Tuesday, August 18, 2009

Could baseload power demand be a myth?

In November 1993 I took my radio microphone into the control room at the Sydney utility Pacific Power.

It was Melbourne Cup day. I was there to see and record what happened during the few minutes the race was run.

I learned that providing power is a very difficult (and very wasteful) enterprise.

For the the alternating current to keep coming out of our sockets at 50 cycles per second supply needs to exactly equal demand (as the economists would say).

When power cBoldonsumption goes down (as it does every year during the Melbourne Cup when factories stop their production lines) the supply has to shrink at the same time, otherwise the readout on the control room wall shows not 50, but 50.1 or 49.9 or even worse, and devices such as televisions that depend on the direction of current switching 50 times per second rate don't work properly.

So as the power demand eased off, the machinery began cutting the supply...

First it shut off the intake to hydro turbines under the water in the Snowy Mountains, then it would stop gas turning turbines in coal-fired plants in the Hunter.

"But how can you do that?" I asked, although probably not in exactly those words.

"If you stop burning coal to boil the water, you won't be able to quickly start again when the Melbourne Cup stops."

The answer - more or less in these words: "We just point the steam away from the turbine until its time to point it back."

Coal-fired power generators (and nuclear-fired ones) can only accommodate quick changes in power demand by wasting power.

Well that's okay, the advocates of coal and nuclear say, they're needed for "baseload".

I began to doubt that then, and to suspect the causality ran the other way - that baseload is created in order to accomodate the way coal (and nuclear) plants work.

We create baseload "demand" by giving people financial incentives to heat their water at night.

A few years later an engineer phoned me at the ABC to explain (and complain) about his suspicion that Victorian power suppliers were creating baseload "demand" by putting a higher voltage through the wires at night so that in order to run household meters more quickly. He said he had the measurements to prove it. He also said they stopped doing it when he complained.

Wind power and hydro have none of these problems - yet we are told they are not good for base load.

A few weeks back I had to write a story for The Age about a related matter - which they didn't publish (sometimes it happens). It's down below.

Then I remembered this piece from John Quiggin which puts a lot of my vague thoughts into ordered words.

I've reproduced it right here (but also read the original for the comments).

What do you think?

(By the way, the Pacific Power people told me that they have to adjust the power supply to fit around the commercial breaks of really popular TV programs. Not so much because everyone gets up and turns on their kitchen lights, but because they go to the toilet, and activate pumps that have to haul more water to the top of Sydney's water towers.)

The myth of baseload power demand

July 22nd, 2009 John Quiggin

Today’s Fin has a leader arguing that we should be laying the ground for a move to nuclear power. It’s commendably realistic about the long time lags involved, and argues we should get started on preparations now. My view is that it would be better to wait and see if the US makes progress on its (currently faltering) attempts to revive the industry there. But the thing that really got me going was the repetition of the claim that alternative energy sources are problematic because they can’t meet “baseload power demand”.

I’ve said before that this claim is wrong, but I think it’s time to sharpen my position, and state two claims:

*There is no relevant sense in which baseload power demand is a meaningful concept in our current electricity supply system.

*Any electricity supply system likely to exist in the next 40 years and capable of meeting peak power demand will have no problems meeting baseload demand.

The first point may seem paradoxical, but the reasoning is quite straightforward. Our current electricity system is based primarily on coal-fired power stations which cannot be turned on and off at short notice. So, generating power during times of peak demand (daytime) entails generating power during off-peak times, even if there is no demand for that power at a price that covers average costs. That is, we have a baseload supply, which easily exceeds the demand for off-peak power at average cost, and sometimes even at fuel cost. The result, as we observe, is that off-peak power must be heavily discounted, and even so, demand is barely enough to keep the turbines turning.

To consider any meaningful notion of baseload demand, we could do a bottom-up analysis, and consider how much of electricity demand corresponds to the notion of a continuous, stable 24/7 demand. In the average household, for example, this would include the fridge and those ‘vampire’ appliances that are left on standby all the time. In addition, of course, lots of households have off-peak hot water, but this is only because of the price incentives designed to get rid of the excess baseload supply. The same points apply to offices and a most industrial uses (including some that operate at night to take advantage of cheap power, even though other costs are higher). There are only a few continuous processes like aluminium smelting that really constitute baseload demand in the strict sense. Of course, there are off-peak demands that don’t constitute baseload in the strict sense, like people watching TV at 3am, but there’s no reason to think that such demands are large.

