Renewable Resourceful Victoria The renewable energy potential of ...

Renewable Resourceful Victoria The renewable energy potential of Victoria PART 1 – ANALYSIS & DISCUSSION

February 2010

CONTENTS 1. Executive summary

1

2. Introduction

5



2.1. 2.2. 2.3. 2.4. 2.5. 2.6.

General How we undertook our resource assessments Raw energy Theoretical energy potential Allocating our land – the useable renewable energy potential Practical resource potentials

5 6 8 9 10 15

3. Victorian energy consumption and population

17



17 17 20 21 21 22

3.1. 3.2. 3.3. 3.4. 3.5. 3.6.

Introduction Energy consumption Victoria’s population Per capita consumption What happens if we change our energy consumption rate in future? What forms of energy do we consume?

4. Renewable energy resources

23



23 23 26 28 29 30 32 34 36 37

4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7. 4.8. 4.9. 4.10.

Introduction Wind energy Solar energy Hydroelectricity Bio-energy and bio-fuels Geothermal energy Wave and tidal energy Total renewable energy potential and energy consumption amounts Per capita renewable potential and consumption Location of the resources

5. So what does it say and mean?

40



40 40



5.1. The answer 5.2. Reality check 5.2.1. What would this amount of renewable energy look like in Victoria?

40



5.2.2. How do we deal with intermittent renewable energy supply?

42



5.2.3. How do we connect the resource to the electricity grid?

44

5.3. Transport fuels – how might they change in future?

46

6. Pathways

48

Appendix A | Energy units

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PART 1 – ANALYSIS & DISCUSSION

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ExECuTIVE SummARy

Could 100% of Victoria’s energy needs be met by renewable sources at some time in the future? This is the question the Department of Primary Industries of Victoria asked us, Sinclair Knight Merz, to find an answer for. In this report, we assessed: • Victoria’s “raw” renewable energy resource from sources like the wind, hydroelectricity, geothermal energy, solar energy, biomass, waves and tidal energy; • What this resource would amount to after conversion to energy in forms we would use (electricity, fuels etc). This is Victoria’s “theoretical” renewable energy resource; and • Since this theoretical amount would wholly use up our land, and is therefore implausible, what this resource would amount to after taking into consideration conflicts in land use. This would be Victoria’s “useable” renewable energy resources. This useable renewable energy resource quantity was then compared with Victoria’s annual energy consumption levels – today and in the period to around 2030 – to answer our question. Our findings show that Victoria has more than sufficient useable renewable resources, both on an absolute basis and on an “energy use per person” basis, to conceivably meet all our energy needs from renewable sources. Figure 1 shows the comparison between useable renewable energy resources and consumption levels now and projected in 2030.

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1 | EXECUTIVE SUMMARY

fIGURE 1 | Useable renewable energy resources and energy consumption in Victoria 9,000 

Renew wable potentiaal & final energgy consumptio on, PJ/y

8,000 8,000 

7,000 

6,000 

Solar Tidal W Wave

5,000 

Biomass Hydro

4,000 

Geothermal Wind

3,000 

2,000 

1,000  ,

‐ Usable

Consumption (2006)

Consumption (2031)

However these findings are far from providing a complete story. The useable resource that has been calculated is the maximum extractable energy and importantly, excludes consideration of economic, social and environmental constraints that apply in reality. It also ignores current regulatory constraints on developments. If these constraints had been applied, then a lesser amount of renewable energy would have been assessed, which we would label the “practical” renewable energy amounts. Assessing the practical renewable energy resource requires knowledge of the trade-offs that the community might wish to make between economic, environmental and social objectives. Not all the knowledge needed to assess these trade-offs is available today. Relevant information could include the future costs of renewable energy, the future costs of other energy technologies, and the outcomes of further developments of renewable energy technologies and non-renewable, low-emission technologies.

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1 | EXECUTIVE SUMMARY

It is evident from Figure 1 that wind and solar energy resource potentials make up the bulk of the useable energy amounts. Accepting very high levels of either or both of these technologies would require: • Acceptance of the cost of these technologies relative to alternative sources (economic trade-offs), • Acceptance of the environmental impacts of these technologies, such as the impacts upon flora and fauna, relative to the impacts of alternatives, and • Acceptance of the social impacts such as visual impacts and changed employment patterns relative to alternatives. These impacts are significant. For example to completely serve Victoria’s energy needs with wind would require approximately 100,000 wind turbines – roughly the same as the combined number of installed turbines in the world today. To completely serve our needs with solar energy would require 2,000 large solar farms to be built covering 2% of Victoria’s land area. There are also some technical constraints that don’t preclude these technologies making a significant contribution, but would need to be addressed if these technologies were to fully satisfy our energy needs. Principally, since both wind and solar energy sources are “intermittent” sources rather than steady, continuous resources, the question of matching the energy demand with the intermittent supply sources, such as with energy storage technologies, would need to be addressed at some time. This requires some further technological development. There are other factors that also have to be addressed in due course, such as the arrangement of the electricity transmission system to carry the energy from the resource locations to our consumption locations. In this case the technology already exists but economic, environmental and social tradeoffs would need to be evaluated and accepted before constructing the new transmission system. This is best illustrated by considering Figure 2 which shows the areas of Victoria with the greatest useable renewable energy potential. The renewable resources shown in Figure 2 reflect all the resource types considered, but are dominated by wind and solar resources. The areas with the greatest resources tend to be in the east and west of the State rather than near the main consumption centres in the Melbourne/Geelong area.

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1 | EXECUTIVE SUMMARY

fIGURE 2 | Locations of greatest renewable energy potential Renewable Energy Potential for Victoria | LGA Administrative boundaries & Coastal Zones Renewable Energy Potential Per LGA Boundary & Coastal Zone

Because of the extent of Victoria’s renewable energy resource, Victoria can dream of a future where all its energy needs are met by renewable energy sources. However an immediate commitment to follow a complete renewable energy pathway would almost certainly require an economic commitment of such a significant scale that it would impact on the achievement of many other of society’s economic needs and goals. There would also be social and environmental impacts from developments of wind and solar facilities on this scale. Evaluation of any major pathway decision such as a major project involves determining what the trade-offs are and whether the community wants to, or should, accept them. How much renewable energy we might choose to adopt will also be determined as technologies develop and costs change, such that in future we do not have to make the same trade-offs as we would face today. It would also depend upon how we might use non-renewable options to achieve our goals (such as carbon capture and storage, and greater use of natural gas).

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1 | EXECUTIVE SUMMARY

2

INTRODuCTION 2.1.

