So, what should we do? Some suggestions for adaptation to a changing world

Since I am not in charge, and no-one who is in charge is seeking my opinion, I actually don't need an answer to this question  :-)  

It might be interesting to think this through though. Its too easy to criticise without having something to suggest.

The problems we currently face are fundamentally driven by resource limits

Most people would agree that growth can't continue forever on a finite planet, at least in an abstract way. The Limits to Growth study in 1972 [1] was the first to look at what might happen in concrete terms, and it painted quite a shocking picture of the future. The study brought together everything we knew at the time about resource limits, environmental and social systems, population and the economy and studied the whole thing all at once as a self-consistent system of interacting parts. The conclusion at that time was that we had somewhere between 50 and 100 years before growth didn't continue on this finite planet.

There hasn't been any work in the intervening time that invalidates those basic conclusions, indeed the work that has been done is supportive of the original work. In case you've read otherwise, no, The Limits to Growth never claimed that we would "run out" of resources by the year 2000. The base case or "best guess" scenario in the original publication was that industrial output would be constrained by resource limits by about 2015, with uncertainty plus or minus a decade or two.

The most critical of those limits is the resource we rely upon, exclusively, to power our transport: crude oil. Transport isn't a luxury. It's the circulatory system that keeps our society alive, moving goods from where they're produced to where they're needed, and waste from where it's produced to somewhere (hopefully) out of harm's way. More generally, transport includes mechanized agriculture - producing those most basic and indispensable goods that keep us all alive. 

To a very good approximation, all of our transport system relies on this single resource, as a power source. The only real exception to this is electrified rail (which in Australia is a fraction of commuter journeys, and an irrelevance for freight). Electric cars make up a tiny fraction of private vehicles, many of which are anyway non-essential for broader social function.  There are no electric trucks deployed, beyond a few demonstration projects.

Given our existing transport infrastructure and systems, it is a fact that we are, and will remain, critically dependent on crude oil for at least the next decade or two. It takes that long to make a meaningful adjustment to infrastructure, even with a plan and concerted effort to do so [2]. Neither plan, nor concerted effort, are apparent to me just yet though.

We have grown up against these growth limits to the point where they are now constraining industrial output. We have left it much later to act than we might have done, and will now we have to decide what to do about it.

The structural demographic wheel turns

What may happen next has plenty of historical precedent, after all we aren't the first complex human society that's grown up against its resource limits.  Structural demographic theory as championed by Peter Turchin [3] describes the effect of decreasing resource availability per person. Competition creates what he calls popular immiseration - decreasing real wages and a falling standard of living for the "commoners". Commoners have been given lots of labels (working class, proletariat, "the 99%"). A useful definition is, that part of society that earns a living predominantly from their labour. The elite class, on the other hand (captalists, bourgeoisie, "the 1%"), earn a living predominanly from their investments.

The result of this popular immiseration is an increasing standard of living for the elite class as their costs (the wages of the commoners) fall in relative terms. Economic inequality rises, as does the population of elites. The rich get richer, and the poor get poorer.

Eventually the elites also suffer declining resources (elite opportunities), which increases inter-elite competition. Conflict results. Popular immiseration and economic decline weakens the tax base and hence the state monopoly on violence. Civil war between different elite factions can be the result [3].

Environmental changes add to the pressure

Neither of these matters minimise the effects of climatic and other changes to the environment. We are starting to notice the effects of these (fires, droughts, floods, coastal erosion) now, but they are not having a material effect on most of us just yet. Given the slow response of earth systems relative to human timescales, however, the changes that have begun are unlikely to stop or even slow down any time soon. To take one example, the circulation time of the ocean is of the order of 1000 years. That gives you an idea of how long it will take for the ocean to finish warming in response to a warmer atmosphere, or alternatively, how long we can expect sea levels to keep rising, even if we were to somehow manage to stop increasing the carbon concentration in the atmosphere by next Tuesday afternoon.

As climate systems move, we are going to have to move things too.

Farming systems will have to move in response to changing climate. As regions become wetter or drier, warmer or cooler, the agricultural systems best suited to that environment will change. As a society we will need to be prepared with systems in place to help agricultural communities either adapt or move, and be prepared to build supporting infrastructure as required. 

Infrastructure will have to move too. Sea level rise will continue, and is only going to speed up from here. The next 100 years is "baked in" already, more or less independently of what we do or don't achieve with emissions reduction. Losing beachfront homes is just the beginning. Have you ever wondered what fraction of the world's sea ports are at sea level? (answer: all of them) What's involved in moving sea port infrastructure as it starts to flood? (and associated infrastructure, like the road and rail networks that service them?) 

How would Australia then export its wheat to a hungry world? How would the rest of the world import it? How would we import diesel fuel? Most of our transport fuel is dependent on the continued operation of international supply chains, including shipping. We have a small and shrinking domestic refining capacity, and can produce a minor fraction of our transport energy needs through domestic crude oil production (which declines year by year). We produced 334,000 barrels of oil per day in 2021, and consumed over a million.

When complexity is the problem, more complexity is not a solution

Joseph Tainter is widely credited with the idea that complex societies collapse when the marginal return on increased complexity becomes negative [4].

