For the last few months the Government of South Australia has invited feedback on a comprehensive policy to shape our state’s future. The Green Paper on the energy transition covers various energy and resource subjects, and sets a multitude of questions.
RePlanet Australia has considered, researched and submitted enough responses to arrive at the view that South Australia’s Green Paper is quite short of comprehensive. Nevertheless, it is worth reading and answering, and we provided the following feedback.
What do you want from South Australia’s energy transition?
By way of an answer to this question, RePlanet Australia invites the Department of Energy and Mining to first consider our general goals for clean energy from our website:
More than two thirds of global greenhouse gas emissions come from energy production and use. This primarily comes from burning fossil fuels such as coal, natural gas and oil, harming our health and our environment. Australia has failed to implement a rapid and orderly transition away from fossil fuels. We must do better.
Human wellbeing depends on the availability of affordable and reliable energy. So, let’s create an abundant, clean energy system with a small environmental footprint!
Reduce CO2 emissions to a level compatible with the Paris Agreement. Policies should focus on outcome, not technology.
Australia should adopt a carbon tax to ensure the worst polluters pay and encourage a clean energy transition.
Avoid “carbon leakage” and set up a system of taxing imported goods and services at Australia's borders from countries with higher emissions.
Stop discriminating against nuclear energy, an effective and proven way to phase out fossil fuels and reduce emissions.
Support new clean technologies and innovation in a smart and efficient way.
Avoid energy poverty and ensure a just transition, especially for those most affected.
Consistent with this approach, RePlanet Australia endorses the Government of South Australia’s focus on a transition to a net-zero emissions future. Public consultation on policy development in 2023 is a timely step towards achieving energy and emissions goals in 2050, when the range and scale of associated challenges are honestly considered. We envisage that, with sufficient focus on outcomes and correspondingly strong policy, South Australia is capable of outperforming this timeframe and setting the state up for this century as a full-time clean energy exporter to wider Australia as well as trading partners.
RePlanet Australia has prepared responses to a selection of the Green Paper’s questions in close consultation with South Australian members.
What are the barriers that you foresee will be encountered as part of South Australia’s energy transition?
There are minor and potentially major barriers.
Specific to the goal of net-zero emissions by 2050, it’s first important to explicitly define this goal. Unfortunately, the Green Paper doesn’t provide a definition, notwithstanding the general context of the document clearly relating to decisive and permanent energy-related emissions reductions. We provide a definition and expanded context here authored by Jonathan Armstrong and Replanet member Ben Heard:
The expression net zero has swiftly become a global rallying cry that has taken a firm hold at the highest levels of policy. It is an elegant, scientifically-robust concept, focused on an outcome – emit no more greenhouse gas than we can remove.
Given global emissions of carbon dioxide alone from combustion of coal, oil and gas are around 33 billion metric tonnes per year, the emphasis must be on the “zero”. We cannot plausibly remove or store emissions on that scale – we must in fact halt emissions on that scale.
This requires technologies, processes and systems of social organisation with zero climate impact that enable people to continue to live in health, safety, security and reasonable prosperity.
There is no cap under which we can trade, no bureaucratic attempt to ration the global atmospheric commons. There is a single goal, relevant to all, that can be reached through the development and scaling of solutions which mean cleaner air and advantageous re-industrialisation.
No wonder net zero is proving itself to be politically durable. However, challenges lie ahead. Popular focus remains on our power grids, which are only responsible for about a third of Australia’s national emissions.
Along with precision of terminology, the assumptions accepted at this stage of the process can develop into barriers in the future, where relevant information isn’t properly considered or misconceptions are accepted in its place. For example, assuming that a limited combination of popular technologies will more or less expand to achieve a future state-wide electricity supply network sufficiently decarbonised to meet net-zero requirements, will grow from a minor barrier to a major barrier if this fails to eventuate, and if the increasing need for inclusion of additional low emission technologies remains unevaluated properly. Barriers under such a scenario are most thoroughly removed at the beginning.
More relevant details on major barriers will form the answers to subsequent questions.
What are the key risks (short, medium and long-term) you consider the Government of South Australia should be mindful of and how can these be addressed as part of this work? To what extent are such risks quantifiable and is there any supporting evidence?
Refer to our answers addressing rooftop solar PV and energy storage.
What technologies do you think the Government of South Australia should explore further, in partnership with industry, as part of the energy transition, that may not already be part of the state’s energy system? Provide any supporting evidence, data or modelling on the potential viability of such technologies (noting whether such information can be published).