General

Sinclair Knight Merz Pty Ltd (SKM – look us up at http://www.skmconsulting.com) has been engaged by the Victorian Department of Primary Industries (DPI) to undertake a review of the renewable energy resource potential of Victoria. This review examined the potential contribution of Victorian renewable energy resources to meeting the State’s energy consumption, which will inform the development of a Future Energy Statement by the Victorian Government. The renewable energy sources considered were: • Onshore wind, • Solar, • Hydroelectricity, • Bio-energy, • Geothermal, • Wave, and • Tidal energy sources. SKM’s knowledge of renewable energy technologies has been applied to estimate the amounts of each relevant renewable energy resource in Victoria. Production potentials of renewable energy sources are then compared with stationary and transport energy consumption rates for the State. Although the important limiting constraints of economic, environmental, social and regulatory parameters are excluded from our resource assessments, the data is presented in a practical fashion that is not intended to be distorted towards optimism or pessimism when viewing renewable energy potential. Since these factors are excluded, the calculated renewable energy resource levels should be considered maximum values. This also means that the analysis does not indicate the amounts of particular technologies making up programs such as the expanded Renewable Energy Target (RET) scheme, or the impact of the Carbon Pollution Reduction Scheme (CPRS), which is the proposed Australian emissions trading scheme.

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2 | INTRODUCTION

This report is presented in two parts: Part 1

Presents analysis and discussion on the renewable energy potential, and

Part 2

Presents detailed data on each renewable energy technology that forms the basis for the analysis and discussion in Part 1. Readers seeking more information should refer to Part 2.

For readers not familiar with the units used in energy analyses, a brief introduction is provided in Appendix A. To summarise the objective of this review, it effectively addresses the question:

COulD 100% Of VICTORIA’S ENERGy NEEDS bE mET by RENEwAblE SOuRCES AT SOmE TImE IN ThE fuTuRE?

2.2.

How we undertook our resource assessments

SKM has noted the book commended by DPI as a rough guide to the style and treatment of the resource assessments, “Sustainable Energy – without the hot air” by David Mackay1. We have undertaken a similar exercise to that undertaken for the U.K. by David Mackay2. Our review is restricted to renewable energy with application to the Victorian context. Differences in style of calculation of resource extents and the manner of making assumptions surrounding the resource extents also reflect the different data available and the different scope limitations (economic, environmental and social limitations being excluded from this review for example). We used publicly available data for Victorian resource potentials where this data was available, and made rough estimates using our judgement to fill in the gaps as necessary (for example for less developed technologies). SKM acknowledges the contribution of Sustainability Victoria in providing raw data on many renewable energy resources for the State.

David JC MacKay FRS Professor of Natural Philosophy, Department of Physics, University of Cambridge. Published by UIT December 2008. Available at http://withouthotair.com/

1

There are several other reviews in various jurisdictions around the world that similarly consider local renewable energy resources. For example in Victoria assessments were made by the former State Electricity Commission of Victoria in the 1980’s and a review was undertaken by Redding Energy Management in 1999. There are similar reviews elsewhere, such as a report by Synapse Energy Economics on “Energy Future: A green energy alternative for Michigan” available at http://docs.nrdc.org/energy/ene_09081101.asp

2

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2 | INTRODUCTION

Figure 3 illustrates the process involved in making the calculations and shows the way we have categorised the various resources as “raw”, “theoretical”, “useable” and “practical” energy quantities in this review. fIGURE 3 | Calculation of theoretical, useable and practical resource potentials          

 

  Raw  Resource 

  Conversion  process

Useable  electricity

Theoretical  electricity  In unsuitable areas 

Practical  electricity 

Not viable on  economic,  environmental,  social or regulatory  grounds 

As shown in Figure 3, any particular renewable energy resource has a raw energy potential – for example the sun’s solar energy falling on each square metre of Victoria’s land area. This amount of raw energy over the whole State could be converted into a lesser amount of electrical energy in rooftop photovoltaic (PV) panels or solar power stations. Some solar energy could also be converted into solar hot water. In this review most energy to be used is calculated based on conversion to electrical energy. Specific allowances have been made for direct heat applications such as solar hot water, geothermal hot water and biomass used for heating. In general, conversion processes produce less useful energy than the raw energy that is input. SKM’s calculations estimated the conversion efficiencies for each technology and resource considered. The resulting calculated energy is called “theoretical” electricity or “theoretical” energy. We cannot consider this as a credible amount of energy that is potentially available for our use – now or at any foreseeable time in the future.

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2 | INTRODUCTION

Theoretical energy quantities do not provide us with answers for what actually is possible because it is not conceivable to remove all other activities (farms, parks, houses, businesses etc) from the State to dedicate the whole of the State to energy production. There is only a small amount of the State’s land area potentially available for renewable energy utilisation over the time horizon that this review considers (to about 2030). After the unsuitable land area is removed from consideration, the amount of energy remaining is called “useable” energy in our evaluation. This is discussed further in Section 2.5 below. Then, at any point in time and location, a set of additional constraints apply to a particular renewable resource being developed at that time and place. These are economic, environmental, social and regulatory constraints as discussed in Section 2.6. After allowing for these, the amount of useable electricity remaining is called “practical” energy or electricity. This review specifically excluded consideration of these economic, environmental, social and regulatory constraints. Since these may change over time, we cannot say what preferences and trade-offs would be expressed by the community in (say) 20 years’ time. Therefore we focussed on estimating the “useable” energy available from Victoria’s renewable energy resources. 2.3.

Raw energy

Data on raw energy amounts for most renewable energy resources are available. For example Sustainability Victoria3 has data applicable to Victoria and this has been applied in the review for each of: • Wind, • Geothermal, • Wave, and • Tidal energy data. The Bureau of Meteorology has data on solar energy quantities for Victoria. Data on biomass resources can be estimated based on Victoria’s agricultural statistics and population levels.

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See http://www.sustainability.vic.gov.au/

PART 1 – ANALYSIS & DISCUSSION

2 | INTRODUCTION

2.4.