You can think of society as a machine that solves problems through complexity. In response to pressures like environmental stresses, society will develop ways to do more with less, hopefully ensuring that everyone's needs will continue to be met. We develop more efficient ways of extracting and distributing progressively more marginal resources. The cost of this is added complexity. Improved extraction methods for more marginal ores are technologically and energetically more challenging, rules governing resource distribution (the laws governing economies, taxation and social welfare) become more complex and nuanced. Tainter gives lots of examples in his book, backed by real world data. Things get more complex over time, as societies grow.

The increased complexity has a cost. Energy inputs are higher to extract more marginal ores. Direct energy costs but also indirect ones like the higher education and training system required to train workers skilled in the advanced technologies. More tax dollars are spent to operate increasingly complex systems of distribution. Just managing the information flows in the more complex system requires more workers pushing pens (or keys) instead of directly providing goods or services to others.

The whole enterprise starts to come apart when the cost of becoming marginally more complex, exceeds the benefit of becoming marginally more complex. You might wonder why a society would ever do this when there is negative net benefit, but it's easy to see when the accounting is fragmented rather than holistic. A company, sector of society, government department, can think that things are improving when they account for costs imcompletely - externalising costs on to third parties is one way this can happen. The introduction of the GST in Australia is probably a good example - when you look at it from the government's point of view it looks like a simplification, but when you count the net cost over every business that now also has to become a tax collector, probably not. Solar power is arguably an even better example. How many times have you heard it said that solar power is cheaper than coal? It's true, but only when you consider the cost of setting up the solar power plant and the income that you earn from it. What doesn't get counted is the additional costs this imposes on the rest of the electricity generation system as it tries to offset the glut of power that's generated in the middle of the day, and the corresponding deficit at night. Nor are the costs of climate change accounted for. If you really want to compare the cost of solar power and coal power you have to compare the system costs of both: the cost of constructing and operating the plant, the negative externalities of greenhouse gas emissions and other pollutants; and the cost of storing sufficient electricity so that it can be delivered on demand. 

Collapse - which is the process by which societies "go backwards" on many measures - occurs because the costs increase faster than the benefits, and pretty soon the average welfare of individuals starts getting worse. This starts at the bottom of the social pyramid, but it works its way up to the top.

If you know you're going to fall, go early and do it with some control

The likely conclusion of the above is that a lower standard of living is unavoidable, and that serious social conflict is likely unless we are prepared to share the pain around in a way that looks after everyone. People will be willing to do this if they understand the need and if everyone is taking their share.

Here are some suggestions for a managed retreat from complexity and a reversal of increasing wealth inequality.

1. Radically overhaul the tax system to encourage the behaviour that's required. Eliminate income tax, raise all revenue through a progressive consumption tax (a GST or VAT) whose rate can vary for different classes of goods, and is higher for luxury goods. Pay everyone the same basic allowance, raised through tax (universal basic income). This discourages consumption and incentivises people to find ways to consume less. It preferentially taxes those who consume more - the "rich". On the flip side, get rid of most (all?) social security payments, and their associated systems and bureaucracy. Greatly simplifies the tax system, removing unproductive "complexity management" jobs. Use a system like Tradable Energy Quotas to ration consumption of scarce goods when needed. The rich can still earn a living through investment, but not through investment in unproductive asset bubbles (see number 9).
2. Decline-aware spending on transport infrastructure. Stop building new infrastructure close to sea level, and stop defending existing infrastructure at sea level (I'm looking at you, Collaroy). Stop building new roads. Forget high speed rail - too expensive and complex - build normal speed, dual track, electrified rail linking cities and major food growing areas. Plan for staged retreat of port infrastructure. Invest in LNG conversion or natural gas to synthetic diesel for long haul goods transport (both rail and road) in the short term, electric goods rail and electric short-haul trucks in the medium term.
3. Decline-aware spending on energy infrastructure. Public education about energy - this is so poorly understood by the public, the media, and most politicians. Coordinated research program to develop an integrated plan for increased intermittency in supply and reduction in demand. Electrified goods transport by rail that stops during periods of low supply (e.g. evening peaks), or relies on diesel / LNG backup or hybrid operation. Investment program in grid energy storage - off river hydro / gravitational energy storage / underwater compressed air energy storage (and batteries for short duration). New technology  is possibly helpful but we can't afford to wait. We need to go ahead now with technology that is already mature enough.
4. Decline-aware spending on manufacturing infrastructure. Decline is likely to lead to increased conflict within and between nations, and indeed at the time of writing we are already seeing this. On-shore enough domestic manufacturing capability to be able to maintain our own critical infrastructure.
5. Rationalise spending on health. Cost benefit analysis on healthcare provision and public health programs. Tax bads, not goods: levies on processed food based on sugar content. Science-based public education programs on nutrition (including vitamin D) and exercise. Progressively de-fund high cost / low benefit medical treatments as the resource base shrinks. On-shore manufacturing capacity for basic medical supplies including the most important medicines. Make sure we fund the basics properly.
6. Rationalise spending on education. (my colleagues will kill me for saying this but) we probably have more universities than we need. Reduce the university count and fund the remainder properly. Fully publicly fund (a substantially reduced number of) undergraduate places. Fund secondary education properly, including making teaching an attractive career choice. Make sure we fund the basics properly.
7. Defense and security. I don't know much about this, but it seems unwise to continue to rely on powerful friends. I suggested in a previous post that we adopt a porcupine strategy to make ourselves an unattractive target for larger powers. As a medium sized nation, soft power is very important. We should be the charming porcupine with lots of friends.
8. Help people who need help. People in Lismore got flooded recently. This is tremendously destructive for the communities involved and for all of us in one way or another. We need to spend the money to move people out of harm's way. Not just floods, but fires and coastal erosion. Not to reward people for arguably making bad choices, but neither should we be hanging people out to dry. It doesn't help them and the resulting dysfunction and conflict doesn't help the rest of us either.
9. Deflate speculative asset bubbles, especially housing. It's a waste of productive capital, we need to be investing in things that contribute social value, like all of the above. Steve Keen has the only sane proposal I've seen on how we might do this equitably for housing. He has some other great ideas like giving shares a limited lifetime of 25 years when traded on the secondary market (they live forever when issued initially as part of business raising capital). The rich can still live off their investments, but their investments will need to be doing something useful for society.