RePlanet advocates for all emissions-free energy technologies. As is the case for multitudes of grass-roots non-government organisations emerging in this century, this includes nuclear fission just as solidly as it does solar, wind, etc. Nationally, RePlanet Australia holds a focus on the removal of the federal prohibition on nuclear energy that was put in place without regard to scientific guidance or public consultation.
The South Australian Nuclear Fuel Cycle Royal Commission last decade evaluated a significant amount of scientific information related to nuclear energy and the related fuel cycle. It summarised:
South Australia can safely increase its participation in nuclear activities. Such participation brings social, environmental, safety and financial risks. The state is already managing some of these risks, and the remainder are manageable.
There is every reason to be confident that the inventory of (realistic and perceived) risks brought to the royal commissions attention was exhaustive.
To emphasise a particularly crucial, net-zero emissions related scientific determination from the final report (Figure 1.1) “the median estimates under the NREL analysis ranked the emissions of nuclear (12 grams carbon dioxide equivalent per kilowatt hour, gCO2-e/kWh) within the range of solar PV (18–50 gCO2-e/kWh, depending on technology choice) and wind (12 gCO2-e/kWh).” The source was a 2012 meta-analysis by US National Renewable Energy Laboratory researchers. In 2022 the UNECE Task Force on Carbon Neutrality tasked the Luxembourg Institute of Science and Technology to perform new life cycle assessments of various candidate energy technologies across a dozen global regions, and they found a range of 5.1–6.4 gCO2-e/kWh for conventional nuclear energy.
In stark contrast, the economic evaluation performed for the royal commission is outdated. To illustrate, three of the nuclear reactor designs specified in the work will never be built, while many which were not even announced by vendors at the time are now under consideration for deployment in other nations’ energy transition programs and review by licensing authorities. The royal commission’s conclusions regarding the immaturity of advanced designs has turned out to be overly conservative. To provide just one example, US company X-energy launched its ‘Xe-100’ conceptual design for a helium-cooled pebble bed small modular reactor in 2017, and in 2023 is progressing a project with Dow to provide power and steam to the Seadrift manufacturing site in Texas, starting construction in 2026. X-energy is similarly working with Energy Northwest for reactor deployment, starting from 2030, in Washington State, with Ontario Power Generation on potential industrial applications in Canada, and with Cavendish Nuclear in the UK for an intended new power plant at Hartlepool in northeast England. Incidentally, the NREL life cycle assessment, mentioned previously, found a median emissions intensity value for gas cooled reactors of 6.9 gCO2-e/kWh.
The projected capital costs of many designs are considerably more confidently estimated than they were last decade, with a small selection recently analysed in the Australian context by Ben Heard. However, the consensus among nuclear energy sector professionals, and collaborative stakeholders, is that the federal prohibition represents a fundamental barrier to assigning resources towards the necessary finance and engineering work to arrive at robust vendor cost estimates for the Australian context.
The most important recommendation of the royal commission was related to removing the federal prohibition. However, lack of progress on this recommendation need not mean that net-zero emissions consultation and policy development in South Australia ignores the potential of future contributions offered by nuclear energy technologies. This is particularly important in light of growing social consent, on which the final report stated:
Social consent is fundamental to undertaking any new nuclear project. Social consent requires sufficient public support in South Australia to proceed with legislating, planning and implementing a project.
In 2016 a state survey commissioned by SACOME found 45% of respondents supported or strongly supported nuclear power. Subsequent polling in 2022 revealed 58% support progressing the necessary political conversations and legislative frameworks to enable future nuclear energy use in South Australia, and 75% of South Australians support having an “informed and balanced conversation about having a nuclear energy industry in South Australia”.
Do you consider the Step Change scenario described by AEMO in its Integrated System Plan to be the most likely scenario in South Australia?
RePlanet Australia does not consider this to be the case. We are aware of widely reported headlines from December 2021 about AEMO’s ‘Step Change’ ISP scenario being nominated most likely by the stakeholders involved in the draft process, and have reviewed the relevant reports made available by AEMO. However, we have monitored the addition rates of new solar and wind capacity alongside the real world progress in major new transmission and interconnector links and in the Snowy 2 project. In less than two years it’s already apparent that the rate of progress is far from meeting what’s laid out in the scenario famously voted on by stakeholders.