Theoretical energy potential

The calculation of theoretical energy levels considers the various processes that can convert the raw energy present in Victoria into the forms of energy that we use, or could use in future. The theoretical production potential is the maximum unconstrained energy production. For example, MacKay in his initial calculation for wind in Britain calculates the wind generation if the entirety of Britain were covered with wind turbines. Although not to be taken as a practical or realistic goal, this parameter is an upper bound used as the starting point for subsequent calculations. Reasonable data is available on actual wind speeds in Victoria (rather than a state-wide average). Similarly, geothermal, hydro and solar technologies (and to a large extent biomass) allow reasonable estimates of the energy potentials to be calculated across the State. Our calculations considered the current production potential of the following renewable energy sources: • Onshore wind, • Solar power – small and large scale (including solar thermal and photovoltaic), • Hydroelectricity, • Bio-energy and bio-fuels, • Geothermal including geothermal heat pumps, and • Wave and tidal sources. Offshore wind potential was not included. Water depth in Bass Strait increases quickly to around 50 metres relatively close to the Victorian coast. Although the depth does not increase greatly beyond this depth (typically 50 to 80 metres), this is beyond the current commercial depth of offshore wind turbines employed internationally (typically less than 20 metres at present. Deeper water turbines and floating turbines are actively being considered for future application). If offshore wind energy were included, then doubtless this would increase the available energy quantities beyond those calculated here. In determining the potential energy resource available, SKM utilised industry proven modelling tools, in-house databases, and project specific engineering experience in evaluating the technologies and the available energy. We have focussed on currently available technologies rather than relying on the success of future technology research and development.

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2 | INTRODUCTION

The actual resource data applicable for Victoria has been considered in the analysis. For example the geothermal temperatures likely to be used have an impact on the energy conversion efficiency in any power station that would use the resource. These conversion rates in Victoria are different from those that apply in other geothermal projects in places with different resources, such as New Zealand or the Philippines. 2.5.

Allocating our land – the useable renewable energy potential

A convenient dissection of Victoria into geographical areas is to consider Local Government Areas (LGA). There are 77 Local Government Areas covering Victoria that are used in the analysis where possible. These are shown in Figure 4. Local Government Areas are obviously not useful when considering wave and tidal energy so for these technologies the Victorian coastline is divided into ten segments of roughly equal extent, which are also shown on Figure 4. For these offshore technologies an arbitrary limit on distance from the coast (of 10km) has been applied4.

This does not preclude developments further offshore but any that arose would not be expected before the inshore opportunities had been fully developed and hence developments beyond the 10km distance are not expected to be material in the nominal timeframe of the review (to 2030).

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2 | INTRODUCTION

fIGURE 4 | Victorian Local Government Areas and offshore zones Renewable Energy Potential for Victoria | LGA Administrative boundaries & Coastal Zones

LGA Administrative boundaries & Coastal Zones

How should we decide how much of Victoria could conceivably be allocated to renewable energy production, without factoring in economic, environmental or social values and without considering existing regulatory constraints? First, urban solar energy usage (photovoltaics (PV) and solar hot water units) are typically located on north facing roofs and do not compete with any other land usages. These energy sources are only limited by the number and extent of buildings. We can calculate and include these quantities separately by reference to dwelling numbers without worrying about whether the roof-space has other uses. Geothermal energy extraction is largely an underground activity and can take place without significant surface disruption in many cases. There are some surface facilities required and some impacts so we have excluded nature conservation areas and urban areas (except for the fringes where the surface facilities (the power station) can be positioned just outside the sensitive area yet the underground energy collection can extend beneath the edge of the conservation area or town).

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2 | INTRODUCTION

Wind energy can be utilised within urban areas however the amount of urban wind energy potential is only a tiny fraction of the wind energy that can be produced by rural wind farms. Hence the estimate of Victoria’s wind energy potential concentrates on the non-urban type of facility. These large wind farms must be sited considering land use issues. Wind turbines can co-exist with many forms of agriculture but they are technically unsuitable for forested areas and we assume urban areas and conservation areas cannot accept wind farms of the type considered. Large scale solar facilities completely use the land they occupy to the exclusion of other activities. They also require flat land for technical reasons. It is not considered credible to consider large solar power plants in urban areas, forests or conservation areas. To estimate the percentage of the State’s 210 billion square metres area that can be used by renewable technologies, without looking at each plot of land individually, we need to make some assumptions and assertions. As shown in Figure 5 and Figure 6, broad areas of current land use can be identified for Victoria. fIGURE 5 | Victorian land use Renewable Energy Potential for Victoria | Land Use Land use

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PART 1 – ANALYSIS & DISCUSSION

2 | INTRODUCTION

fIGURE 6 | Land-use in Victoria, square kilometres Forestry,  36,138 , 16%

Dryland agriculture,  65,034 ,  30%

Livestock grazing,  64,579 ,  29%

Irrigated agriculture,  6,147 ,  3% Built environment,  4,426 , 2% Waterbodies (not elsewhere  classified),  802 , 0%

Minimal use,  8,373 , 4%

No data,  287 , 0% Other protected areas (incl  indigenous areas),  1,073 , 1%

Nature conservation,  33,707 ,  15%

Not indicated,  544 , 0%

Our estimates of useable renewable energy potential were based on this land use allocation. Land-use may change over time in response to the community’s needs and values. This does not significantly affect the analysis because the rate of change is likely to be slow. Hydro, bioenergy, wave and tidal energy potentials were calculated without needing to consider land area allocation and so do not need the same form of discussion as wind, non-urban solar and geothermal useable energy calculations. The reasons for the individual methods applied are described in Section 4. For wind, non-urban solar and geothermal sectors the useable area breakdown applied is shown in Table 1.

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PART 1 – ANALYSIS & DISCUSSION

2 | INTRODUCTION

Nature conservation

Other protected areas (incl indigenous areas)

Minimal use

Livestock grazing

Forestry

Dryland agriculture

Irrigated agriculture

Built environment

Waterbodies (not elsewhere classified)

Totals (square km)5

0%

0%

0%

0%

85%

50%

00%

50%

50%

0%

0%

74,997 (34%)

Solar

0%

0%

0%

0%

85%

0%

0%

15%

0%

0%

0%

16,872 (8%)

Geothermal

0%

0%

10%

10%

100%

85%

85%

85%

85%

10%

0%

158,407 (72%)

544

33,707

1,073

8,373

64,579

36,138

65,034

6,147

4,426

Totals (sq. km)

802

Not indicated

Wind

287

No data

TAbLE 1 | Landuse areas assumed to be “useable”

221,100

These areas represent the maximum proportion of the area of each existing land use type assumed in each of Victoria’s Local Government Areas that can be employed by each renewable energy technology. In asserting that these percentages of the State’s area are potentially “useable” for renewable energy production we are already unavoidably starting to make assumptions and judgements about some value trade-offs. Some particular issues to note are: •

The assertion that 15% of land that is presently used for dryland agriculture can be used for solar energy production implies that the dryland agricultural use is (or may be in the future) of lesser economic value than the solar energy activity. We did not assume any land presently used for livestock grazing would be used for solar energy. This reflects very broad assumptions regarding the flatness of land, as is required for solar farms. Undoubtedly, if a study was made of every plot of land in Victoria, some of the included dryland agricultural land would be unsuitable for solar and some of the excluded livestock grazing land would be suitable;

5

5

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Note there is overlap in the areas applied for some technology uses.