This can all be done, it needs to buy us some time to figure out what to do next. It needs to be fair, with a preference toward helping those at the bottom. And it needs to be planned, because these different parts interact. We need to work on this problem all together, not one piece at a time.

References used

1. Meadows, D.H, Meadows, D.L., Randers, J. and Behrens, W.W. "The Limits to Gowth", Universe Books, 1972
2. Hirsch, Robert L.; Bezdek, Roger; Wendling, Robert, "Peaking Of World Oil Production: Impacts, Mitigation, & Risk Management" (PDF). Science Applications International Corporation, U.S. Department of Energy, National Energy Technology Laboratory, 2005
3. Turchin, P., and Nefedov, S., "Secular Cycles", Princeton University Press, 2009
4. Tainter, J., "The Collapse of Complex Societies", Cambridge University Press, 1988

Electricity supply part 4 - Costs

In Part 1 of this series, we saw how electricity demand changes on an hourly basis, and that if we want to power the electricity grid using renewable energy sources, we are going to need energy storage.

Part 2 showed a way of estimating how much storage we would need, if we just  nicely meet our average energy demand using renewables without wasting any. (It was a lot).

In Part 3 we started working with the idea that if we're prepared to build more renewable energy generation than is strictly necessary, we could get by with a less storage - a lot less.

Let's have a go at costing this up.

Assumptions

In 2021, the electricity price paid by consumers is about 2/3 network, environmental and retailing costs; and about 1/3 generation costs [1].  What we spend through our electricity bill has to cover not only the construction costs for solar and wind farms, the cost of coal and gas; but also all of the office costs,  advertising, insurance,  network maintenance and management. And a gazillion other things you've probably never thought of.

I'm going to assume that the non-generation components of residential electricity price remain constant at about 20c / kWh ($200 / MWh). This is unlikely, because wiring a whole lot more renewable generation and storage into the grid will almost certainly require network  upgrades. So this assumption will result in an underestimate of the costs. I'm also assuming that this residential value applies to every user over the network.

I'm going to assume that the currently installed generation capacity in NSW is, on average, neither insanely profitable, nor loss making. Electricity generation companies don't pay fantastic dividends. They make a small profit. It's a competitive industry. 

If assumption this is true, the income earned by the different generation types in NSW is what's required to make those generators acceptably profitable. 

Making this assumption, in 2021 in NSW, black coal earned $80 per MWh produced, gas earned $185, wind earned $64 and solar $45 per MWh produced. Note that at any given  moment in the grid, all generators earn the same price for the electricity they're producing. The reason why the average price earned is different between the different fuel types is because price varies during the day, and the generators produce at different times of the day. Solar generates power in the middle of the day when the price is low (when the electricity is least useful). Gas generators operate during the evening peak when the price is high. So the price is not only a measure of the cost of generating the electricity, it's also a measure of the economic value of the electricity which is produced by that technology.

The lifetime cost of renewable energy projects don't depend on how much electricity they produce. ie, the "wear and tear" factor isn't significant. I'm assuming that a wind farm that sits idle for its 25 year service life costs about the same to build and maintain, compared to one that generates power whenever the wind blows. That allows me to use the 2021 generation costs to estimate future costs with different levels of excess generation. Suppose that the capacity factor for wind in  2021 was about 20%, and that had resulted in the reasonably profitable generation cost of $64 per MWh. If we build so much wind power that it has an average capacity factor of 10%, it would need an average selling price of $128 per MWh produced to stay profitable. At 5%, it would be $256, and so on. The more we over build renewable generation infrastructure, the more expensive the renewable electricity becomes.

Storage needs are fulfilled by lithium batteries. I know this is not realistic, but "batteries!" is one of the stock responses you get whenever the variability of renewable energy is mentioned so I thought it would be interesting as a case study. Also, batteries are the most popular storage technology that is going into the grid right now and cost data is becoming more reliable.

Mongird et al. (2019) [2] put the cost of lithium battery grid energy storage at US$469/kWh, falling by 25% by 2025. We'll just use their 2025 estimates, converted to Australian dollars at 1.0AUD = 0.70USD. This gives us AUD$517 per kWh of installed capacity including power conversion system, buildings and engineering, with a battery life of 10 years [2., table ES.1].

