, but there is a large amount of generating opportunity lost when they do happen. This is because the Waitaki scheme is a cascade system with many stations down the river - so they can all spill together. It is also more than just visible water spill in a spillway - spill from Lake Tekapo as flow down the Tekapo River bypasses the Genesis Tekapo A and B stations, and also Meridian's Ohau A, Ohau B and Ohou C stations.
With Onslow in operation, high lake levels at Tekapo and Pukaki will generally correspond to low wholesale power prices and Onslow's 1000 MW would pump water, using purchased power generated from water released from storage in the two lakes. Thus the high hydro lake water levels will now decline. With hydro lake levels less often near the their maximum, large lake inflow events (always unpredictable) can now be held and later used to generate power, rather than being lost as spill.
In a commercial sense, Onslow would still operate at 70% efficiency as far as the Onslow owners are concerned. At the same time, Genesis and Meridian are gifted what amounts to a free hydro power station because their stations now operate at greater efficiency.
If Onslow was operating, the larger system would be Onslow + all the NZ hydro lakes. So, for example, more power on average would be generated from the Mercury Waikato River stations as well.
Hydro spill will become increasingly evident with more wind and solar generation capacity. There will then be times when wind and solar power is available beyond demand and hydro generation will be reduced. However, rivers will still flow into the hydro lakes and the lake levels will eventually rise toward their maximum levels because less water has been released for power generation. In the absence of Onslow, that will lead to more spill events. The hydro lakes being high more often will not help with dry years because the increased wind and solar generation capacity will be needed to meet the increased demand from the green transition. The hydro lakes would thus still fall at the same rate as at present when the river inflows decline in a future dry year.
This is all an aside to the original article, which is concerned with much smaller pumped storage schemes (in the energy storage sense) and they would operate in the usual single battery way of less than 100% efficiency.
Thanks Earl your expertise is always insightful. It is a shame that the big gentailers do not see Onslow as something that would make their businesses more productive.
I think it is possible if there was enough market disruption from new Sunshine Hydro type electricity retailers taking market share then they could change their attitude.
Thanks Earl.
Yes indeed, when an entire system is considered, as you've done, efficiency can indeed improve especially when lost generation due to spill is factored in.
Which quite neatly supports what Brendan is saying. I.e. lots of smaller pump-hydro can mean there is significant storage capacity available, (eventually approaching Onslow's size?), that can save the spill generated electricity as potential gravitational energy for subsequent use. And lots of smaller pump-hydro sites will have varying 'prices' at which the consume and release energy which provides a further price smoothing effect albeit not as great as a mega-site like Onslow's would have (which may or may not be a good thing).
On a development cost per kWh basis - (just to further contradict Frank's 'think big' mentality) - lots of smaller pumped-hydro can actually work out less, about the same, or just slightly more than mega-schemes, as sites can be cherry-picked (low-hanging fruit) on a development cost basis rather than a single-solution basis (i.e. a mega-scheme).
Again, whether this can actually work comes from evaluation the system as a whole. Which is extremely difficult when private property rights are conferred to gentailers at the public's, and other businesses', expense.
Hi Chris, good comment. To get up to the scale of Onslow NZ would need to build a thousand schemes similar to my Lake Forsyth proposal. It is hard to know if this would be cheaper or more expensive than building Onslow - my suspicion is some of it on a per kwh capital cost would be cheaper but once those cheaper options were cherry picked it would become more expensive.
The main beneficiary of the majority of that storage capacity would be Meridan, Mercury, Contact and Genesis who are significantly exposed to the dry year risk. So, they should pay to fix this problem or else they should suffer consequences, which is their long-term supply contracts being discounted in price because they cannot guarantee supply.
For Sunshine Hydro type companies that are not exposed to the dry hydrological year risk their storage needs are considerably smaller and schemes similar to what I outline in my paper should work fine.
It's important to define what is meant by "size" of a pumped storage scheme - energy storage capacity or generating capacity. Onslow's storage capacity is large at 5 TWh (the world's largest in fact). There would need to be 29,000 of Brendon's pumped storage schemes to collectively match that storage capacity. So it's really a non-starter to think of meeting the needs of dry years by having a lot of small schemes.
However, it wouldn't take many relatively small schemes (in the energy storage sense) to sum together to equal the 1000 MW generating capacity of the Onslow scheme. Even with Onslow in operation, such schemes would be needed for additional firming of new wind and solar as the green transition proceeds. They would be more efficient too - probably round trip efficiencies of 80% compared to Onslow's 70%. Onslow would provide short-term firming as an additional function, but it's reason for construction would be for giving extended generation in dry years. It's not a question of either / or. A mega-scheme (by storage) like Onslow plays a different basic role to smaller schemes. Both are likely to be needed.
Agreed.
Lots of smaller pumped-hydro doesn't directly address the dry years issues. What it does do is allow all types of renewals like wind, solar, tidal, etc. to generate a full capacity when the wind blows, the sun shines, the tide runs, etc. thereby reducing the significance (and gentailer gouging) that occurs in dry years.
Until we get a change of government, this is where (forgive the pun) our energies should be focused. And doing things at a local government level gets around some of the blockers central government places upon NZ Inc's electrification.
Alas, doing things locally can't leverage central government's massive balance sheet, but every little poke in the eye will eventually gain access to it.
Thanks Earl for providing the correct figures and comparisons. I have been careful to say that my local pump hydro proposal would not (and can not) solve the dry year problem for all electricity consumers in NZ. But it would solve it for a small localised group that contracts with a solar and wind generating company that has the pumped hydro as a back up.
This would be a useful proof of concept for larger schemes like Onslow.
Yes I have thought that too, creating an economy of scale template would be really useful.
The future spectators (futurolgists?) have thought that distributed electric systems would be an urban thing. But maybe in NZ it would be a rural thing too, with hundreds and maybe thousands of relatively small scale pumped hydro schemes using paired irrigation ponds and other water bodies.
Not only would it speed up the transition to affordable electricification it would provide a lot of security and resilience to the power grid.
I understood it when i got in the way of an 80mm i,d pipe with about 100 metres of head. For some reason it blocked up with a kind of slime. the owner was up the top feeding a 20mm alkathene pipe down to try and clear it . I was clearing the bottom, when boom , knocked me back about 5 metres. Freezing cold too.
Yes , had a good inlet system , and out of a clean stream pond.
It was a strange one , we think a grease or oil used in the pipe manufacturer reacted with the ph of the water in the pond , and created a gel / algae mix. It was like the pipe was full of grease.
After the initial clean , no more problems .
Nice article Brendon.
The electricity market right now would certainly favour getting income from small pumped storage schemes. The price is sometimes not far from zero. This link gives info for the last 24 hours.
The earlier NZ Battery web page gives some background on pumped storage, although mostly related to the large Lake Onslow scheme. The pre-election web page can be seen here.
For those interested, a summary of pumped storage schemes around the world can be found via the interactive global map here.
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