PART 1 – ANALYSIS & DISCUSSION

2 | INTRODUCTION

• The intrusion of wind and geothermal plants on the other land uses noted are less than indicated by the percentages in the table, since either technology can operate with relatively minimal use of the land – in the case of wind because other activities can exist around the bases of the towers and in the case of geothermal because the surface facilities are small compared with the extent of the underground resource used; • The “minimal use” area is assumed to allow a high penetration of renewable energy development. This assumption was on the grounds that it doesn’t compete with any other economic or conservation use. Since approximately 75% of the land in this category is remnant native cover on private land, it may have high environmental or social value (both of which were excluded from consideration) or may be unsuitable for particular renewable developments – for example gullies and hills that are not suitable for solar development. This category only comprises 4% of the State’s area and hence this was not considered a high risk to the analysis. Applying this categorisation of areas, the resulting areas of the State considered useable for each of these technologies were6: • Wind

34%,

• Non-urban solar

8%, and

• Geothermal

74%.

2.6.

Practical resource potentials

In the real world all of the useable production potential cannot possibly be extracted. Constraints could include: • Economic constraints: The cost of some technologies, when applied in some or all geographic locations and in a real market environment, may not meet acceptable investment objectives. Alternatively the community may not want to pay the cost of some renewable energy project options compared to other energy sources it has access to, after evaluating all the tradeoffs involved; • Environmental restrictions: Specific areas may be unsuitable for wind farms and development of biomass resources or other technologies on environmental grounds such as odour or impacts on flora and fauna;

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Part 2 includes further information on the derivation of these percentages.

PART 1 – ANALYSIS & DISCUSSION

2 | INTRODUCTION

• Social restrictions: Unrestricted development of wind farms may be unacceptable to the community because of loss of amenity; • Regulatory restrictions: Planning constraints may apply on the location of future wind farms; The actual extent of renewable development at any point in time will be a balance of these factors. Taking the economics of wind power development as an example, it is generally the case that the most economic projects are developed first (subject to environmental and social constraints). Ongoing wind generation development would thus be based on sites with poorer economic factors than earlier development sites have, especially in the form of reduced average wind speeds and more costly electricity connections. Development generally cannot continue past the extent at which the cost of production exceeds the value of the electricity produced and this typically sets the maximum practical scale of resource usage at less than the useable amount. All renewable energy forms (and many non-renewable energy forms as well) tend to have this characteristic. A detailed examination of these factors is outside the scope of this review, and is not included in our resource assessments.

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VICTORIAN ENERGy CONSumPTION AND POPulATION 3.1.

Introduction

Before considering whether Victoria’s renewable energy resources can supply the State’s energy needs, we must know firstly how large these energy needs are. We looked at the period from the present to around 2030. Energy consumption projections have been made using projections from the Australian Bureau of Agricultural and Resource Economics (ABARE). In order to estimate per capita consumption rates, a projection of population levels is required. This has been estimated by projecting population growth from census data. 3.2.

Energy consumption

Energy consumption projections are based on ABARE data. ABARE made its latest projections for energy consumption in Australia in 2007. The analysis by ABARE would have factored in energy usage and efficiency expectations and programs known at the time. ABARE’s projections are shown in Table 2 and Figure 7. TAbLE 2 | Victorian energy consumption projection from 2009 to 2030, PJ/year7

LPG

2009-10

2014-15

2019-20

2024-25

2029-30

48

55

63

74

86

Other petroleum products

395

407

416

426

436

Natural gas

203

222

237

255

274

Electricity

231

257

282

308

333

Biomass

27

28

29

30

30

Solar energy

0.2

0.2

0.2

0.2

0.3

Total

906

969

1028

1092

1160

Data is from ABARE, “Australian energy national and state projections to 2029-30”, ABARE research report 07. 24, December 2007, Table C2 – Final energy consumption in Australia by state by fuel, page 68

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3 | VICTORIAN ENERgY CONSUMPTION AND POPULATION

Note that the data presented here is secondary (or final) energy consumption. The alternative measure (and the one commonly used for many international comparisons) is primary energy consumption. If our data were presented as primary energy consumption there would be no “electricity” consumption line in Table 2 – instead there would be allowances for the fuels (mainly brown coal, plus some natural gas and hydro energy) used to make the electricity. In considering whether renewable energy can supply Victoria’s energy needs, it is the secondary consumption of energy that is important since we would not logically use renewable energy to make brown coal to make electricity – we would just use renewable energy sources to make the electricity that we want to use! fIGURE 7 | Victorian energy consumption projection (AbARE data) 1,400

Victorian n final energy consumption, PJ

1,200

1,000

800

Solar energy Biomass

600

Electricity Natural gas

400

Other petroleum products LPG

200

0

In Figure 7, “Other petroleum products” largely comprises the petrol and distillate used in vehicles. This is the largest component of usage and in this projection was expected to remain the biggest component through the period to 2030. Existing solar energy usage is too small (0.2PJ/year) to be visible in Figure 7. This is mostly solar hot water. Biomass energy usage shown is non-trivial and is primarily for heating use.

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3 | VICTORIAN ENERgY CONSUMPTION AND POPULATION

Victoria also uses significant amounts of LPG energy. Two-thirds of Victoria’s LPG usage is used by transport with the balance used across the residential and industrial sectors. The balance of the LPG energy consumption is for “stationary” energy purposes such as usage in our homes and workplaces. Figure 7 shows a consistent trend of increasing energy consumption over the period to 2030. Addressing the question of whether we can satisfy Victoria’s energy needs using renewable energy sources required consideration of whether the energy consumption rates will also change with time. In this analysis, the 2030 consumption quantity shown was the highest consumption rate considered. The ways and forms in which we use energy were also relevant to the evaluation because at the present time most of our vehicles use liquid fuels and our homes and businesses use a combination of energy sources such as electricity and natural gas. As shown in Figure 8, the road transport sector accounts for 33% of Victoria’s energy consumption. Industry is the next largest sector for consumption – many energy intensive industries have located in Victoria due to the extensive low-cost brown coal and natural gas resources, which have underpinned Victorian development for many decades. Our residences use 20% of the energy used in Victoria. The commercial sector and “other” – which includes things like agriculture and mining – are more modest consumers at around 10% each. fIGURE 8 | Victorian fuel energy usage breakdown by sector in 2006-07 (AbARE data)

Other 10% Industry 28%

Road transport 33%

Residential 20% Commercial 9%

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3 | VICTORIAN ENERgY CONSUMPTION AND POPULATION

If consumption is broken down into broad areas as shown in Figure 9 it can be seen that overall transportation usage, including all of road, rail, air and marine transport, dominates. Overall transportation usage comprises almost half of all consumption. Electricity and heating fuels (predominantly the natural gas, biomass and a portion of the LPG usage) each comprise similar portions of the other half of the consumption. fIGURE 9 | Victorian fuels usage in 2006-07 – Energy usage type (AbARE data)

Electricityy 25%

Transport fuels 48%

Heating fuels 27%

Notwithstanding that we presently use energy in a variety of forms, in undertaking the analysis of renewable energy potential, we have (with only a few exceptions) focussed on conversion of the raw renewable energy quantities into theoretical energy in electrical energy form. This treatment is discussed in Section 3.6. 3.3.