Costing up some systems

In previous posts in this series, we just scaled "renewables", keeping the same ratio of solar to wind that's currently installed in NSW, in order to work out how much storage is needed to just barely prevent a blackout.

In 2021, utility scale solar was about 40% of (solar plus wind) generation, so let's call the cost of generation 0.4 x $45 /MWh + 0.6 x $64 /MWh = $56.4 /MWh. We'll assume that this is constant up until the point we start spilling renewable generation, because having storage allows us to soak up generation whenever the resource is available, more or less giving us the same cost structure as now. We can scale up  the price by the spill fraction we calculated in previous posts. For example, if we spill 50% of potential renewable generation, the price per MWh will have to be twice as high because the remaining 50% of actual generation has to cover all of the costs and generate that same acceptable profit.

The quoted cost of battery storage needs to be expended every 10 years because of the limited lifetime of lithium cells. Dividing the total storage cost by the total electricity generated over 10 years gives us a storage cost spread over each MWh used in the state. Both figures presented in Figure 1 below.

Figure 1 - estimated costs for storage and generation, corresponding to the Figure 4 of Part 3.

A couple of things to notice here. I've had to use a log axis to be able to sensibly show both costs on the same graph. The optimum point is not, as I had supposed, somewhere around the 30-40% spill point. It's far to the right of that because even at 60% spill (corresponding to more than twice the generation capacity that we nominally need), the storage costs per MWh used are still nearly 10 times as high as the generation costs.

What does this mean?

Taking the best case scenario I've got so far, at the right hand side of Figure 1, this means:

• Building 20 times the solar and wind generation that we currently have installed in NSW. The wasted generation opportunity (because of the times when the energy has nowhere to go) means that the renewables cost $160 per MWh (similar to current gas fired power costs, more expensive than coal)
• Building and replacing every 10 years, about 162,000 MWh of batteries at an ongoing cost of about $8.5 billion per year (just in NSW). For context that's about 1.5% of NSW GDP, ballpark the same as we spend on the military. Just for batteries.
• Retail energy costs ($160 /MWh generation, $1363 storage, $200 network + other) = $1723 /MWh or about 172 c /kW. Expect your electricity bill to rise by a factor of at least six

Bear in mind the limitations I outlined with the assumptions made, plus we're ignoring anything like limits on resources or manufacturing (or international supply chains or inflation, for that matter). You can see it's not as simple as just installing batteries. Using some gas for peaking power generation on a few occasions through the year would greatly reduce the costs involved.

For a future post, perhaps.

References cited

1. AEMC, Residential Electricity Price Trends 2021, Final report, 25 November 2021

2. Mongird, K., Viswanathan, V., Balducci, P., Alam, J., Fotedar, V., and Hadjerioua, B., Energy Storage Technology and Cost Characterization Report, PNNL28866, US Department of Energy, July 2019

An integrated energy and security plan for Australia

Where to start? The lack of systems thinking from from our leaders is mind-boggling. 

Ok, let's start with the submarines.  Nuclear submarines, I mean - really?

The whole point of nuclear submarines is that they carry nuclear weapons, can travel anywhere in the world without refuelling, and can stay submerged for months at a time. So your enemy never  knows where they are, and hence isn't willing to risk a direct confrontation. Our brand new AUKUS (awkwas?) nuclear subs won't have a nuclear weapon deterrent, and as a medium sized regional power I don't see the strategic usefulness of the long range capability. Also, nuclear subs are not particularly stealthy - pumps need to run at all times to keep the reactor core cool, and they leave a waste heat signature in their wake. Then there's the fact that we don't have a nuclear industry - we have neither the expertise nor the systems in place to be able to operate, maintain or refuel these things. 

A much better option would be to develop smaller and more numerous home-grown subs to take out enemy shipping and submarines. Powered by hydrogen fuel cells. Those things have no moving parts and are completely silent. Hydrogen and oxygen would be carried onboard, possibly as liquids, allowing extended operation underwater. A very effective deterrent in our region.

As a medium sized regional power, we are not the lion on the Serengeti. Our strategy should be that of the porcupine - not trying to throw our weight around, but make ourselves a really unattractive prospect  for larger powers. 

The core of a hydrogen industry

This constitutes a way to jump start large scale hydrogen production in Australia.

The need to decarbonise the energy sector is urgent, but global warming is by no means the whole story. At least as serious, and certainly more urgent, is fossil fuel depletion. Especially crude oil which when refined fuels effectively all of our transport and military (including our current submarines).

We are horribly exposed on this. Australia  imports about 2/3 of its transport fuel and now has only two domestic refineries remaining. Our "strategic" petroleum reserve is only 21 days worth of consumption, far less than the minimum of 90 days recommended by the International Energy Agency. Not only that, but a large part of our reserve is held on our behalf in the US where it won't be of much use in the event of something like a disruption to shipping. It's no exaggeration to say that if anything were to happen to international trade in crude oil, Australia would be in serious trouble (martial law, rationing) within a few weeks.