The ISP scenarios are necessarily NEM-wide, given that they combine transmission infrastructure planning with market-wide modelling of renewable energy resources. Notwithstanding, it’s conceivable that South Australia, as roughly 7% of the NEM on a generation basis, may continue close to what has been ambitiously modelled at the state level in terms of a continued growth in the share of solar and wind in annual electricity consumption, which has so far maintained a distinctly downward trend in emissions intensity. By one estimate that intensity was 168 gCO2-e/kWh in 2022 (accounting for full life cycle emissions). It is so important that this value is forced down as close to zero as realistically achievable that RePlanet Australia finds little value in assurances of confidence in models and rejection of non-prefered technology options.
Two questionable aspects of the ISP modelling fundamental to South Australia - continued robust deployment of rooftop solar PV, and dramatically accelerating adoption of distributed battery storage - will be addressed in answers below.
What role should rooftop solar PV play in the future of South Australia’s grid?
In 2022 rooftop solar contributed 1,242 million kilowatt hours or 18% of the state’s electricity generation, as estimated in Table O of Australian Energy Statistics. The variable nature of the technology means that this was spread across overcast days and night time at one extreme, and fine clear middays in summer at the other. The latter has resulted in negative demand periods of down to -236 megawatts as reported by SA Power Networks.
To aim for a greater share will bring many benefits to the state’s solar industry as well as to more homes that can reduce their load on the grid (depending largely on size of feed-in tariffs and the retail price of avoided grid supply), but will also increase the technical challenges emerging from the extremes.
RePlanet Australia has also examined APVI and ABS data for South Australia, regarding the potential limit of suitable rooftops. While the latest APVI charts indicate 44% of dwellings have rooftop solar, adjusting for owner-occupied status raises this to around 70%. The difficulty renters have accessing rooftop solar has been known for many years but a game-changing approach is yet to emerge, and rooftop systems on investment properties are still really rare. All else being equal it’s a matter of speculation for how much closer installation numbers will get to 100% of suitable dwellings, but this is probably an important factor to have impartially quantified, and RePlanet Australia expects it to have direct bearing on the role rooftop solar PV plays in the future of South Australia’s grid.
How should the Government of South Australia ensure rooftop solar PV delivers the greatest value to consumers while maintaining a secure and reliable network?
RePlanet Australia would like to comprehensively address the concept of value raised in this question. For many it will have the meaning of relatively short-term value, in this case being revenue from their retailer through feed-in tariffs, or self-use of rooftop solar generation to reduce bills. But in the long-term we must all consider the value to the electricity supply system itself. Technologies which contribute little, or diminishing, value to the system can adversely impact the cost of the system in some circumstances.
As summarised by the Electric Power Research Institute, the marginal value of renewable energy capacity shows a decline as penetration on a given grid increases. For rooftop solar PV, which tends to produce power in a correlated way in South Australia, further increases in capacity and thus total power output is actually decoupled from meeting demand. Thus, for a set cost per capacity (which has remained static or even increased in the last few years in South Australia, according to SolarChoice data) there is progressively less system value. It is yet to be conclusively determined if this value deflation is manifesting in the state’s regional market, potentially camouflaged by incentives, interventions or regulatory settings. Incidentally, this phenomenon also potentially impacts South Australian utility scale solar PV, which recent analysis for RePlanet Australia shows has generated notably less in aggregate than initially expected by project proponents.
RePlanet Australia urges the Government of South Australia to incorporate robust and impartial analysis of rooftop solar PV value deflation into consultation and planning going forward.
What role should energy storage play in the future of South Australia’s grid?
What energy storage is needed to deliver a modern energy system that operates reliably and affordably? For example, grid-scale, distribution level, and/or household energy storage?
How can the Government of South Australia ensure energy storage delivers the greatest value to consumers?
RePlanet Australia would like to address these questions all together, as the value of energy storage to a given electrical energy supply system is potentially subject to deflation similar to the case of rooftop solar PV described above.
Analysis for the MIT Energy Initiative concluded that the net value of energy storage over a range of energy capacities, solar+wind shares on two distinct grids, and other sensitivities, falls as power capacity (as a percentage of peak demand) rises. Value is highest when variable renewable generation is up at 60% penetration but storage power capacity is kept to 4% - it falls steeply past this percentage. As can be observed at the OpenNEM site, these numbers aren’t too far from where South Australia finds itself today. One of the study’s sensitivities included significantly lower future storage costs delivering significantly higher net value, but industry tracking of home battery storage costs in Australia indicates no appreciable change on a normalised basis over the last five years. Similarly, on a normalised basis ($/kWh-capacity), the reported cost of AGL’s new battery at Torrens Island is not dramatically lower than that for the Hornsdale Power Reserve built in 2017.