Victoria’s population

Victoria’s population between the 1981 census and the 2006 census increased from 3.8 million to 4.9 million. The rate of growth in the last census period was 1.14% per year. If this growth rate is extrapolated, Victoria’s population will increase to approximately 6.5 million by 2030, as shown in Figure 10.

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3 | VICTORIAN ENERgY CONSUMPTION AND POPULATION

fIGURE 10 | Victorian population – historic census data and projection 7,000,000 

6,000,000 

Vicctoria's populaation

5,000,000 

4 000 000 4,000,000 

3,000,000 

2,000,000 

1,000,000 

‐ 1980

3.4.

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

Per capita consumption

Using the energy consumption and population projections discussed above, consumptions per person can be calculated as shown in Table 3. TAbLE 3 | Energy consumption per person calculated over the period 2006 to 2030 2006

2011

2016

2021

2026

2031

Consumption, PJ

862

932

992

1053

1119

1175

Total population, M

4.9

5.2

5.5

5.8

6.2

6.5

GJ/person

175

179

180

181

181

180

It can be seen that on this projection that per capita consumption should be relatively constant. 3.5.

What happens if we change our energy consumption rate in future?

Obviously if we use more or less energy in the future, the amount of renewable energy that needs to be utilised to provide a match for consumption also changes. The per-capita consumptions described in Section 3.4 above are shown to be slightly higher in the future than the current levels.

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3 | VICTORIAN ENERgY CONSUMPTION AND POPULATION

Given the attention that is paid to energy conservation in the community, and also considering the economic factor that higher energy prices (as might be expected in future) should tend to reduce energy consumption, and also that our economy is trending more to service industries over time (which use less energy than heavy industries), we might reasonably anticipate that per capita consumption is more likely to fall than rise. If this is the case, then errors in the projections of consumption or population growth relative to today are not likely to change any conclusions we might draw since we consider both the current consumption levels and the higher projections of consumption levels for 2030 in this analysis. If instead of reducing, our consumption of energy per person rises in the future, then this will not alter the conclusions of this study. Obviously more extensive renewable energy developments would then be required to fully supply our energy needs in this case. 3.6.

What forms of energy do we consume?

Up to this stage, and in the remainder of this review, we treat all energy forms and usages as the same and we just add up the quantities of the resources and consumption in Petajoules (PJ) or Gigawatt-hours (GWh) as if the energy were all electrical energy. All energy forms are not equivalent however and we should touch upon this and justify our treatment. Making the calculations (with only a few exceptions) in electrical energy form is a reasonable basis because: • There are very few applications where electrical energy cannot be applied. Where electrical energy cannot be directly used it can normally be converted to another energy form (such as heat energy) without large amounts of additional energy loss; • For those stationary applications where other energy forms such as natural gas energy are presently used, undertaking the calculations on the basis of electrical energy will generally be conservative in this analysis; and •

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Transport applications mostly use liquid fuels at present. It may be the case in future that electric vehicles could become our dominant mode of transport, or that we can run vehicles on hydrogen produced from electricity (from renewable energy sources), or that the use of biofuels (like ethanol or biodiesel) will increase. The differences in the overall efficiency in transport energy usage from the energy source “to the wheels” between the different alternatives are not so great as to change the conclusions of this review. Further discussion on this is included in Part 2.

PART 1 – ANALYSIS & DISCUSSION

3 | VICTORIAN ENERgY CONSUMPTION AND POPULATION

4

RENEwAblE ENERGy RESOuRCES 4.1. Introduction In this Section, we consider the potential theoretical and useable quantities available for each renewable energy source. Further details on each resource and the relevant energy conversion processes are provided in Part 2. 4.2. Wind energy People have employed wind energy to assist with pumping water, grinding grain and propelling sailing ships for thousands of years. In the last hundred years, wind energy has been additionally used to generate electricity. In the now common modern wind turbine, the wind pushes a set of turbine blades, which turns a shaft and gearbox which turns an electric generator. The amount of wind energy available depends on the speed of the wind. The amount of energy that can be provided over a year depends on the wind speed at each moment of the year at the site of the wind turbine. This amount can be related to the average wind speed for the site over the year. Figure 11 shows the average wind speed for regions within Victoria.

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fIGURE 11 | Victorian wind resource Renewable Energy Potential for Victoria | Average Yearly Wind Speed Average Yearly Wind Speed at 65m above ground

The average wind speed across the whole state (at 65 metres height, which is close to the hub height of modern wind turbines) is 6.5m/s. There are considerable areas of the State with greater average wind speeds however, and sites over 8m/s average wind speed are considered very attractive. The amount of energy that can be provided by the wind can be most readily described with examples. More detail is provided in Part 2 for the interested reader. Take for example, a typical modern turbine with an 80 metre diameter rotor. When the wind is blowing strongly the turbine might produce its maximum output of typically 2MW. The variations of wind speed over time however mean that the average electricity output will be lower. At 6.5m/s average wind speed, a wind turbine would typically average an output of 365kW and thus produce 3200MWh/year (or 11,500GJ/year). At 8m/s average wind speed a wind turbine would typically produce an average of 680kW (6000MWh/year, or 21,600GJ/year), or nearly 90% extra energy compared to the lower average wind speed site.

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4 | RENEwAbLE ENERgY RESOURCES

Wind turbines generally must be spaced apart by about five rotor diameters. This would mean turbines spaced every 400 metres, or one turbine per 160,000 square metres in our example above. Considering that the total area of Victoria is 210 billion square metres, on a completely theoretical basis Victoria could have 1.3 million wind turbines and produce over 15,000PJ of energy per year. Applying the discussion in Section 2.5 concerning land allocation and useable energy, and calculating the useable energy within each Local Government Area in the State, we find that the useable energy is 5,600PJ/year. The top 30 Local Government Areas for useable wind potential in Victoria are shown in Figure 12. fIGURE 12 | Victorian useable wind energy (PJ/year), top 30 LGA’s 400

350

Useable energy, PJ/year

300

250

200

150

100

50

0

Coastal areas, particularly those in the west of Victoria, have the highest useable wind energy potential per square metre of area (as shown in Figure 11), followed by the inland areas in the west. Based on useable wind energy potential within each Local Government Area, the north west of Victoria is calculated to have the highest potential due to the large amounts of useable area in these Local Government Areas.