Not that a hydrogen industry is going to fix this, it's needed for other reasons:

• to power the submarine fleet
• liquefied (or possibly stored as ammonia) as a large scale energy storage for the grid. See for example this post on the need for storage in the grid. 
• as an export (liquid or as ammonia)

Electrolysis of water and storage of the hydrogen and oxygen as liquids is a good way to soak up the vast quantities of excess renewable energy that we'll have during summer months. And a good way of keeping submarine fuel on hand.

What about transport then?

This is an urgent problem, and should be a pressing national security concern. The critical thing in the short term is to be able to continue to power the transport fleet to ship goods (especially food) around the country.

Short term - start building up the rail network. Dual rail lines all the way between the capital cities and regional centres. Not high speed rail, just normal speed, with dual lines (and maybe even passing bays!) would be nice. Build infrastructure to ship liquefied natural gas from the west to the east. Convert diesel locos to run on LNG, and some of the long distance trucking fleet to run on either LNG or CNG (compressed natural gas). There's no down side to this - it'll be cheaper than diesel, cleaner both in greenhouse emissions and in sulfur, and reduces risk from international supply chains.

Medium term - electrify the whole rail network and start converting locomotives to run as hybrids with liquid hydrogen (or ammonia). It might make sense to build synthetic fuel plants to convert gas to methanol and then dimethyl ether as a diesel substitute for smaller trucks and cars, or to synthetic gasoline for cars (most importantly for emergency service vehicles).

Longer term - battery electric trucking for short distances to and from the rail head to warehouses and retailing.

A few words about nuclear power

In my view this is unwise, for the following reasons:

• We don't have a nuclear industry and we would have to build one almost from scratch, including developing expertise and setting up the training capabilities in universities. The same is true for hydrogen liquefaction and storage, although it's less technically challenging and we already have some of the skills needed. Investing in developing a nuclear industry represents a big opportunity cost to develop a more durable alternative though.
• We have other choices. Australia has shedloads of every energy source except crude oil. We might be much better placed exporting our uranium to other countries that have already made the decision to go down the nuclear path. As a source of export income and also a source of soft political power.
• Despite the required investment, it's not really a long term prospect. There's actually not that much uranium available globally. If everyone in the world were to try to generate their electricity using current nuclear technology, the global supply of U235 would last about 10 years. Yes, breeder reactors and yes, molten salt thorium reactors, but the former hasn't yet been made commercially viable and the latter is not much more than a research prospect. Decades away, at best. We can't wait that long, for something that might not work out.
• Spent nuclear fuel disposal. We (humans) have been generating power from uranium for 70 years, and we still haven't implemented permanent storage for the spent nuclear fuel.  The Onkalo repository is the  first in the world. They applied for a license to start storing waste from 2024. All of the spent nuclear fuel ever produced is sitting around on the surface and requires active systems (laws, management regimes, fences, surveillance, men with guns) to keep it secure. Now ask yourself this: what happens to all of that spent fuel that isn't safely disposed of, when those active management systems go away? It doesn't even have to be as dramatic as social collapse: war would be enough. 
• Inability to adequately model risk. Chernobyl was caused by a combination of bad design and human stupidity. Fukushima was a combination of poor design choices and failure to anticipate an earthquake and tsunami of that magnitude. The point is, that neither of those scenarios were part of the risk analysis that was done in setting those plants up. Far from being one-in-a-million events, we have a lived history of two catastrophic failures in seventy years of nuclear power. We really don't have a good way of modelling these very low probability but very high consequence events. The clean-up at Chernobyl and Fukushima is ongoing, with no end in sight and at  probably unknowable cost. 

Not impossible, but doesn't seem like the best option to me. Solar and wind are much more known and knowable quantities, and have the potential to be truly long term solutions. The difficulty there is the need for large amounts of storage to offset their inherent variability. 

Unfortunately, we are now out of good options.

Electricity supply part 3 - balancing storage capacity with generation capacity

This is part 3 of a short series of posts thinking about energy storage needs for a renewable electricity grid in NSW Australia.

In part 1, we saw that electricity demand and renewable electricity generation both fluctuate over time. To generate enough renewable power on average for the first week of April 2022, we need about 4.7 times the currently installed renewable generation. There's a big problem though, because the electricity grid must be balanced at all times, not just on average. At 5:30am on 5th April 2022 the sun hadn't yet risen and there was almost no wind blowing in the state. We would have needed more than 120 times the currently installed wind farms to avoid a blackout!

Clearly, there is a need for energy storage to avoid over-building renewable generation equipment to the point where most of it is doing nothing, most of the time. We had a look at this in part 2, where we worked out the minimum amount of storage required for that first week in April - assuming that we had just exactly enough renewables to meet the average demand. We needed a minimium 96,000 MWh, or about 14 hours at average state power consumption. 

There's still an obvious problem here though - we don't necessarily need so much storage if we're happy to waste  (not generate) some of the renewable electricity. So far we've only considered two extreme cases - no storage and massive over generation (in part 1) and maximal storage with no over generation (in part 2). Both of these extremes will be very expensive. Likely a cheaper solution will be to have some level of over generation - which would require less storage to avoid a blackout. The right balance would be the combination with the lowest overall cost.

Working out storage needs with some over-generation

We're going to need a slightly different approach than what we used previously. As in part 2, we'll start the storage number at zero, at the start of the week. When we withdraw energy from storage it goes down, and when we store electricity it goes up. However, when the storage reaches the full state, any additional generation has nowhere to go and gets wasted ("spilled" - which in  practice means not generated in the first place, although it could have been if there was somewhere for it to go).

