Author Archives: trustyetverify

Pumped hydro more expensive than batteries: battery replacement(s)

Even when accepting the flawed calculations of Ronald Brakels, it provided only a fragile win for the battery scenario. This prompted him to start a new calculation in order to justify the battery/solar setup. It involves a battery system that is currently being built: the Victorian Big Battery. His reasoning is that battery prices drop rapidly and he also proposes a way to set aside some the initial investment in order to replace the battery at the end of its economical life.

Let’s just jump right in. This is the information he gathered about the Victorian Big Battery:

  • Capacity: 300 MW
  • Storage capacity: 450 MWh
  • Price: AU$180,000,000
    (again no justification for this price tag, just his hunch)

Then he repeats the flawed calculation by calculate the price:

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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:

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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.

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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.

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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:

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Nuclear undercutting wind?

This is already the third post in the series on the tweets of the Belgian Minister of Energy about offshore windmills that were temporary shut down on July 29. The first post was about the “low pricing”, that were in fact day-ahead prices and nothing to cheer about. The second post dug deeper in the statement that Belgium benefited from the import from Germany’s surplus electricity from solar and wind. Yet, when Germany had high production of electricity from solar and wind that day, Belgium had a high production too and it was primarily exporting its own surplus, so there was no import from Germany to benefit from at that moment…

The subject of this post will be the inflexible power source that, according to the Minister, was the root cause of this curtailment. The first tweet didn’t name the culprit, it was in the fourth tweet that she used the n-word (nuclear):

There you have it, today a practical example that shows how our energy system must change and that nuclear energy stands in the way. They simply undercut sustainable CO2-free production. 4/5

There were several charts added to the first tweet to support her claims, however there was no chart illustrating the claim that “nuclear is in the way” (although it would have been pretty simple to do, just show a quasi straight line for nuclear while having a nose dive for wind). If she would have looked at what nuclear did on July 29, this is what she would have seen:

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Belgium benefits “extra” from surplus German solar and wind

Central in the tweet of our Minister of Energy (see previous post) is the role of Germany in the event of July 29, when Belgian offshore windmills were shut down: (translated from Dutch, my emphasis)

Due to a lot of German wind & sun + imports, Belgium has the lowest prices.
Due to negative prices, a shortage of flexibility and storage, offshore wind is currently being shut down.
100% renewable via flex & storage. Look to the future, instead of recipes from the past. 1/5

Followed by (translated from Dutch, my emphasis):

Production in Germany: 24 GW wind and 16 GW solar. Belgium benefits extra thanks to its import capacity, flow-based (flow factor competition) and the minram70%. 2/5

As I understand it, (forecast of) surplus electricity by solar and wind from Germany kept Belgian (day-ahead) prices low and Belgium benefited extra from this surplus electricity on July 29 because of its import capacity. Yet, in that same story Belgium shuts down (some of) its offshore windmills.

Do I understand it correctly that Belgium benefited from German import using German solar and wind surplus … just to shut down its own windmills? That doesn’t make much sense. Or is that imported electricity so insanely cheap that it would be more advantageous for Belgium to shut down some of its windmills?

The Minister of Energy provides this chart to support her claim:

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Belgium has the “lowest prices”

When does the good news ever stops? At the end of last month, our green Minister of Energy sent out this cheering tweet (translated from Dutch, my emphasis):

Due to a lot of German wind & sun + imports, Belgium has the lowest prices.
Due to negative prices, a shortage of flexibility and storage, offshore wind is currently being shut down.
100% renewable via flex & storage. Look to the future, instead of recipes from the past. 1/5

This is the screenshot:

Tweet TinneVdS 20210729: 1 of 5

It is a thread of in total 5 tweets and the first two detail an issue occurring on July 29 when (some) offshore windmills were shut down. There are several things in this thread to look closer into, but I will solely focus in this post on the “lowest price” claim in the first sentence of the first tweet.

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And the second position goes to … Uruguay

The first place on the list of the 15 countries with the largest share of solar and wind is occupied by Denmark, which is not really a surprise to me. What is a surprise is the second position, occupied by Uruguay with 44% of its electricity generated by solar and wind. When it comes to solar and wind, I heard a lot about for example Denmark, Germany and (South) Australia, but not yet about Uruguay.

That got me somewhat curious, wondering what the story of Uruguay is in order to cope with such a large share of intermittent power sources. I already wrote about the strategies of for example Denmark (having two big neighbors with a lot of dispatchable hydropower to balance out the intermittency on the Danish grid) and Germany (exporting its surplus to the neighboring countries at low to negative prices). Now what is the strategy of Uruguay?

First things first. I know Uruguay is a country somewhere in South America, but that is about it. I wouldn’t be able to point it out on a map, so let’s start there. Uruguay is a relatively small country on the East coast of South America. I colored it in red on this map and also named its two (big) neighbors: Brazil to the North-East and Argentina to the South-West.

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Solar and wind growth failing to outpace demand growth (except during an economic crisis)

The good news keeps on coming: Belgium is worldwide in the top 15 of “Wind and Solar countries”. More specifically, we are at 9th place having a share of 20% of our electricity production from solar and wind in 2020:

It didn’t end there. China, the EU-27 and the United States are responsible for more than two-thirds of global generation, Vietnam went from 0 to 14 TWh in just 3 years, Chile and South Korea have quadrupled their wind and solar generation since 2015, and many other countries (Brazil, China, India, Mexico, Turkey and Uruguay) have tripled it. Also, many countries now get around a tenth of their electricity, which is the global average for electricity generation from solar and wind.

Of course, the transition to solar and wind is going to be cheap. According the article, the cost for solar and wind are at a tipping point with almost two-thirds of wind and solar projects built globally last year will be able to generate electricity cheaper than even the world’s cheapest new coal plants.

That all sounds pretty impressive, but as usual in alternative energy reporting, this is just half of the story. Luckily, the author also showed the readers a glimpse of the challenges ahead, putting these glorious numbers somewhat in perspective.

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