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4.3.

Solar energy

There are several ways of usefully applying the energy in the sun’s radiation for our energy needs. These include the now familiar use of solar hot water heaters for our domestic and commercial hot water services and rooftop photovoltaic (PV) panels which provide some of our electricity needs. Not yet commercially applied in Australia, but under active consideration at present, are largescale solar power generating plants based on large arrays of solar panels or a set of technologies known as solar thermal power. Solar thermal power is based on large “farms” of solar collectors or mirrors which gather the sun’s heat from a large ground area to heat steam or special fluids. These hot fluids are then used to generate electricity in a power station using relatively conventional technologies. Several types of these solar thermal power plant arrangements exist, but they are not so different as to require separate treatment in this analysis. Refer to the Part 2 report for further information. The solar resource map in Figure 13 shows that Victoria has good solar energy resources relative to the developed world, particularly in the north west. Other areas of Australia have even higher levels of solar energy. fIGURE 13 | Victorian solar resource Renewable Energy Potential for Victoria | Annual Solar Exposure

Annual Solar Exposure

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4 | RENEwAbLE ENERgY RESOURCES

In a large solar power plant, raw solar energy can be converted to electrical energy at an overall “efficiency” factor of 2.2%. This factor allows for all of the following (refer Part 2): • Beam versus direct radiation amounts, • The collector efficiency, • The efficiency of the power generation process, and • The coverage of the collector area relative to the site area and the site area relative to the area of the overall locality. The theoretical amount of solar energy converted to electricity, based on the sun’s energy falling on the whole State, is 32,700PJ/year. Useable solar energy calculated considering the land area discussion in Section 2.5 is 2,500PJ/year. We have calculated urban solar energy potential separately. Relative to non-urban solar resources, these urban resources are smaller but add 22PJ/year of solar hot water and 11PJ/year of urban PV. Considering the resources within each Local Government Area in Victoria, the areas with the highest useable solar energy resources are shown in Figure 14. The relative sizes of Local Government Areas (East Gippsland for example), and their land-use, influences the individual sizes of the bars presented in Figure 14 though the dominance of areas in the north-west of the State shown in Figure 13 is also evident in Figure 14.

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PART 1 – ANALYSIS & DISCUSSION

4 | RENEwAbLE ENERgY RESOURCES

fIGURE 14 | Victorian useable solar energy (PJ/year), top 30 LGA’s 180 160

Useable energy, PJ/year

140 120 100 80 60 40 20 0

4.4.

Hydroelectricity

Much of Victoria’s hydro electricity potential is considered to have already been developed. Currently, hydroelectricity makes up approximately half of all Victoria’s renewable electricity production at a long-term average of approximately 725GWh/year, or 2.6PJ/year. Victoria’s oldest hydro plant still operating is the Rubicon/Royston system dating back to the 1920s. The newest is the Bogong Power station of 140MW, which has recently been commissioned. The theoretical resource has been estimated to be about 54 PJ/year. Useable hydro electricity resources in Victoria have been estimated somewhat differently to the wind, solar and geothermal resources. Hydro projects are entirely specific to each location and there is no generalised calculation considered appropriate. Drawing on analyses undertaken by the former State Electricity Commission of Victoria in the 1980’s as reported and updated in 1999 in the “Redding Report”8, it was estimated that the useable resource is 3.4 PJ/year.

8

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Redding Energy Management report for Energy Efficiency Victoria, “Opportunities for green power generation in Victoria”, 1999

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4 | RENEwAbLE ENERgY RESOURCES

4.5.

Bio-energy and bio-fuels

Bioenergy is also a renewable energy source in current use in Victoria. Presently around 27PJ/ year of bioenergy is used, largely as wood and woodwaste in the pulp and paper industry and in residential fireplaces9. The sources of bioenergy in Victoria are numerous and include: • Crops and forests, and the residues from cropping and forestry, • Animal waste and abbatoir waste, • Sewage, and • Municipal solid waste (garbage). In considering crops and forests as potential fuels, we needed to decide whether it is reasonable to include those crops and forests that are already serving some economic or environmental purpose. It is not reasonable to divert all our food crops to instead be used for electricity generation even if we then assumed we would import our food needs from elsewhere – this would be false accounting (it would be the same to just assume we could import our energy needs from elsewhere). Likewise our forests are already providing value elsewhere as commercial forestry (eg for pulp and paper production, construction, furniture etc) or for environmental and social values. Further still, we have to be careful we don’t double-count our useable land area since we cannot assume the same piece of land is producing solar power and also growing crops for energy purposes. To avoid double-counting, we have limited our calculations to bioenergy from waste and residue sources, plus existing bioenergy utilisation. A larger resource extent would be calculated if alternative assumptions were made regarding land-use and competition with other uses of the land.

Based on ABARE data – ABARE publish historical energy statistics. The 2009 update of Table F of their Energy Statistics series is available at http://www.abare.gov.au/publications_html/energy/energy_09/F_09.xls.

9

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The ways of converting biomass into bioenergy are numerous and include: • Combustion (burning the biomass) and converting the heat released into electricity, • Gasification, which involves converting the biomass into a fuel gas which can then be used to fuel an engine driving an electricity generator, • Pyrolysis, which is similar to gasification but involves converting the volatile component of the biomass into a gas that can then (typically) be converted to a liquid fuel for transportation fuel or for a power generation engine, • Fermentation to produce ethanol for fuel use, • Distillation (traditionally of wood) to produce methanol for fuel use, or • Digestion using microbiological organisms to convert part of the biomass to methane for fuel use. Digestion processes are common in sewage treatment processes and in landfill gas projects. Theoretical energy resources are estimated to be approximately 57PJ/year and useable resources are estimated to be 33 PJ/year. 4.6.

Geothermal energy

Geothermal energy is an emerging technology in Australia. Although there is presently only a small plant at Birdsville in Queensland, there are several developers working towards large scale plants using both hot rock and hot sedimentary aquifer resources (refer to the Part 2 report). Geothermal energy is contained in the temperature of the rocks and water bodies underground. By using hot water, steam or other fluids, the heat can be extracted and converted to electricity in a power plant. The amount of electricity that can be produced and the cost of producing it are functions of the temperature of the resource and the depth of wells used to extract the energy. A higher temperature resource that is closer to the surface is better than a low temperature resource or a resource that requires very deep wells (although this is primarily an economic factor). The locations of Victoria’s better resources can be shown by considering the temperature at a particular depth. Figure 15 shows the temperature at 1500 metres depth over Victoria. More detailed analysis is required to specifically identify the different types of geothermal development potential but the figure is nevertheless illustrative.