Then, we once again adjust the generation high enough such that the energy storage ends the week at about the same place it started - "zero". We end up with a pair of numbers - a required energy storage value in MWh, and an energy generation value - some of which is used and some of which is spilled. 

Let's further suppose that "zero" on the energy storage graph corresponds to half full (this isn't quite right but probably minimises the error in guessing how much energy we might have remaining on any given midnight in April).

Figure 1 below shows what happens with the storage level. Storage fills from sunrise on day 1, reaching the maximum level shown as 30,000 MWh on the chart. The storage minimum of -45,912 MWh occurs in that early morning of the 5th of April.

Figure 1 - Electricity storage level for NSW in the first week of April 2021, with 7 times currently installed renewable power generation (solar and wind). Renewable generation is curtailed when the storage is full, which happens in the middle of each day. Total storage required to avoid a blackout is the  maximum storage level minus the minimum (30,000MWh - -45,912MWh = 75,912MWh)

This has resulted in 31% of renewable generation being curtailed, mainly solar power in the middle of the day that has nowhere to go because the storage is full and generation exceeds demand. 

As we generate more renewable energy, we expect a smaller required storage. Although we see that here, the effect is not very strong because of that night of 4th - 5th of April when there was not much wind generation. The size of the storage, just looking at this week, is that required to get the state through that particular night.

Widen the lens to a whole year of data

One week looks nice on a graph. Although we've captured an interesting event on the 5th of April, we don't know much about those other types of variability. Let's consider how this looks for the whole year of 2021, applying exactly the same ideas but probably without the graphs now because they'll look like cat fur.

I've had trouble locating the data for rooftop PV, so I'll leave that out for now (that actually helps a bit because it  means we have  proportionally less solar and more wind, which helps us get through the nights). I'll repeat the analysis at the end if I can  find the data again.

Figure 2, below, shows how this looks for the whole of 2021, now showing "End of Month" on the abscissa, instead of "End of Day". I've scaled up the generation up enough to just meet demand over the year (7.05 times the currently installed wind and utility solar plant). There's no energy spill, but we need at least 4.88 million MWh of energy storage (equivalent to meeting the state's entire energy demand for a 29 days running with no generation). We'll get to costing that out in a future post.

Figure 2 - 100% renewable power, no excess generation over the year (no spill) - requiring 4.88 million MWh of energy storage. That's 4,880 GWh, or 29 days of storage at state average power consumption.

You can see the problem here. Most of the draw down happens in winter from the end of April to the end of July. Most of the storage capacity is only used once per year, for that big winter dip. Figure 3 shows how the situation looks if we go to 20 times currently installed solar and wind. Now we waste 65% of the renewable energy we could potentially generate, but we only need 162,000 MWh of storage (equating to about 1 day of energy storage, instead of about a month).

Figure 3 - 20x current renewable generation. Only 162,000 MWh of storage are needed, and the storage is charged and discharged more frequently (that's good). However, we waste about 65% of the renewable energy that we could potentially have generated because there isn't anywhere to use it.

Figure 4 shows how the required storage varies as a function of overgeneration. The left hand side corresponds to just barely enough generation (no wastage) but large amounts of storage required, with just over 7 times currently installed renewable generation. The right hand side corresponds to 20 times currently installed renewables, 65% of which is wasted (curtailed, or spilled), but much less storage is needed.

Figure 4 - Storage requirement vs overgeneration (presented as % of generation which is wasted). High levels of overgeneration are wasteful in terms of renewable generation infrastructure, but efficient in terms of storage infrastructure, and vice-versa.

A trade-off is required

Hopefully this makes it clear that a trade-off is required. Efficient use of renewable generation infrastructure requires excessive and inefficient storage. Minimising the amount of required storage requires over-building of renewable infrastructure and wasting of the potential to generate energy, particularly during the summer.

The best trade-off is the one that minimises overall system cost - probably at between 20 and 40% energy wastage,  going from the shape of the curve in Figure 4, but we'll try to put some dollar figures on that next time.

Electricity supply part 2 - how much storage for 100% renewables?

 Let's "spill" that excess renewable generation into storage

This is part 2 of a short series of posts thinking about energy storage needs for a renewable electricity grid. We'll develop the ideas first, then explore what happens when we change various things, making the results more realistic at the end.

In Part 1, we saw that, for the first week of April 2022 in NSW Australia, once we expand renewable generation much more than about 5 times current generation, there are times we would be generating more electricity than is required by the state. In order to not cause a grid failure, we have to switch off some renewable generation at those times.

There was another time, just before dawn with no solar yet available, when there was very little wind  power being generated across the entire state.

It seems clear that we need to store that energy when it's available in excess, in order to use at times when the sun isn't shining and the wind isn't blowing. 

I'm going to redraw the graphs we had previously, to show what's going on more clearly as we start thinking about storage. Figure 1 shows just two data series, not stacked. The orange is the demand level, and the green is the total renewable generation. This is the same data as shown in Figure 1 of part 1, except we are just showing the renewables total, not the breakdown by type.

