Delta Electricity CEO Richard Wrightson says gas needed to ease green crunch
Delta Electricity has called for gas to be included in the Capacity Investment Scheme to back up renewables, as new data showed no new wind or solar project reached full output in June.
Major coal plant owner Delta Electricity has called for gas to be included in Labor’s Capacity Investment Scheme to back up renewables, as new data showed no new wind or solar project reached full output in June, despite a rise in green projects waiting to come online.
The scheme will see the government underwrite 32 gigawatts of renewable energy and storage capacity by decade’s end. However, industry players worry the exclusion of gas from the policy threatens to further destabilise the transition to a renewables-dominated power grid.
Delta chief executive Richard Wrightson – who runs the Vales Point coal plant in NSW – said the exclusion could backfire for the federal government.
“The federal government’s Capacity Investment Scheme is designed to deliver investment in its renewable energy targets, but specifically excludes funding for gas generation. This means gas generation, as the only technology available now that can solve the firming problem, is the only technology without government support,” Mr Wrightson writes in today’s The Australian.
“Without resolving the role of gas, there is a real danger that the Capacity Investment Scheme will go the way of previous energy policy initiatives.”
It follows an attack from oil and gas industry lobbyist Australian Energy Producers, which said earlier in July that the government had “no policies” to support gas investment despite the fossil fuel’s essential role in aiding the transition.
Data released by the Australian Energy Market Operator on Friday showed no renewable energy project that was in commissioning stage – the last stage of development – reached full output in June.
New developments typically ramp up testing before completing commissioning but Australia recently faced a renewable energy drought that stymied clean energy generation.
AEMO has warned the country desperately needs to develop new renewable energy sources. It estimates some 6GW of new zero-emission sources must be developed each year until 2030, but only about 3GW is currently being achieved.
Industry sources said the recent poor performance was a blow to hopes of an immediate acceleration in new renewable energy projects coming online.
However, the data showed the number of renewable energy projects being approved this year was higher than last, and the average time to complete commissioning was falling.
The statistics offer some hope that the long heralded pipeline of renewable energy projects could be materialising.
The generation and storage capacity of renewable projects working through the connection process had surged from 30GW to 43GW, AEMO said, while application approvals involving the network service provider and AEMO had increased by 74 per cent, from 6.9GW to 12GW.
“While both registration and commissioning has not changed significantly compared to last year, we are starting to see a steady increase in new package submission for registration – close to 7GW compared to 1.5GW at the same time last year,” said AEMO onboarding and connections group manager Margarida Pimentel.
Mr Wrightson said Australia excelled at installing rooftop solar, but onshore wind farms were taking too long. The energy mix was too narrow, he warned.
“If we are only building wind and solar, it will be very hard to see how the system can cope with the closure of coal. It is great that these renewable resources can produce large volumes of electricity relatively cheaply, but that energy is often produced when not needed and is often not producing enough when it is needed,” he said.
The opposition has said that if elected it will build seven nuclear power stations at the sites of retiring coal power stations, though the first will not be ready until 2037 – a timetable that many say is already overly ambitious.
Mr Wrightson said Australia had an urgent problem and it could not wait 15-20 years to solve it.
“We need solutions to storage and firming capacity now, not in 15-20 years, and the simple reality is that nuclear power, regardless of the ideological debate, just won’t be built in time, given the age of our coal assets,” he said.
He said Australia was doing well in installing batteries, but they would be insufficient in prolonged renewable energy droughts with little sunlight and wind for several days.
Australia’s most viable long-duration project – Snowy Hydro 2.0 – is still years from completion and the cessation of drilling by one of the tunnel boring machines could cause more delays.
Still, Australia continues to push ahead with shorter duration batteries as market pricing accelerates their production.
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