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fIGURE 15 | Temperature at 1500 metres depth underground Renewable Energy Potential for Victoria | Geothermal Temperature at 1500m Geothermal Temperature at 1500m

The energy stored as heat in the rocks and water can be extracted over a period of time – typically the 30 year life of a power station. The energy content is calculated based on the expected average production temperature relative to the reinjection temperature of the water. Conversion efficiencies are lower at sites where the production temperature is lower. For example 13% efficiency would be typical for a binary cycle plant10 operating from a 168°C average production temperature resource. The electricity that is useable by electricity users in Victoria is less than the generated electricity because of the electrical loads of the power station itself. These “parasitic” loads tend to be relatively high for geothermal plants due to the need to pump the water between the wells and through the power plant11. Considering each area of the State and their temperature profiles and potentials for hot rock and hot sedimentary aquifer resources, calculations have been made of the geothermal resource potentials. The useable energy resource is calculated as 180 PJ/year. A power plant type that is selected for lower temperature heat sources. Refer to Part 2 for more detail. Electrical losses also apply in the transmission and distribution systems but these are not likely to be significantly different from current losses, considering new transmission infrastructure would likely be developed.

10 11

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The Local Government Areas representing the highest geothermal resources in the State are shown in Figure 16. fIGURE 16 | Victorian useable geothermal energy (PJ/year), top 30 LGA’s 50 45 40

Useable energy, PJ/year

35 30 25 20 15 10 5 0

4.7. Wave and tidal energy Wave and tidal energy resources are presently the least developed technologies of all the renewable energy types considered. Calculations were developed based on the numbers of devices that could be conceived for wave and tidal energy extraction with 10 kilometres of the Victorian coast over timeframes extending out to 2030. Calculations considered each of ten zones of approximately equal size along the coast. The raw data available for tidal and wave energy are summarised in Figure 17 and Figure 18 respectively.

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PART 1 – ANALYSIS & DISCUSSION

4 | RENEwAbLE ENERgY RESOURCES

fIGURE 17 | Tidal energy resource within 10 kilometres of the Victorian coastline Renewable Energy Potential for Victoria | Average Potential Tidal Power Average Potential Tidal Power

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PART 1 – ANALYSIS & DISCUSSION

4 | Renewable energy resources

fIGURE 18 | Wave resources within 10 kilometres of Victorian coastline Renewable Energy Potential for Victoria | Average Wave Power Potential Average Wave Power Potential

Victoria has relatively modest tidal energy potential, only 0.1PJ/year is estimated to be “useable” within the method used in this study. There are areas of significant wave energy potential though, particularly along the west coast in zones 1 to 5 in Figure 18. Calculated useable wave energy potentials are 27PJ/year. Calculating the potential based on the number of devices that might conceivably be deployed could understate the potential over a very long period (beyond 2030 for example) but this is not material to the conclusions of the review. 4.8.

Total renewable energy potential and energy consumption amounts

Presentation of our assessment of theoretical and usable renewable energy resource potentials, and comparisons with Victoria’s energy consumption levels for 2006, are shown in Table 4 and Figure 19, which also includes the projected consumption levels for 2030. In Table 4 the symbol “>” means “more than” and “>>” means “much more than”. We have shown this information using the common energy units of PJ/year (refer to Appendix A for a discussion on energy units and the calculated energy quantities in GWh/year units).

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PART 1 – ANALYSIS & DISCUSSION

4 | RENEwAbLE ENERgY RESOURCES

TAbLE 4 | Renewable resource potential and energy consumption in Victoria (2006) Theoretical PJ/year

Usable PJ/year

Wind

15,900

5,630

Solar

32,780

2,520

Geothermal

>>270

180

54

3

Biomass

>>57

33

Wave

>>27

27

Tidal

>>0.1

0.1

>49,000

8,400

Hydro

TOTAL

Consumption PJ/year

855

It is important to note that the values shown for renewable resource potential in Table 4 above do not include what we have called the ‘practical’ resource potential – that is, the potential which takes into account constraints due to economic, environmental, social or regulatory restrictions. The projected consumption for Victoria for 2031 (from Table 2) is 1,174PJ/year. fIGURE 19 | Renewable energy resources and energy consumption in Victoria – 2006 and 2030 9,000 

Renewable potentiaal & final energy consumption, PJ/y

8,000 

7,000 

6,000 

Solar Tidal Wave

5,000 

Biomass Hydro

4,000 

Geothermal Wind

3,000 

2,000 

1,000 

‐ Usable

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PART 1 – ANALYSIS & DISCUSSION

Consumption (2006)

Consumption (2031)

4 | RENEwAbLE ENERgY RESOURCES

Renewable energy sources other than wind and solar can collectively be seen to be able to provide only a relatively small proportion of Victoria’s current final energy consumption unless we make large scale changes to our use of Victoria’s land. The need to “stretch” the renewable energy potential out by making more land available in this way disappears when solar and wind energy are added to the set of renewable energy choices. By themselves, solar or wind energy could conceivably provide all of Victoria’s energy needs with some to spare. As shown in Figure 20, there is a large difference between the “theoretical” energy potential and the assessed “useable” potential reflecting the assessments made regarding land use. fIGURE 20 | Theoretical versus useable energy 60,000 

50,000 

Renew wable potentiaal , PJ/y

40,000  Tidal Wave

30,000 

Biomass Hydro Geothermal Solar

20,000 

Wind

10,000 

‐ Theoretical

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PART 1 – ANALYSIS & DISCUSSION

Useable

4 | RENEwAbLE ENERgY RESOURCES

4.9. Per capita renewable potential and consumption Both the renewable energy production potential and Victoria’s energy consumption levels can also be shown on a “per-capita” basis as shown in Table 5. TAbLE 5 | Per capita renewable energy potential and per capita consumption (2006) Usable energy GJ/capita/year Wind

1,146

Solar

512

Geothermal

37

Hydro

1

Biomass

7

Wave

5

Tidal

0

TOTAL

1,707

Consumption, GJ/capita/year

174

The energy consumption amounts shown in Table 5 (and Table 4) are secondary (or final) energy consumption amounts. Presentation of the data on a per-capita basis instead of on an overall energy usage basis does not affect the results or conclusions that can be drawn. On either an absolute or per-capita basis, the calculated useable renewable energy quantities are substantially more than Victoria’s energy consumption levels. This per-capita data would facilitate comparisons against similar analyses for other States or countries on a consistent basis, should this be desired. 4.10.

