Snowy 2.0 is a snow job
Climate Change response
The World is changing from a fossil fuel to a renewable economy. Resistance to this is considerable but the imperative for change is becoming increasingly obvious and the battlements against change are beginning to crumble. Soon we will be wondering why we didn’t start earlier. However, will it be too late? Can we avoid catastrophic and irreversible climate change? We don’t know. The most recent Intergovernmental Panel on Climate Change (IPCC) report suggests we have just over one decade to make significant headway on carbon reduction.
The Coalition Government is placing great store on a signature project, Snowy 2.0 as a key element of its revamped policy for reducing greenhouse gases to meet international obligations. This is a subterfuge and highlights that the Government, after ten years of denying and resisting effective action on Climate Change, remains sceptical of its very existence. There are other reasons why this Government wants to execute Snowy 2.0.
Snowy 2.0 lacks scrutiny
The decision to commit significant public monies to Snowy 2.0 has now been made. This decision is based on investigations and a business case undertaken by the proponent, Snowy Hydro. However, Snowy 2.0 has been presented and promoted without independent expert review and public scrutiny of this business case, without sufficient consideration of the transformation that is occurring in the National electricity system and, most critically, without critical option evaluation.
Is Snowy 2.0 likely to be sound investment of public monies? It is unlikely. Snowy 2.0 is a centralised electricity storage solution and it is this “all the eggs in one basket” solution that most calls for scrutiny.
Transition — old to new
In the past, the electricity demand pattern was dominated by relatively steady manufacturing based demand. Household demand was relatively low but “peaky” in nature. Over the last several decades, with the decline in manufacturing and growing household affluence, the electricity demand pattern has changed significantly. The critical demand pattern is not daily but occasional. It is now tied to heat waves and to commercial and household air conditioner usage. The critical load factor is a relatively short and rapid rise in demand. In these conditions, demand management and strategically located battery storage capacity is likely to be most effective in the managing supply-demand deficits to acceptable levels.
With the move to renewables we are seeing a rapid shift from large centralised coal-fired generation to much smaller widely dispersed wind and solar electricity generation plants and to household solar. Increasingly these renewable electricity generation plants are associated with battery storage units located in strategic locations. Technology improvements are ongoing and the cost of renewable power facilities and battery storage is declining fast. Also, growing economies of scale are assisting the decline in cost of generating electricity.
Another important change is that the State based electricity networks have morphed into a National grid serving all States except Western Australia.
An objection to both wind and solar is that electricity is not always being generated (often expressed as “the sun doesn’t always shine and the wind doesn’t always blow”). This is not correct because the disperse nature of the renewables and the increasing inter-connection across thousands of miles of Eastern Australia means that reasonable levels of electricity are being produced and distributed into the grid almost all of the time. At this point it gets complex — climate variation, household solar/grid interface, demand management capacity, storage facility locations, risk management criteria, etc. However, it is clear that the diversity and dispersed nature of the “new” generation facilitates the avoidance of major supply outage. Simply, there are greater management options and therefore opportunities to balance supply with demand.
Of course storage is an essential requirement for the modern electricity system but this requirement is not for large remotely located facilities such as Snowy 2.0. The need for such storage is more matched to large coal-fired plants. The truth is that coal-fired plants don’t meet modern supply-demand deficits because they are unable to respond to rapid changes in demand brought on by extremely hot weather. It is a fallacy, often stated by Coalition Government ministers, to suggest that coal-fired power supply is any more effective in dealing with modern demand variations than is renewable power. They both have their limitations — they are just different limitations. For the “old” demand pattern, gas-fired power was important for meeting demand variation. However, for the “new” demand, pattern batteries are likely to be the best match.
Why disperse storage should be considered
Dispersed battery storage units constructed when required and placed where they will be most effective have a number of advantages over Snowy 2.0. These advantages are:
1. Cost
There will be a considerable additional cost of transporting electricity from the new renewable plants located all over the Eastern Australia into the Snowy Mountains and then to transport the re-generated electricity out of the Snowy Mountains to the major demand centres in Victoria, New South Wales, Queensland and South Australia. This cost appears to be blithely passed on to the States and is not included in the financial viability evaluation. There are also additional costs implicit in Snowy 2.0 associated with the following factors.
2. Flexibility
Snowy 2.0 is one large project. There is no flexibility to adjust to changing patterns of demand, supply and the nature of short falls. In the context of the electricity system (supply, transmission and demand) that is undergoing major transformation with uncertain final form, this major upfront commitment is unwise and unlikely to be optimal for the longer term. In contrast small battery storage units can be designed and test operated for optimum long-term operation.
3. Over-investment
Snowy 2.0 requires massive upfront investment that may not have the full benefits realised for many years. In contrast the disperse storage options can be built as and when required.
4. Efficiency
Snowy 2.0 will incur large energy losses. There are the losses of transporting the electricity into and out of the facility plus the very large losses associated with the converting electrical energy to potential energy and then the reverse. These losses are effectively a cost to the project. The disperse options avoid most of these losses through the placement of storage and locations which feed directly into the demand grids.
5. Effectiveness
The release of stored power from Snowy 2.0 will be much slower than for the disperse battery units. For the latter it will be effectively instantaneous.
6. Risk management
Snowy 2.0, as a single large storage facility, has an associated high risk of failure. The risk is in the cutting of the long major transmission mains (due to weather, bushfires or terrorism) that supply the major demand centres. The disperse storage options significantly minimise this risk
Snowy 2.0 is a political and a popularist choice
Why then is Snowy 2.0 so attractive to the Coalition Government? The answer lies in the branding.
Allegories to the Snowy Mountains are politically valuable. The image of a stockman on horseback racing down ravines in pursuit of cattle is evocative of firm and decisive leadership. The original Snowy Mountains Scheme was, in the words of the satiric television program Utopia, “nation building”. A similar “utopian” allure is being attached to Snowy 2.0. For image conscious politicians it simply looks good and is photo-op heaven. The images are of vision, leadership, strength and action. Snowy 2.0 is truly sexy stuff.
Snowy 2.0 also has an implicit message of being the answer to the woes of high electricity charges. This is likely to be a false hope but that realisation will come much later.
Snowy 2.0 is, essentially a “flagship” project that unscrupulous politicians can huff and puff about.
Stocktake and what’s next?
The last IPCC report states that to contain global warming to 1.5°C, will require coal use for energy to fall to between 60% and 80% below 2010 levels by 2030. This should be a call to arms yet the Government denies there is a need for urgency (the Deputy Leader of the Government claimed the IPCC report to be “just another report”).
Snowy 2.0 is worse than just a poorly justified infrastructure project. It is a distraction from real progress on dealing with Climate Change. The money spent is based on a flawed political and popularist notion that the Government will be seen as visionary. A new dawn for Australia, a new Snowy Mountains Scheme!
A comprehensive appraisal is required of how our existing electricity system will transition to completely renewable. This appraisal must establish the key requirements for effective and optimum transition. This particularly relates to how system storage is provided
Instead, the Coalition Government has hijacked the process by adopting flagship projects including Snowy 2.0. This is a classic case of “putting the cart before the horse”. The result will be significant over-investment in non-priority infrastructure. It will also retard and reduce the effectiveness of the inevitable transition to fully renewable electricity provision.
Can we afford for this to happen?
Bernie O’Kane
6 March 2019