Figure 1 - total electricity demand and total renewable (total of solar and wind) generation in NSW Australia for the first week of April, 2022. The difference between the two curves is currently met by fossil fuel generation, but would need to be withdrawn from energy storage in a fully renewable scenario.

Suppose for simplicity that we just keep the current proportions of solar and wind the same, but multiply the renewable output by 4. We can see in Figure 2 below that supply exceeds demand in the middle of the day, and falls below at night. Whenever the green generation curve is higher than the orange demand one we are charging our energy storage system (instead of spilling the electricity), and when the green curve is below the orange curve, we need to discharge from storage to keep the  lights on.

Figure 2 - First week of April, imagining that we've scaled up renewable generation by a factor of four. When the green generation curve is above the orange demand curve we send excess energy to storage, when it is below the renewable generation is not enough to satisfy demand and needs to be withdrawn from storage.

How much storage is needed?

First, lets work out the power flows needed to and from storage, by subtracting the demand curve from the supply curve. If this is positive, it's a measure of the excess power from renewable generation. If it's negative, power is being withdrawn from storage to support the grid. I've shown this in Figure 3, with the area shaded to make it obvious when it's above or below zero.

Figure 3 - storage power required to balance renewables at 4 times the current generation rate in NSW, for the first week of April, 2022

Remember that energy is power multiplied by time is energy. So although the height on the graph represents power (in MW), the shaded area represents energy in MWh. It looks to me like the total energy withdrawn from the storage (area of the blue shading below the zero mark) might be a bit larger than the energy stored (area of blue shading above zero), but we can't be sure just eyeballing the graph.

What we need to do is add all those areas together - to integrate that storage curve to show how much energy we've accumulated since the beginning of the week. Setting the beginning of the week at zero arbitrarily, we can see the energy storage deficit in MWh below in Figure 4. You can see that the energy stored keeps dropping because renewable generation is not keeping up with demand. 

Figure 4 - Cumulative energy storage in NSW for the first week of April 2022, with four-fold increase of renewable energy supposed. Four-fold is clearly not enough to keep up with demand over this week, as the storage level continues to deplete through the week. Compare to Figure 3 - during the day when renewable generation exceeds  energy demand, the storage level increases, during the night it decreases.

This is easily fixed by building more renewables, If we assume a five-fold increase in renewable generation instead of four-fold then the energy stored accumulates over time. If we go with a 4.7 fold increase in renewable generation then we get the result shown in Figure 5, where we end the week with about the same level of stored energy as we started with ("zero"). This means that we have just enough generation such that the average generation over the week matches the average demand over the week, with sufficient storage allowing us to soak up the variability in both.

Figure 5 - Cumulative energy storage in NSW for the first week of April 2022, with 4.7-fold increase of renewable energy supposed. The storage ends the week at the same storage level at the beginning, indicating that, averaged over the week, 100% of demand was met by renewables. The difference between the highest and lowest stored energy states tells us the absolute minimum size for the energy storage - 96,000 MWh, equivalent to about 14 hours of power stored, at state average power consumption.

Where are we at?

So we're getting a picture of what's needed for a fully renewable grid:

• About 4.7 times the renewable generation infrastructure that we currently have installed, so that we generate enough power over the week (Figure 5)
• At least 96,000 MWh of energy storage - able to power the whole state, by itself, for 14 hours (difference between  highest and lowest values on Figure 5)
• Energy storage able to handle discharge rates of 9,000 MW (highest point on Figure 3)

But there are a few problems with what we've done here:

• This analysis is only for the first week of April 2022. I don't expect that week to be special or unusual in any way, but special and unusual times do occur regularly and the grid needs to be able to deal with them. It also needs to deal with seasonal variations that don't show up in a single week.
• We've just scaled the renewable generation all together, we  might be able to do much better if we build proportionally more wind and less solar, for example
• We've assumed that the storage should be able to absorb all of the renewable energy we throw at it, and that the renewable generation should be enough to meet 100% of demand. This might be an expensive solution. It might be cheaper, for example, to over-build the generation by 20% (which means we waste 20% of what's generated) so that we can make do with a smaller amount of storage.

Next time, we'll develop the analysis to answer these questions and get some more nuanced results.

Electricity supply, part 1 - the need for storage

Keeping the lights on isn't easy

Electricity can't really be stored, as such.

It can also be quite dangerous, and so our electricity delivery systems have been designed with a lot of safety features to prevent electrocution, fires and equipment damage. These things do happen from time to time of course, but mostly, the safety features activate to shut down the affected circuits before any damage is done. This is critical to recovery, as preventing equipment damage means that faults can be corrected and service restored in  minutes or hours rather than the days, weeks or months it would take to replace damaged equipment.

To keep the system safe and the lights on, the delivery sytstem - "the grid" - needs to stay within quite tight tolerances for frequency and voltage (50Hz and 240V in Australia). If things get too far out of whack, or stay out of whack for too long then the safety systems start to activate and shut down parts of the grid to prevent damage. Managing the grid and keeping things from failing is actually a fantastically complex task. A great illustration of the sorts of things that can go wrong are the story of the 2003 blackout in the northeastern US, and the Texas power grid failure of 2021.

