Pumped hydro more expensive than batteries: why the winner is unclear

Previous post ended with the conclusion of Brakels’ article that the “winner is unclear”. That is quite a surprising conclusion of an article praising the strengths of the batteries while downplaying the weaknesses. These are the two reasons why Brakels thinks that the winner is unclear (my emphasis):

But because Snowy Hydro 2 may come in at less than the $10 billion or so I expect and because I can’t be certain the additional return from the battery setup will be enough to replace them when they fail, I can’t pick a winner.

The second argument is the most interesting. That statement looks rather cryptic and the meaning depends on the definition of the words “return” and “fail”.

“Return” could mean financial return and “fail” could mean end of economical life (additional financial return of the battery/solar scenario is not enough to replace the installation after its economical life). I will explore this meaning in the following post.

“Return” could also just mean output and “fail” could mean when the additional output of the battery/solar scenario is insufficient (additional output of the setup is not enough to fill in demand and then there would nothing to replace it with). If that is what he means, then he is rightfully pointing to the fatal flaw in his calculation:

Advertisement

Pumped hydro more expensive than batteries: the calculations

Now let’s take a look into the calculations that Ronald Brakels made to prove that hydro power (Snowy Hydro 2.0) is more expensive than battery storage (Hornsdale Power Reserve). His arguments were spread over many paragraphs and at first glance it was not very clear what he was calculating exactly and why. Therefor, I thought it might be a good idea to redo his calculations. This reconstruction will be the subject of this post and I will clearly write out all his calculations in order to better understand his arguments.

The calculation can be divided into three parts.

Pumped hydro more expensive than batteries: the intro

At the end of last week, I came across a SolarQuotes article about Snowy Hydro 2.0 being more expensive than batteries. Snowy Hydro 2.0 is a pumped hydro project in Australia (New South Wales and Victoria) and is currently under construction. The brunt of the article is that pumped hydro is too expensive compared to (grid sized) batteries and the plea is made to halt the project in favor of batteries.

That was new to me. As far as I know, pumped hydro is the cheapest way of dispatchable backup in order to counter intermittency and definitely cheaper than batteries. Yet, the author of this article argues that it is the exact opposite.

The name of the author of the article, Ronald Brakels, rings a bell. Not even a year ago, I wrote a post on his claim that South Australia has the second cheapest electricity in Australia, despite it having the most expensive electricity. He did this by applying two neat tricks, sneakingly morphing South Australia from by far the most expensive to the “second cheapest”.

With that in the back of my mind, I expected some trick(s) to be performed in this one too.

If the goal is to limit emissions…

In previous post, I left off concluding that the displacement of nuclear by natural gas will increase emissions. This based on the notion that displacing a low emission power source by one with a higher emissions will logically result in more emissions.

The big question is of course by how much? Not all nuclear capacity will be replaced by natural gas and solar and wind capacity will increase. To summarize, this is the change that is proposed:

• Solar/PV: from 4787.56 MW now to 11 GWp by 2030
• Wind
  • Offshore wind: from 2,254.4 MWp now to 4,000 GWp by 2030
  • Onshore wind: from 2,578.809 MWp now to 3,500 GWp by 2030
• Natural gas: from 5,300 MW now to 5,600 MW
• Nuclear: from 6,000 MW now to 0 MW.

Although the needed capacity of dispatchable power decreases very slowly compared the rapidly increasing peak production, the total amount of electricity produced by natural gas fired power plants will get smaller, therefor less emissions will be produced. This makes the dispatchable power sources less to not economical viable, but it might limit those extra emissions within reasonable bounds.

It might even be possible to find ways to lower emissions instead of limit them. There was an interesting response to the tweet of our Minister of energy. It was in French and if his twitter account information is truthful, the response came from an economist connected to an energy company: