Wind power is not a panacea

Australia electricity grid transition is accelerating as renewables, wind, solar, and storage drive decentralised generation, emissions cuts, and NEM trade shifts, with South Australia becoming a net exporter post-Hazelwood closure and rooftop solar surging.

Key Points

Australia electricity shift to renewables, distributed generation and storage, cutting emissions, reshaping NEM flows.

✅ South Australia now exports power post-Hazelwood closure

✅ Rooftop solar is the fastest-growing NEM generation source

✅ Gas peaking and storage investments balance variable renewables

The politics may not change much, but Australia’s electricity grid is changing before our very eyes – slowly and inevitably becoming more renewable, more decentralised, and in step with Australia's energy transition that is challenging the pre-conceptions of many in the industry.

The latest national emissions audit from The Australia Institute, which includes an update on key electricity trends in the national electricity market, notes some interesting developments over the last three months.

The most surprising of those developments may be the South Australia achievement, which shows that since the closure of the Hazelwood brown coal generator in Victoria in March 2017, and as renewables outpacing brown coal in other markets, South Australia has become a net exporter of electricity, in net annualised terms.

Hugh Saddler, lead author of the study, notes that this is a big change for South Australia, which in 1999 and 2000, when it had only gas and local coal, used to import 30% of its electricity demand.

#google#

The fact that wholesale prices in South Australia were higher in other states – then, as they are now – has nothing to with wind and solar, but the fact that it has no low-cost conventional source and a peaky demand profile (then and now).

“The difference today is that the state is now taking advantage of its abundant resources of wind and solar radiation, and the new technologies which have made them the lowest cost sources of new generation, to supply much of its electricity requirements,” Saddler writes.

Other things to note about the flows between states is that Victoria was about equal on imports and exports with its three neighbouring states, despite the closure of Hazelwood. NSW continues to import around 10% of its needs from cheaper providers in Queensland.

Gas-fired generation had increased in the last year or two in South Australia as a result of the Northern closure, but is still below the levels of a decade ago.

But because it is expensive, this is likely to spur more investment in storage.

As for rooftop solar, Saddler notes that the share of residential solar in the grid is still relatively small but, despite excess solar risks flagged by distributors, it is the most steadily growing generation source in the NEM.

That line is expected to grow steadily. By 2040, or perhaps 2050, the share of distributed generation, which includes rooftop solar, battery storage and demand management, is expected to reach nearly half of all Australia’s grid demand.

Saddler, says, however, that the increase in large-scale solar over the last few months is a significant milestone in Australia’s transition towards clean electricity generation, mirroring trends in India's on-grid solar development seen in recent years. (See very top graph).

“Firstly, they are a concrete demonstration that the construction cost advantage, which wind enjoyed over solar until a year or two ago, is gone.

“From now on we can expect new capacity to be a mix of both technologies. Indeed, the Clean Energy Regulator states that it expects solar to account for half of all (new renewable) capacity by 2020, and the US is moving toward 30% from wind and solar as well.”

Related News

• Electricity Forum News

• Renewable Energy News

Rural Electrification Poverty Impact examines energy access, grid connections, and reliability, testing economic development claims via randomized trials; findings show minimal gains without appliances, reliable supply, and complementary services like education and job creation initiatives.

Key Points

Study of household grid connections showing modest poverty impact without reliable power and appliances.

✅ Randomized grid connections showed no short-term income gains.

✅ Low reliability and few appliances limited electricity use.

✅ Complementary investments in jobs, education, health may be needed.

The head of Swedfund, the development finance group, recently summarized a widely-held belief: “Access to reliable electricity drives development and is essential for job creation, women’s empowerment and combating poverty.” This view has been the driving force behind a number of efforts to provide electricity to the 1.1 billion people around the world living in energy poverty, such as India's village electrification initiatives in recent years.

But does electricity really help lift households out of poverty? My co-authors and I set out to answer this question. We designed an experiment in which we first identified a sample of “under grid” households in Western Kenya—structures that were located close to but not connected to a grid. These households were then randomly divided into treatment and control groups. In the treatment group, we worked closely with the rural electrification agency to connect the households to the grid for free or at various discounts. In the control group, we made no changes. After eighteen months, we surveyed people from both groups and collected data on an assortment of outcomes, including whether they were employed outside of subsistence agriculture (the most common type of work in the region) and how many assets they owned. We even gave children basic tests, as a frequent assertion is that electricity helps children perform better in school since they are able to study at night.

When we analyzed the data, we found no differences between the treatment and control groups. The rural electrification agency had spent more than $1,000 to connect each household. Yet eighteen months later, the households we connected seemed to be no better off. Even the children’s test scores were more or less the same. The results of our experiment were discouraging, and at odds with the popular view that supplying households with access to electricity will drive economic development. Lifting people out of poverty may require a more comprehensive approach to ensure that electricity is not only affordable (with some evidence that EV growth can benefit all customers in mature markets), but is also reliable, useable, and available to the whole community, paired with other important investments.

For instance, in many low-income countries, the grid has frequent blackouts and maintenance problems, making electricity unreliable, as seen in Nigeria's electricity crisis in recent years. Even if the grid were reliable, poor households may not be able to afford the appliances that would allow for more than just lighting and cell phone charging. In our data, households barely bought any appliances and they used just 3 kilowatt-hours per month. Compare that to the U.S. average of 900 kilowatt-hours per month, a figure that could rise as EV adoption increases electricity demand over time.

There are also other factors to consider. After all, correlation does not equal causation. There is no doubt that the 1.1 billion people without power are the world’s poorest citizens. But this is not the only challenge they face. The poor may also lack running water, basic sanitation, consistent food supplies, quality education, sufficient health care, political influence, and a host of other factors that may be harder to measure but are no less important to well-being. Prioritizing investments in some of these other factors may lead to higher immediate returns. Previous work by one of my co-authors, for example, shows substantial economic gains from government spending on treatment for intestinal worms in children.

It’s possible that our results don’t generalize. They certainly don’t apply to enhancing electricity services for non-residential customers, like factories, hospitals, and schools, and electric utilities adapting to new load patterns. Perhaps the households we studied in Western Kenya are particularly poor (although measures of well-being suggest they are comparable to rural households across Sub-Saharan Africa) or politically disenfranchised. Perhaps if we had waited longer, or if we had electrified an entire region, the household impacts we measured would have been much greater. But others who have studied this question have found similar results. One study, also conducted in Western Kenya, found that subsidizing solar lamps helped families save on kerosene, but did not lead children to study more. Another study found that installing solar-powered microgrids in Indian villages resulted in no socioeconomic benefits.

Related News

• Electricity Forum News

• EV Infrastructure News

Smart Grid Modernization unites distributed energy resources, energy storage, EV charging, advanced metering, and bidirectional power flows to upgrade transmission and distribution infrastructure for reliability, resilience, cybersecurity, and affordable, clean power.

Key Points

Upgrading grid hardware and software to integrate DERs, storage, and EVs for a reliable and affordable power system.

✅ Enables DER, storage, and EV integration with bidirectional flows

✅ Improves reliability, resilience, and grid cybersecurity

✅ Requires early investment in sensors, inverters, and analytics

Much has been written, predicted, and debated in recent years about the future of the electricity system. The discussion isn’t simply about fossil fuels versus renewables, as often dominates mainstream energy discourse. Rather, the discussion is focused on something much larger and more fundamental: the very design of how and where electricity should be generated, delivered, and consumed.

Central to this discussion are arguments in support of, or in opposition to, the traditional model versus that of the decentralized or “emerging” model. But this is a false choice. The only choice that needs making is how to best transition to a smarter grid, and do so in a reliable and affordable manner that reflects grid modernization affordability concerns for utilities today. And the most effective and immediate means to accomplish that is to encourage and facilitate early investment in grid-related infrastructure and technology.

The traditional, or centralized, model has evolved since the days of Thomas Edison, but the basic structure is relatively unchanged: generate electrons at a central power plant, transmit them over a unidirectional system of high-voltage transmission lines, and deliver them to consumers through local distribution networks. The decentralized, or emerging, model envisions a system that moves away from the central power station as the primary provider of electricity to a system in which distributed energy resources, energy storage, electric vehicles, peer-to-peer transactions, connected appliances and devices, and sophisticated energy usage, pricing, and load management software play a more prominent role.

Whether it’s a fully decentralized and distributed power system, or the more likely centralized-decentralized hybrid, it is apparent that the way in which electricity is produced, delivered, and consumed will differ from today’s traditional model. And yet, in many ways, the fundamental design and engineering that makes up today’s electric grid will serve as the foundation for achieving a more distributed future. Indeed, as the transition to a smarter grid ramps up, the grid’s basic structure will remain the underlying commonality, allowing the grid to serve as a facilitator to integrate emerging technologies, including EV charging stations, rooftop solar, demand-side management software, and other distributed energy resources, while maximizing their potential benefits and informing discussions about California’s grid reliability under ambitious transition goals.

A loose analogy here is the internet. In its infancy, the internet was used primarily for sending and receiving email, doing homework, and looking up directions. At the time, it was never fully understood that the internet would create a range of services and products that would impact nearly every aspect of everyday life from online shopping, booking travel, and watching television to enabling the sharing economy and the emerging “Internet of Things.”

Uber, Netflix, Amazon, and Nest would not be possible without the internet. But the rapid evolution of the internet did not occur without significant investment in internet-related infrastructure. From dial-up to broadband to Wi-Fi, companies have invested billions of dollars to update and upgrade the system, allowing the internet to maximize its offerings and give way to technological breakthroughs, innovative businesses, and ways to share and communicate like never before.  

The electric grid is similar; it is both the backbone and the facilitator upon which the future of electricity can be built. If the vision for a smarter grid is to deploy advanced energy technologies, create new business models, and transform the way electricity is produced, distributed, and consumed, then updating and modernizing existing infrastructure and building out new intelligent infrastructure need to be top priorities. But this requires money. To be sure, increased investment in grid-related infrastructure is the key component to transitioning to a smarter grid; a grid capable of supporting and integrating advanced energy technologies within a more digital grid architecture that will result in a cleaner, more modern and efficient, and reliable and secure electricity system.

The inherent challenges of deploying new technologies and resources — reliability, bidirectional flow, intermittency, visibility, and communication, to name a few, as well as emerging climate resilience concerns shaping planning today, are not insurmountable and demonstrate exactly why federal and state authorities and electricity sector stakeholders should be planning for and making appropriate investment decisions now. My organization, Alliance for Innovation and Infrastructure, will release a report Wednesday addressing these challenges facing our infrastructure, and the opportunities a distributed smart grid would provide. From upgrading traditional wires and poles and integrating smart power inverters and real-time sensors to deploying advanced communications platforms and energy analytics software, there are numerous technologies currently available and capable of being deployed that warrant investment consideration.

Making these and similar investments will help to identify and resolve reliability issues earlier, and address vulnerabilities identified in the latest power grid report card findings, which in turn will create a stronger, more flexible grid that can then support additional emerging technologies, resulting in a system better able to address integration challenges. Doing so will ease the electricity evolution in the long-term and best realize the full reliability, economic, and environmental benefits that a smarter grid can offer.  

Related News

• Electricity Forum News

• Grid Technologies News

Eastern Kings Wind Farm Expansion advances P.E.I. renewable energy with seven new wind turbines, environmental assessment, wildlife monitoring of birds and bats, and community consultation to double output to 30 MW for domestic consumption.

Key Points

A P.E.I. project adding seven turbines for 30 MW, under 17 conditions, with wildlife monitoring and community oversight.

✅ Seven new turbines, larger than existing units

✅ 17 conditions, monthly compliance reporting

✅ Two-year wildlife study for birds and bats

A proposal to expand an existing wind farm in eastern P.E.I. has been given the go-ahead, according to P.E.I.’s Department of Environment, Water and Climate Change, as related grid work like a new transmission line progresses in the region.

Minister Natalie Jameson approved the P.E.I. Energy Corporation’s Eastern Kings Wind Farm expansion project, the province announced in a release Wednesday afternoon, as Atlantic Canada advances other renewable initiatives like tidal power to diversify supply.

The project will be subject to 17 conditions, which were drawn from a review of the 80 responses the province received from the public on the proposed Eastern Kings Wind Farm expansion.

The corporation must provide a summary on the status of each condition to the department on a monthly basis.

“This decision balances the needs of people, communities, wellness and the environment,” Jameson said in the release.

“It allows this renewable energy project to proceed and reduce greenhouse [gas] emissions that cause climate change while mitigating the project’s impact to the Island’s ecosystem.”

The P.E.I. Energy Corporation wants to double the output of its Eastern Kings Wind Farm with the installation of seven wind turbines between the communities of Elmira and East Point to develop 30 megawatts of wind power for domestic consumption, according to the minister’s impact assessment, aligning with regional moves to expand wind and solar projects across Atlantic Canada.

The new turbines are expected to be larger than the existing 10 at the site, even as regional utilities study major grid changes to integrate more renewables.

Project must comply with conditions

In February, the province said it would identify any specific questions or concerns it felt needed to be addressed in the submissions, according to Greg Wilson, manager of environmental land management for the province, while some advocate for independent electricity planning to guide such decisions.

Public feedback closed in January, after an earlier extension to wait for a supplemental report on birds and bats.

The corporation needs to comply with all conditions – such as monitoring environmental impact, setting up an environmental management plan and creating a committee to address concerns – listed in the release on Wednesday, amid calls from environmental advocates to reduce biomass use in electricity generation.

A condition in the release suggests representatives from L’nuey, the Souris and Area Wildlife Branch, the Rural Municipality of Eastern Kings and local residents to make up the committee.

The corporation will also need to conduct a study over two years after construction to look at the impact on bats and birds, and implement a protocol to report deaths of birds to federal and provincial authorities.

According to Canada Energy Regulator, roughly 98 per cent of power generated on P.E.I. comes from wind farms. It also said there were 203 megawatts installed on P.E.I. as of 2018, and the majority of energy consumed on the Island comes from New Brunswick from a mix of nuclear, fossil fuels and hydroelectricity, while in Nova Scotia, the utility has increased biomass generation as part of its supply mix.

Related News

• Electricity Forum News

• Power Generation News

Texas Electricity Prices are shifting as deregulation matures, with competitive market shopping lowering residential rates, narrowing gaps with regulated areas, and EIA data showing long term declines versus national averages across most Texans.

Key Points

Texas Electricity Prices are average residential rates in deregulated and regulated markets across the state.

✅ Deregulated areas saw 17.4% residential price declines since 2006

✅ Regulated zones experienced a 5.5% increase over the same period

✅ Competitive shopping narrowed the gap; Texas averaged below US

Shopping for electricity is becoming cheaper for most Texans, according to a new study from the Texas Coalition for Affordable Power. But for those who live in an area with only one electricity provider, prices have increased in a recent 10-year period, the study says.

About 85 percent of Texans can purchase electricity from a number of providers in a deregulated marketplace, while the remaining 15 percent must buy power from a single provider, often an electric cooperative, in their area.

The report from the Texas Coalition for Affordable Power, which advocates for cities and local governments and negotiates their power contracts, pulls information from the U.S. Energy Information Administration to compare prices for Texans in the two models. Most Texans could begin choosing their electricity provider in 2002.

Buying power tends to be more expensive for Texans who live in a part of the state with a deregulated electricity market. But that gap is continuing to shrink as Texans become more willing to shop for power, even as electricity complaints have periodically risen. In 2015, the gap “was the smallest since the beginning of deregulation,” according to the report.

Between 2006 and 2015, the last year for which data is available, average residential electric prices for Texans in a competitive market decreased by 17.4 percent, while average prices increased by 5.5 percent in the regulated areas, even as the Texas power grid has periodically faced stress.

“These residential price declines are promising, and show the retail electric market is maturing,” Jay Doegey, executive director for the Texas Coalition for Affordable Power, said in a statement. “We’re encouraged by the price declines, but more progress is needed.”

The study attributes the decline to the prevalence of “low-priced individual deals” in the competitive areas, while policymakers consider market reforms to bolster reliability.

Overall, the average price of electricity in Texas (which produces and consumes the most electricity in the U.S.) — including the price in the deregulated marketplace, for the third time in four years — was below the national average in 2015.

Related News

• Electricity Forum News

• Energy Policy News

Canada Economic Crossroads highlights bank earnings trends, interest rates, loan delinquencies, EV tariffs on Chinese imports, domestic manufacturing, Algoma Steel decarbonization, sustainability, and housing market risks shaping growth, investment, consumer prices, and climate policy.

Key Points

An overview of how bank earnings, EV tariffs, and Algoma Steel's transition shape Canada's economy.