This means that supply and demand must be exactly balanced at all times. In the National Electricty Market (NEM) for Australia, which covers the eastern states and South Australia, the market operator (AEMO) operates a planning and bidding process every 5 minutes to ensure this balance is maintained on a minute by minute basis. 

This delicate balance between supply and demand has historically been achieved by letting people use electricity when they want it, and then the market operator AEMO organises the dispatch of supply to meet whatever that demand happens to be at that point in time. This means that total demand varies according to the time of day with our wake / sleep cycle, and also with the weather as we turn heaters and air conditioners on or off, use more or less lighting, watch TV in the evening or go for a walk in the park.

Figure 1, below, shows the total NSW demand for the first week of April 2022. All the data used in this series of posts are freely available to the public via the Australian Energy Market Operator (AEMO) although they are not particularly accessible or in a user friendly format. The NEMOSIS software is free and open source window onto that data that improves accessibility considerably, but I used the commercial package NEMsight, which makes things even easier. The OpenNEM project is the easiest of all, but unfortunately has only the most recent week of data available.

Figure 1 Electricity demand in NSW from 00:01 Friday 1st April to 23:59 Thursday 7th April. Total demand is highest during the day, and lowest in the wee small hours of the morning. Average for the state is about 7,000 MW (megawatts), which is about the same as having around 3 million electric kettles, or 3 thousand electric trains running simultaneously.

The demand shown here includes that which is met through rooftop solar panels "behind the meter" so is closer to the the electricity being used, than to the demand which is "seen" by the market operator (anything that happens behind the electricity meter is essentially invisible to AEMO).

Renewable energy sources don't make it any easier

We have some needs to move away from fossil fuel use for electricity production. Yes climate change, but also fossil fuel depletion. We aren't making any new coal, ever. The rate that we're making new oil and natural gas is so slow as to be zero for all intents and purposes. So for both of these reasons and more, we would really like to stop relying on fossil fuels for electricity generation in the grid.

This causes a real problem because as noted above, supply and demand is balanced by letting people use what they like, and then dispatching the supply to meet that. Fossil fuels are dispatchable, in the sense that you can  (more or less) turn them on or off, up or down, in order to meet the electricity demand and keep the whole grid stable.

Renewable energy generation isn't like that. It relies on energy flows in the environment, like the wind and sun. You can't dispatch those sources to the grid if the natural flow isn't available at that point in time, and so there is no guarantee that they will be available to help generate the electricity demanded. The only thing you can do with renewable sources is to "spill" them - turn them down or off when they are not needed, forgoing electricity generation in order to maintain the required balance.

Figure 2 shows how this renewable generation worked in the first week of April. The graph shows electricity supply from different sources. You can see that solar generators, both domestic rooftop units and utility scale commercial plants, only generate during the day and even then that depends on the season and the weather. Wind power can make electricity at night, but is not consistent over the week. Note that on the 5th April there was almost no wind power generated anywhere within the state of NSW.

Figure 2 - Electricity generation over the same period as Figure 1. "Other" generation is mostly fossil fuels, used to fill in the gaps between the total demand, and the generation from these renewable sources.

Let's go to 100% renewable generation

Figure 1 shows us the instantaneous power requirement for NSW in the period 1 - 7th April 2022. Power multiplied by time (the total area of blue shading in the graph) represents the energy requirement for that week - 1.23 million megawatt-hours, with a wholesale value of about $270 million. Of that energy, about 21% was generated from either solar or wind, the remaining 79% mostly from fossil fuels  (74%) and hydro (5%).

We can do some experiments with the data to test what might happen as we build more renewable generation. Perhaps we can even get to the goal of 100%. For example, suppose that we go on a massive program of wind farm building, so that we have 5 times as much wind farm capacity installed as we currently have in NSW. What would that first week of April have looked like? See Figure 3 below.

Figure 3 - Electricity generation over the same period with a five-fold increase in wind power capacity. The vertical red line is 5:30 AM on 5th April. The sun is still below the horizon and almost no wind power is being produced across the state. To meet demand at this time using wind, we would have to expand the NSW wind generation capacity by more than 120 times what's already installed!

Now we are up to 57% renewable generation but if you look closely, you can see a couple of occasions on the third day, and on the 6th and 7th evenings,  when we had to spill some renewable generation because the total exceeded the demand. This electricity has to be wasted because there is nowhere it can go. If it stays on the grid the voltage will start to rise and then the safety systems will start blacking out parts of the network. So we have to turn off some wind turbines before that happens.

In the scenario shown in figure 3, we have to spill about 3000 MWh of electricity, worth perhaps half a million dollars.

We get a similar situation with the solar - expanding commercial solar farms by a factor of 5 also gets us close to spilling electricity (shown in Figure 4).

Figure 4 - Electricity generation with a five-fold increase in commercial solar farms. No spill, but only 39% of energy generated renewably.

This shows why a renewable electricity grid needs to be able to store energy somehow. There are periods (such as 5:30 AM on the 5th April - see the vertical red line in Figure 3) when none of the renewable resources are available. We will need to be able to draw from hydro, from batteries, or from some other form of storage at those times. 

But exactly how much storage do we need? That's a question we'll explore next time.

P.S. I've made quite a few simplifcations here, in the interests of not obscuring the big picture. We'll address some of those in future posts.