To get a quantitative handle, we can use the following analysis: currently off peak prices are about half of daytime prices, and offpeak demand is about half of daytime demand (illustrative numbers only, will fix). If we didn’t discount offpeak electricity, it seems likely that offpeak demand would be around a quarter of daytime demand.

So, as long as 25 per cent of supply is generated by baseload suppliers like coal, oil, geothermal and nuclear, our main problem will be one of excess baseload supply, as at present. We’re unlikely to reach that point for some decades. But even then, the offpeak demand could be met by reliable sources that are independent of time of day, most obviously gas and hydro. In that case, standard principles of marginal cost pricing would suggest that there should be no off-peak discount. In such a system, the baseload sources would be used optimally, rather than generating excess low-value electricity as at present.

A baseload demand problem would only emerge in a system reliant almost entirely (more than 75 per cent) on solar electricity. And, even if such a problem emerged, it could be dealt with exactly as we deal with our current problem of excess baseload supply, by changing relative prices.

I haven’t dealt with the separate problem of supply variability from solar and wind (hint: the answer has to do with prices, as before). But, in our current circumstances, and as regards marginal increments to the system, the far bigger problem is that of supply invariability. It is a positive disadvantage for nuclear that it generates power 24 hours a day rather than solely during the daytime. Much of that power, and the fuel used to generate it, is effectively wasted.

You're getting smart meters, whether you want them or not

August 3, 2009 Peter Martin

Expect an extra $53 per annum on your electricity bill from next year for a service you probably haven't asked for.

The Australian Energy Regulator has proposed a range of increases averaging $53 dollars per household to pay for new compulsory "smart meters" to be installed in all Victorian homes over four years from 2010.

The new fees set out in the draft declaration would apply to all homes from next year even though the introduction of the smart meters would be staged.

The annual fee will increase by a further $25 in 2012.

AER Chairman Steve Edwell concedes that the bulk of the benefit from the smart meters will go to the electricity distributors who will no longer need to send meter readers to each house.

But he says the regulator will be making sure that those eventual savings are passed back to customers in tariffs.

"There's a four-year roll out and everybody pays upfront. Once the meters are installed and we starting getting some cost savings, they will be passed back to consumers," he told The Age.

Asked why consumers had to pay the full cost of something designed to benefit the suppliers he said that the distributors had wanted certainty.

"They've effectively got to order all these metes upfront. They are incurring charges on day one that they want to know they'll get compensation for."

The new meters communicate with the distributors by a range of technologies including mobile phone signals and have a short life span, necessitating a continuing impost of electricity bills beyond their installation.

Victoria is alone in mandating the technology without extensive trials.

"Victoria is leading the charge," said Mr Edwell. "All the other states are following the decision of the Ministerial Council on Energy to trial them first to look at the costs and benefits."

Those benefits include allowing the suppliers to charge higher tariffs at times of peak power use, in theory allowing them to alter the price minute by minute.

"You'll see the result on your bill and you'll be able to alter your behaviour to cut your spending, for example by not using your washing machine in peak time or turning off your air conditioner."

"If it succeeds in cutting peak power use there will be less need for investment in the network and less need for power prices to keep rising."

But Professor Stephen King of the Melbourne Business School is unconvinced, describing the
compulsory installation of and payment for the meters as "bad economics".

"If the benefits outweigh the costs then the market will sort it out - consumers and suppliers will come to an arrangement.

"There is no suggestion that the government needs to force everyone to have Pay-TV cables connected to our houses, we would view such compulsion as ludicrous," the former ACCC Commissioner writes on his blog.

"Yet smart meters are no more complex than Pay-TV infrastructure."

"But the government might be doing it because they do not think the private benefits outweigh the costs, in which case the roll out is just an expensive political stunt – expensive to every household in Victoria."

Photo: UK's Battersea power station, Guardian