It can’t be stated for certain what flavour of storage is needed for reliability and affordability, let alone to help deliver the state down the best path to net-zero emissions. While significant bulk storage, in the form of pumped hydro, has played such a role in foreign low emissions grids such as France since last century, integration mainly with variable renewable energy on such a scale has not been achieved. The most certainty which RePlanet Australia can offer is that storage should play some role, in that it will decouple renewable generation from weather and diurnal conditions to a greater or lesser extent, in line with consumer expectations for on-demand electricity supply. As with rooftop solar PV, consultation and planning should incorporate robust, sober assessment of value deflation.
What is the best use of hydrogen in South Australia?
The Grattan Institute released a report in 2020 entitled Start With Steel, which proposed that steel production is the most efficient and cost-effective way to utilise hydrogen generated with Australian renewable energy. Chief among several given reasons is the relatively high share of global emissions associated with steel, which conventionally involves the chemical consumption of coal. Despite focusing on eastern coast steel, the detailed analysis in the report can form the basis of similar evaluation in South Australia to quantify the opportunity next to alternatives like cement and ammonia production.
What are the barriers to developing a hydrogen industry at scale in South Australia?
RePlanet Australia notes the technical and economic challenges identified in the National Hydrogen Roadmap in 2018. Incremental progress has been made towards domestic and export opportunities, and the South Australian government can justifiably take pride in its leadership on establishing a clean hydrogen fuel cycle, including the 200 MW backup power station at Whyalla.
However this will be just a first step in developing the industry at scale. Scale will necessarily involve export. While RePlanet Australia considers the AEMO ISP Hydrogen Superpower scenario to be no more likely than the Step Change scenario, export of clean hydrogen (in some form) underpinned by superior renewable resources is inherently key to achieving a sustainable scale for the new industry. The Office of Hydrogen Power as well as subsequent consultation and policy development should actively monitor developments in foreign countries, particularly those to which we’ll seek to export and who presumably are aware of the anticipated competitiveness of Australian hydrogen. These partners will invariably come from the pool of existing liquified natural gas customers, which are countries who invariably already operate, or intend to soon operate, nuclear power for electricity. For example, Japan is a viable export destination but is also developing onshore hydrogen production with high temperature gas reactors. A South Korean conglomerate is partnering with a US SMR vendor to pursue similar production. And Indonesia is planning a nuclear-powered ammonia facility for Borneo using hydrogen produced with molten salt reactors this decade.
A barrier will potentially arise if such efficient, constant-output hydrogen production ventures succeed and scale in countries South Australia needs as export destinations. RePlanet Australia recommends that policy development honestly appraises the competition this may engender.
RePlanet Australia would like to address the following questions with a general response related to resource development.
What sectors will continue to use oil and natural gas in the long-term?
How can the Government of South Australia further support other gas opportunities in the state?
How can the Government of South Australia best leverage opportunities presented by the energy transition to incentivise investment in the manufacturing and mining sectors in the state?
RePlanet Australia explicitly recognises that modern society requires economical development of mineral resources. Notwithstanding historical injustices and ecological harms, mining of hydrocarbons, metal ores and other raw materials can be undertaken sustainably when subject to best practice. Furthermore, the climate-related impact of the use of hydrocarbons for energy production can, in principle, be mitigated by future deployment of CCS-related technology. However, all of these resources should be used as efficiently as possible, and for hydrocarbons this entails moving away from combustion and retention of reserves for refined and manufactured materials, in particular high-grade polymers for industry, manufacturing, technology and construction. For these, along with metals and other minerals, short- and long-term recycling should be the basic priority as a powerful means of maximising efficient material use.
Figure 22 in the Green Paper document provides context for how energy technologies require the investment of mineral resources. The substantial amounts of metals for megawatt capacity of wind energy technologies in particular represent a growing opportunity for further sustainable mineral development in South Australia. This becomes even more pronounced when accounting for the average capacity factors and design lifespans of clean energy sources. RePlanet Australia analysis estimates at least an order of magnitude difference between renewable technologies and nuclear for copper consumption alone, with offshore wind requiring over twenty times more than a 60 year design life nuclear plant on a gigawatt hour basis. This illustrates the long term efficiency of nuclear power, and copper produced through the South Australian operations of BHP, who recently told Federal Treasury that prohibitions on nuclear energy should be removed, will contribute to it.
With assistance from Oscar Archer and Geoff Russell, both SA residents.