Page 30 - Energize December 2022

TECHNICAL

A second tipping point will arrive when new build renewables become cheaper than highly flexible thermal capacity to
running an existing gas or coal plant, hence the loaded costs of renewables will become maintain system reliability and energy
cheaper than the marginal costs of thermal generation. This will cause retirements of storage will become a key component
thermal plants from the system ahead of their economic lifetime and speed up the in the baseload grid to maintain overall
transition. Eventually, these tipping points will lead to renewables achieving grid parity – grid balance. As the information
where they generate power at an LCOE less than or equal to price of purchasing power and knowledge surrounding power
from the electricity grid, without subsidies or government support. generation is demystified, consumers
Furthermore, inflexible capacity is being shut down and a prime example of this will begin to actively participate in the
in Australia, which is in the process of steady decarbonisation. AGL Energy Limited, system management, and power-to-gas
Australia’s leading integrated energy company is planning to replace the 1000 MW will be utilised to produce synthetic gas
Liddell coal plant with 1600 MW of renewable energy, an additional 750 MW of flexible for flexible back up and seasonal load
gas capacity and an additional 250 MW of energy storage. variations in lieu of flexible thermal
capacity.
Moving towards high penetration renewable energy systems
Global progress towards achieving a 100% renewable energy future is being made Unlocking flexibility is the key
at an incredibly rapid pace. Power providers, utilities and governments are changing Increasing flexibility in every part of
their perspectives towards inflexible generation and existing thermal capacity is being a power system is vital to achieve
replaced with renewables. This phased transformation, from the global power system high renewable integration. Flexibility
operating at zero to 20% renewables, to a stage where 80 to 100% renewable energy ensures that power systems can adapt
systems will exist, requires major changes in infrastructure, investments and innovation to fluctuations in both demand and
in technology. supply in a cost-effective manner.
In the past, due to renewables being expensive compared to fossil fuels, a large Conventional power systems were
proportion of energy was produced by inflexible plants operating on coal, natural gas focused on ensuring sufficient
and nuclear. Inflexible generation was utilised to provide both baseload power and generation capacity to meet peak
peaking generation and opportunities for storage to cost effectively address ancillary demand; however for power systems
services were limited due to the lack of development in the technology. Moreover, in with a greater share of renewables,
this 0% renewables scenario, power systems in countries were based on conventional it will be more important to have
centralised grids and consumers were passive participants. sufficient flexibility. As the usage of
Currently, the world is at 14% renewables, where flexible thermal capacity has renewables increase, variations in
begun to replace inflexible generation to enable more stable grids and renewables supply and demand will be significantly
are becoming more competitive without subsidies. Now, storage is being more widely higher due to the intermittency of
used for energy shifting and increasing intermittent load profiles are challenging the renewable energy sources, thus arises
existing business model. Soon, grid parity of renewables and energy storage will also be the need for efficient power regulation.
achieved as the feasibility of integrating them increases. Flexibility offers power regulation,
In an 80 to100% renewables scenario, there will be no role for inflexible generation which is utilised for providing additional
as renewables become the new baseload and excess renewable energy is used as raw power for balancing the system when
material for other commodities. This increase in the usage of renewables will require required and reducing power when

Figure 2: This flexible portfolio with renewables has LCOE costs of about AUS 83/MWh compared to the AUS 106/MWh of a coal plant.

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