Bryan Leyland: Our power system is in a parlous state

"The Government should be preparing for the worst." Photo / 123rf

OPINION

Virtually every aspect of our power system is a cause for concern.

Transpower, as system operator, has warned that the system may not be able to meet peak demands when wind and solar power are low and that we are at risk of major shortages and blackouts if, as predicted, there is not much rain in the hydro catchments next year.

So, we are at risk of power cuts in the short term and there is nothing planned in the longer term that can provide the necessary storage for low-wind periods and dry years.

Abandoning the impossibly expensive Lake Onslow storage scheme exposes the failure of the “NZ battery project” to come up with an emissions-free, low-cost, large-scale storage technology that is essential if we are to continue developing large-scale wind and solar power.

Existing gas fields are running down and will only be able to provide gas for dry year cover for about five years. The Government changing the rules for offshore gas exploration will not result in any new gas fields being developed.

No major oil and gas company will risk exploring and developing a new gas field while there is the threat of a change in government policy and while the market for gas is turbines that will run occasionally in normal rainfall years and at capacity about one year in five.

This rules out the option of fast-start open-cycle gas turbines to keep the lights on. Large-scale gas storage could help, but the flawed electricity market does not reward those who could provide such storage.

Batteries for long-term storage are far too expensive. Sufficient battery storage to average out the generation from a windfarm for one year would cost at least 50 times as much as the wind farm. Batteries can help with short-term system events, but this can also be done at fraction of the cost simply by installing smart thermostats on all domestic water heaters. The Electricity Authority won’t consider this option.

As things stand at the moment, continued development of large-scale wind and solar power can only lead to frequent shortages, rotating blackouts and huge price spikes.

In the days before we had an electricity “market” the main objective was to avoid shortages in anything less than a one-in-20 dry year. If this was met, we were assured of an economical and reliable supply. The electricity market changed all that. Now there is no one responsible for keeping the lights on or making sure that system development aims to minimise the overall cost of power or that the lights stay on.

As stated by two departing generation company chief executives, the industry’s aim is to maximise income by keeping the system on the edge of a shortage. The inevitable result is major shortages and blackouts in dry years.

Pursuing net zero by 2050 by promoting electric heating, electric cars, batteries, wind and solar power further complicates matters.

The drive to convert coal-fired industrial boilers to electricity ignores the fact that, for as long as Huntly keeps burning coal, this will often result in Huntly producing two and a-half times more CO2 to provide the electricity needed.

Switching industrial heat to electricity should only be contemplated once the power system is more than 98 per cent renewable and there is ample low-cost power available. This could be years away.

Electric cars are an expensive way of saving emissions of carbon dioxide and, all over the world, there appears to be a growing reluctance to spend 50 per cent or more on a car that depreciates rapidly, takes longer to refuel, has higher insurance costs, and has a shorter range than a conventional car.

If enthusiasm for electric cars continues to decline there is a significant risk of a major crash in the valuations of electric car manufacturers such as Tesla, which is currently valued at 10 times the value of Volkswagen. One analyst believes Tesla is already overvalued by a factor of 10.

There are also indications that wind and solar construction markets have peaked. Offshore wind farms have turned out to be a disaster due to ever-increasing installation costs and higher than expected maintenance costs.

Electric cars and renewable energy would not exist without government mandates and subsidies. All countries that have significant amounts of renewable energy have experienced major increases in the price of electricity.

Our Government should recognise that net zero is not a realistic goal and be preparing a “Plan B” that minimises fossil fuel use whilst maintaining security of supply.

A policy with a primary objective of providing a reliable and economic supply has significant attraction.

This means every new generating plant should contribute to providing a low-cost reliable supply.

A secondary objective would be to minimise emissions of carbon dioxide. This means building a few more solar and wind projects, utilising the remaining gas as efficiently as possible to back-up the intermittent solar and wind generation, and accepting that in a dry year Huntly will burn a lot of coal.

And somehow the electricity market needs to develop a payment mechanism to ensure that Genesis keeps Huntly operational and at least 1 million tonnes of coal on the stockpile.

There is no doubt that our power system is at risk and the Government should be preparing for the worst, including a significant risk of a major shortage this coming winter.

Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE (retired) is a power systems engineer with more than 70 years experience all over the world.