We need a revolution in approach to overcome the reality that traditional wind and solar provide intermittent, unstable and uncontrolled electricity. 
David Green, Founding Partner, Lyon Group 

As that famous Beatles song goes: 

You say you want a revolution 
Well, you know 
We all want to change the world 
You tell me that it’s evolution 
Well, you know 
We all want to change the world 

A smooth transition to a renewable based electricity system may well require an evolution in approach but it undoubtedly requires a revolution in thinking and action as it must challenge today’s new ‘Inconvenient Truth’: ‘traditional renewables’ (i.e. wind and solar) provide intermittent, unstable and uncontrolled electricity.

The current evolution must in reality be a revolution in the way in which utility scale advanced battery storage is integrated with traditional renewables. Full integration of these technologies is imperative to face up to this ‘Inconvenient Truth’ and address what has now become our ‘Uncomfortable Reality’.

Australia has roughly 90GW of renewable energy projects seeking connection to the National Electricity Market (NEM). 

Much of this would provide intermittent, unstable and uncontrolled electricity. This is fine while there is a balance of the various forms of generation connected to the grid, providing the necessary power system requirements in quantities sufficient to offset this and maintain the grid within its fine operational tolerances.

So, what are these new ‘Inconvenient Truths’ that are being avoided? What are the words no one wants to speak or hear?

Let’s start the revolution in thinking needed by acknowledging just few of the ‘Inconvenient Truths’:

  • wind and solar output is intermittent/uncontrolled, destabilises networks and transfers costs and risks to customers;
  • pumped hydro is not renewable energy if it pumps using grid sourced electricity;
  • customers ultimately bear the cost of renewables not addressing their own intermittency;
  • co-locating a battery with utility scale renewable projects does not fix the problems; and
  • developers of wind and solar projects have been allowed to get away with having others pay for the deficiencies of their projects.

Hiding behind a ‘Green Veil’ and ignoring these ‘Inconvenient Truths’ has resulted in the very ‘Uncomfortable Reality’ that pervades our electricity sector and undermines public confidence in the ability to transition to a renewables based electricity sector. 

We now have an electricity sector beset with poor and conflicting policy that is not managing the transition to a renewable sector effectively, industry regulation that is lagging well behind technological change, and customers paying a high and unnecessary price for both.

The most significant question is, will we allow this to continue and allow the ‘Uncomfortable Reality’ to become a ‘Permanent Nightmare’? 

Transition to a renewables based NEM should not mean that renewable energy costs are reduced at the price of not adequately meeting power systems requirements, passing inefficient costs to customers or reducing energy security. 

These were not the tenants of the NEM that was introduced some 20 years ago with a principle of equity which sought to prevent the regulated sectors of the NEM being lumped with cost and risk transfer from the generation sector.

None of these adverse consequences are necessary.

Our collective thinking needs to be revolutionised if we are to stop the slide towards a ‘Permanent Nightmare’ characterised by:

  • projects green washed as renewables;
  • traditional renewable projects avoiding the cost of managing their output and instead passing the cost and risk to others;
  • electricity customers bearing the cost of poor policy and slow to move regulation;
  • undermined industry competitiveness due to lower energy security;
  • confusion between environmental, energy and industry policy driving sub-optimal outcomes; and
  • policy and regulation that limits the speed of innovation, which in turn stifles growth and cost reduction.

It doesn’t have to be this way. Solar and wind projects can be configured and operated to meet most of the power system requirements of AEMO and network operators, and achieve commercial returns.  The next stage of the renewables evolution is available now, with 100% clean generation fully integrated with flexible battery energy storage systems and advanced inverters.

This approach is very different to traditional wind and solar projects that are so called ‘battery ready’ and projects ‘co-located’ with storage (which has been demonstrated to do nothing to deal with the obvious deficiencies of traditional renewables).

Fully integrated projects behind the meter only source their energy from their own renewable generation so there is no need to charge the battery storage system with non-renewable grid electricity.

Generation projects should face the full force of competitive pressure of the wholesale electricity market, which means the cost of the electricity produced by the projects must compete with other forms of generation on a level playing field. This is what will put real downward pressure on the electricity prices faced by consumers. 

By bringing stable renewable energy to the grid, integrated renewable projects will play a significant role in facilitating a faster and larger deployment of renewables than would otherwise be cost effective 

We are not suggesting that all projects need to be integrated. But we do consider that, by permitting traditional renewables to avoid meeting many of AEMO’s power system requirements, we are moving ever closer to entrenching a ‘Permanent Nightmare’.

You say you got a real solution
Well, you know
We’d all love to see the plan
You ask me for a contribution
Well, you know
We’re doing what we can

Evolution or Revolution? When will we address the new ‘Inconvenient Truth’?

© 2020 Lyon Group

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