BRYAN LEYLAND: A solution to our electricity problems
- Administrator
- 1 hour ago
- 4 min read
The proposal to subsidise plug-in solar — small solar panel units that households can hang off the balcony and plug straight into a wall socket – indicates how far the debate over our power system has drifted from its fundamental objective: to provide a reliable and economic supply of electricity
A utility-scale solar farm looks cheap only if you ignore what it costs to keep the lights on when the sun isn't shining and ignore the cost of the batteries, gas peakers, and transmission capacity needed to keep the lights on every night and on cloudy days. Once backup is priced in, solar turns out to be expensive. Rooftop solar is worse than solar farms: roughly three times the cost. This is because of the smaller size and installation costs. Plug-in solar is even more expensive and less efficient. Subsidising it shows that the politicians promoting it are badly advised and motivated by futile virtue signaling.
Another example of the lack of reality is that reports from Consultants, Transpower, MBIE and others all make the same underlying assumption: that New Zealand can build a power system dominated by wind and solar and still, somehow, meet demand at all times and at a reasonable cost[1]. All their predictions rely on batteries – which are seriously expensive[2] – and "demand side management”.
Domestic water heater control apart, "demand side management" means draining home batteries and electric vehicles when the grid cannot meet the demand, and expecting industry, commerce, and households to do without when the grid supply is insufficient. There is no working example anywhere in the world of demand-side management being used in the way that these reports assume — it is a pious hope, not a proven option. What will actually happen is that dairy farmers and factories, hospitals, data centres and anyone else that is critically reliant on a continuous supply will start-up their existing emergency diesels and, if necessary, buy new ones.
The underlying issue is that New Zealand's electricity market was designed on the belief that a short-term spot market with hedging would magically deliver a reliable and economic supply. This belief has become an article of faith, in spite of the evidence to the contrary. Under this market, the way to make a profit is to keep the system on the edge of a shortage[3]. This guarantees problems in a dry year.
What we need is a nationally coordinated market with the prime objective of providing a reliable and economic supply based on long-term contracts with generators. New generation would be secured on the basis of international competitive tenders for long-term generation that will deliver power when it's needed, not just when the wind happens to blow and/or the sun shines. Under this market, wind and solar would have to compete on genuinely equal terms, because the system coordinator would factor in their true cost by including the cost of the backup capacity and extra transmission they require, rather than passing this cost onto all consumers[4].
Four changes are needed to put the system on a sound footing. First, abandon the net-zero target, as Britain's Conservative Party and the USA have already done because the pursuit of net zero increases electricity prices and drives out heavy industry. Second, expedite exploration and development of new gas fields such as Kawera[5] north of Taranaki. Third, restructure the electricity market along the lines above, so long-term benefits — not short-term spot prices — drive investment decisions. Fourth, build new dispatchable generation – more geothermal and hydro plus a new coal-fired generation. Hampton Downs, close to the Waikato River is a plausible site, with Maramarua coal transported by ropeway or conveyor. At the same time, seriously evaluate nuclear power: factory-built reactors of around 300 MW are expected to be commercially available within a decade, and would provide reliable, low cost generation[6].
The payoff would be substantial: something in the order of $4–8 billion a year saved by abandoning net zero, a cheaper and more reliable electricity supply, and the associated economic boost. A country that isn't rationing power during dry years, or subsidising the least efficient forms of solar generation will prosper.
Those people who still believe that if we reduce our emissions of man-made greenhouse gases, our climate will improve, will object strongly to dumping net zero. What we need to point out is that nothing New Zealand does can change the climate of the world – and hence the climate of New Zealand – and that it would be far wiser to spend the money saved improving our resilience against an ever changing climate. They also need to be told that of the 195 countries that signed the Paris Agreement only 19 have reported on progress. 15 out of the 18 admitted that they had failed to meet their targets[7]. It's safe to assume that the remainder are also backsliding.
All over the world governments are beginning to realise the impossible cost and ultimate futility of net zero and are starting to resile from it. Here is a opportunity for New Zealand to set an example to the rest of the world!
Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd) is a power systems engineer with more than 60 years experience in New Zealand and internationally.
[1] From Bjorn Lomborg
[2] https://www.technologyreview.com/2018/07/27/141282/the-25-trillion-reason-we-cant-rely-on-batteries-to-clean-up-the-grid/
[3] parting statements from two gentailer CEOs