✅ Higher rates lift margins but raise delinquencies and housing risks

✅ EV tariffs aid domestic makers but pressure consumer prices

✅ Algoma invests to decarbonize, boosting efficiency and compliance

In a complex economic landscape, recent developments have brought attention to several pivotal issues affecting Canada's business sector. The Globe and Mail’s latest report delves into three major topics: the latest bank earnings, the implications of new tariffs on Chinese electric vehicles (EVs), and Algoma Steel’s strategic maneuvers. These factors collectively paint a picture of the challenges and opportunities facing Canada's economy.

Bank Earnings Reflect Economic Uncertainty

The recent financial reports from major Canadian banks have revealed a mixed picture of the nation’s economic health. As the Globe and Mail reports, earnings results show robust performances in some areas while highlighting growing concerns in others. Banks have generally posted strong quarterly results, buoyed by higher interest rates which have improved their net interest margins. This uptick is largely attributed to the central bank's monetary policies aimed at combating inflation and stabilizing the economy.

However, the positive earnings are tempered by underlying economic uncertainties. Rising loan delinquencies and a slowing housing market are areas of concern. Increased interest rates, while beneficial for banks’ margins, have also led to higher borrowing costs for consumers and businesses. This dynamic has the potential to impact overall economic growth and consumer confidence.

Tariffs on Chinese EVs: A Strategic Shift

Another significant development is the imposition of new tariffs on Chinese electric vehicles. This move is part of a broader strategy to protect domestic automotive industries and address trade imbalances, aligning with public support for tariffs in key sectors. The tariffs are expected to increase the cost of Chinese EVs in Canada, which could have several implications for the market.

On one hand, the tariffs might provide a temporary boost to Canadian and North American manufacturers by reducing competition from lower-priced Chinese imports. This protectionist measure could encourage investments in local production and innovation, mirroring tariff threats boosting support for energy projects in other sectors. However, the increased cost of Chinese EVs may also lead to higher prices for consumers, potentially slowing the adoption of electric vehicles—a critical goal in Canada’s climate strategy.

The tariffs come at a time when the Canadian government is keen on accelerating the transition to electric mobility to meet its environmental targets, even as a critical crunch in electrical supply raises questions about grid readiness. Balancing the protection of domestic industries with the broader goal of reducing emissions will be a significant challenge moving forward.

Algoma Steel’s Strategic Evolution

In the steel industry, Algoma Steel has been making headlines with its strategic initiatives aimed at transforming its operations, in a broader shift toward clean grids and industrial decarbonization. The Globe and Mail highlights Algoma Steel's efforts to modernize its production processes and shift towards more sustainable practices. This includes significant investments in technology and infrastructure to enhance production efficiency and reduce environmental impact.

Algoma's focus on reducing carbon emissions aligns with broader industry trends towards sustainability. The company’s efforts are part of a larger push within the steel sector to address climate change and meet regulatory requirements. As one of Canada’s leading steel producers, Algoma’s actions could set a precedent for the industry, showcasing how traditional manufacturing sectors can adapt to evolving environmental standards.

Implications and Future Outlook

The interplay of these developments reflects a period of significant transition for Canada's economy, shaped in part by U.S. policy where Biden is seen as better for Canada's energy sector by some analysts. For banks, the challenge will be to navigate the balance between profitability and potential risks from a changing economic environment. The new tariffs on Chinese EVs represent a strategic shift with mixed implications for the automotive market, potentially influencing both domestic production and consumer prices. Meanwhile, Algoma Steel’s push towards sustainability could serve as a model for other industries seeking to align with environmental goals.

As these issues unfold, stakeholders across sectors will need to stay informed and adaptable. For policymakers, the challenge will be to support domestic industries while fostering innovation and sustainability, including the dilemma over electricity rates and innovation they must weigh. For businesses, the focus will be on navigating financial pressures and leveraging opportunities for growth. Consumers, in turn, will face the impact of these developments in their daily lives, from the cost of borrowing to the price of electric vehicles.

In summary, Canada’s current economic landscape is characterized by a blend of financial resilience, strategic adjustments, and evolving industry practices, amid policy volatility such as a tariff threat delaying Quebec's green energy bill earlier this year. As the country navigates these crossroads, the outcomes of these developments will play a crucial role in shaping the future economic environment.

Related News

• Electricity Forum News

• Energy Policy News