Jeff Dimery, the head of the now privately owned Alinta, said concentrated solar thermal power technology was one of two options being considered after the closure of the 240MW Playford, and may be an easier option than trying to source gas for a gas-fired peaking generator, as there is no gas pipeline to Port Augusta.
“We’re exploring the idea of building a renewable facility and integrate that with baseload (from the remaining northern station) and solar thermal would be ideal, as there a good sun resource in the region,” Dimery told Climate Spectator in an interview. “The technology requires funding, and it’s a case of needing to convince government that it is one of better projects. We intend to explore it.”
Playford is one of four brown coal generators eligible to make a tender for the government’s proposed buyout, which intends to remove 2000MW of brown coal generation from the grid by 2020 in order to reduce emissions, and create room for gas-fired generation or renewables to be built in their place.
The solar thermal idea will not form part of Playford’s submission – apparently it matters not what the owners of the retiring generation plant intend to do with the funds (and some may be expected to expatriate those funds overseas), but Dimery is confident that Playford would be an attractive option in any case. For a start, it’s the most polluting, at 1.7t of Co2e/MWh, the early closure of 240MW would have little impact on the National Energy Market, and the workforce could be absorbed at the neighbouring 520MW Northern Power Station without any forced redundancies. That could save on government funds.
The other attraction of concentrated solar thermal power is that it could be integrated into the Northern Power Station, pre-heating boilers in the same way that a solar booster plant will be designed to do at the Kogan Creek power station in Queensland, and/or putting electricity directly into the grid.
Meanwhile, Alinta also has designs on the retail market in the eastern states, and is currently applying for a new retail licence in NSW, Victoria and Queensland, where it plans to establish a new retail business under its home brand, integrated with its retail platform in WA. It is negotiating the sale of Neighbourhood Energy.
Dimery, a former AGL executive, says he expects Alinta to be competitive with the big three utilities – AGL, Origin, and TruEnergy – in both the retail market and the wholesale market. More interestingly, Dimery is one of those who subscribes to the theory that the retail market will be turned on its head in the next few years by new technologies, and it’s the smaller players that will be better placed than the large incumbents.
He says the future business is inside the house, rather than just delivering electrons to the front door. “There is a lot of talk about smart meters, but I think they will be redundant before they come in,” he says. He notes that many white goods manufactures are already installing Zigbee chips in their appliances, which can offer the same communications ability, without a smart meter.
“I think you will see retailers jump in with the likes of Harvey Norman and have their energy plans sold through them, or an internet service provider. The retail shop could change quite dramatically. But we are open to all of that, and we’re having discussions with all of these people.” Dimery says such developments could be occurring soon.
Grand plans for the Pilbara
Dimery also expanded on his company’s plans for a transmission line in the Pilbara that would connect its gas-fired peaking power station at Newman to Port Hedland and effectively “close the loop,” creating a sort of mini grid that would open up options for other energy sources as the Pilbara invests in massive new energy infrastructure.
The Pilbara interconnector – which would link the transmission lines operated by BHP Billiton and Rio Tinto, and end the almost feudal arrangements for energy supply in the region – has been on the drawing board for many years, and was one of the favoured projects of Infrastructure Australia.
However, in a surprise move it was knocked back by the WA government, but Alinta sees plenty of advantages in investing in the transmission line, not least of all ensuring that its 178MW facility at Newman is not stranded when its contract with BHP runs out in 2017, and because of all the other projects that are seeking energy supplies and are finding it almost impossible to source gas, and prohibitive to install diesel.
Dimery says energy demand in the Pilbara is phenomenally strong. With a new grid, Alinta will consider converting its open cycle plants into more efficient combined cycle generators, particularly with the new carbon pricing regime. It would also create opportunities for renewables, such as solar PV or solar thermal, to be built as part of the grid. With the numerous gas plants in the region, many of them peakers, there is a built in redundancy, and the Pilbara could be one of the first areas where solar energy costs match that of gas.
As it is, Dimery notes, the profits that the miners are making from their operations make them worry less about energy costs than reliability.
Dimery says he is a “bit of a fan” of renewables, given he was head of the merchant group at AGL that was responsible for the purchase of the Southern Hydro business and was a key player in many of their wind farm projects, including the massive Macarthur wind farm that has begun construction.
“I think they have a very important role to play in the market,” he says. “One of benefits of building a new retail base in NEM, is that it will have a (renewable energy target) liability, and we will be in a position to support projects. We are getting lots of traffic through here looking for our support.”
But how important a role will they play? “It’s a bit like asking how long a piece of string is,” he says. “There are a number of factors that will influence renewables: new planning laws in Victoria have made it very hard to commercialise wind farms, and that will limit the rollout. There are similar noises coming out of NSW. There is not a whole lot of wind in Queensland, and until there is an upgrade to the interconnector, there is a limit to what wind can do in South Australia.
“On the upside, gas prices are going further north – so cost of renewables are more competitive in a carbon constrained world. The cost curve for renewables is coming down. We are seeing the cost of photovoltaic fall at a rapid rate, concentrating solar thermal is also coming down, and then we’ll see how successful new technologies like wave and geothermal turn out to be.”
Giles Parkinson, www.climatespectator.com.au/