Location of the resources

The areas of the State that contain the highest useable levels of each resource have been identified for those resource types where it is relevant to do so. The breakdown of the State into areas for the presentation of this geographical data is by Local Government Area. Since Local Government Areas do not have the same area nor population, this does not reflect the resource potential per unit area or per head of population, but does provide a guide to the general locations in Victoria with the highest useable energy potential. Considering all of the relevant on-shore renewable energy resource types together, the highest (30) useable renewable energy potential Local Government Areas are shown in Figure 21.

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fIGURE 21 | Victorian local government areas with the largest renewable useable energy potential 600

Useable energy, PJ/year

500

400

300

200

100

0

The four Local Government Areas with the highest useable renewable energy potential are all in the north-west of the State: • Mildura, • Buloke, • Yarriambiack, and • West Wimmera. The geographic distribution of the renewable energy resources within the State is shown in Figure 22. These areas tend to rank highly for both wind and solar potential and the Mildura Local Government Area also ranks highly for geothermal potential.

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PART 1 – ANALYSIS & DISCUSSION

4 | RENEwAbLE ENERgY RESOURCES

The high rankings in the north west are due to a combination of factors: • Very good resource levels, particularly for solar energy, • Reasonable extents of the types of land assumed to be potentially appropriate for useable renewable energy production (such as dryland agriculture and grazing), and • Large land areas within the Local Government Area. fIGURE 22 | Locations of greatest useable renewable energy potential Renewable Energy Potential for Victoria | LGA Administrative boundaries & Coastal Zones

Renewable Energy Potential Per LGA Boundary & Coastal Zones

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PART 1 – ANALYSIS & DISCUSSION

4 | RENEwAbLE ENERgY RESOURCES

5

SO whAT DOES IT SAy AND mEAN?

5.1.

The answer

In Section 4, the useable renewable energy quantities across Victoria were compared with the State’s current and projected energy consumption levels in the period from the present to 2030 from Section 3. This shows that the calculated useable renewable energy potential of Victoria is much greater than Victoria’s present consumption and also than the future consumption projected to 2030. This “surplus” is approximately seven times the consumption rates even using the higher consumption projections for 2030 (and almost ten times more than current consumption levels). This is largely due to Victoria’s wind and solar resources but with contributions from geothermal, biomass and wave power. In fact, the useable amounts of either wind or solar energy alone could more than meet Victoria’s energy consumption needs. The large excess of useable resource potential relative to consumption levels means that the assertions and assumptions applied, particularly in assessing the useable land area proportions in Section 2.5, are not as important to the conclusions reached than might have been the case if the resource potential and consumption levels were very close. The percentages of the relevant land use categorisation areas in Section 2.5 could be in error by a factor of seven and the conclusion that it is conceivable to supply all Victoria’s energy needs from renewable sources would still be valid. It must be remembered of course that this useable resource potential excludes consideration of economic, environmental, social or regulatory constraints upon the development of renewable energy projects. 5.2.

Reality check

However, what would be the implications of the development of the renewable energy resources to the extent shown in Section 4 and what are some of the issues that would need to be addressed? 5.2.1. What would this amount of renewable energy look like in Victoria? The two largest contributors to renewable resource potential are wind and solar. Although their potential usable energy is much greater, consider what would be required of either source to meet the 2030 energy requirement for Victoria of 1,174PJ/year.

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PART 1 – ANALYSIS & DISCUSSION

5 | SO whAT DOES IT SAY AND MEAN?

To produce 1,174PJ/year of wind energy would require approximately 200,000MW, or 100,000 turbines of typical size. This is roughly the same as the combined number of installed wind turbines in the whole world today. The current rate of installation in the world is of the order of 30,000MW of wind turbines per year and thus the installation of 200,000MW of wind turbines in Victoria would match more than six years’ of production of the world’s wind energy industry. Victoria presently has approximately 400MW of installed wind turbine capacity and thus the present capacity would need to be expanded around 500 times to achieve this quantity. For comparison, a contemporary wind farm in Victoria, the Challicum Hills wind farm shown in Figure 23 near Ararat, comprises 35 turbines totalling 52.5MW. fIGURE 23 | Challicum Hills wind farm, Victoria

In the case of the solar energy potential, the scale of this can be considered by comparing the calculated quantities for Victoria to the published parameters for a particular solar power plant, the Andasol 1 (Figure 24) project in Spain, which was completed in December 2008. The solar energy levels for Andasol 1’s location are higher than for Victoria’s average by approximately 20%, but the comparison is still reasonable:

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PART 1 – ANALYSIS & DISCUSSION

5 | SO whAT DOES IT SAY AND MEAN?

Andasol 1 solar power parameters: Nominal capacity Annual estimated output Land area

50Mw 180gwh (=50PJ) 200ha (= 2,000,000m2)

To produce Victoria’s 2030 energy requirement of 1,174PJ/year by solar electricity would thus require over 2,000 such plants costing $500 billion to $1,000 billion at today’s costs. The land area occupied would be over 400,000ha, or 2% of Victoria’s land area. fIGURE 24 | Andasol 1 – an example of a 50MW solar thermal power plant12

5.2.2. How do we deal with intermittent renewable energy supply? The two largest potential contributors to Victoria’s renewable energy supply – wind and solar – are intermittent forms of electricity generation. That is, they generate only when the wind is blowing and the sun is shining respectively. In the absence of ways to manage intermittency, such as large scale energy storage, supply sources need to have the means to change output levels independently of changes in the wind and sun.

12

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Image: Paul-Langrock.de/Solar Millennium, used with permission

PART 1 – ANALYSIS & DISCUSSION

5 | SO whAT DOES IT SAY AND MEAN?

An intermittent power generation source is anticipated to be acceptable on an electricity system up until it is contributing around 20% of total supply capacity. Up to this level, the normal operation of other plants on the grid can cover for the variable output of some generators without a great impact. Beyond some level of penetration other provision needs to be made. This would certainly be the case if all Victoria’s energy needs were to be provided by intermittent renewable energy sources. Because the contribution of intermittent renewable sources will not immediately reach levels that would cause a problem, there is time for arranging or developing technologies and techniques to deal with this issue. Some potential arrangements that might arise in the future are: • Hydro and pumped storage hydro The ability of hydro plants to vary (eg reduce) their output, and to use the capacity of a dam (where one exists) to store energy for use at some later time, has long been used13. •

Batteries

Batteries, capacitors and flywheels represent forms of energy storage technologies that are presently available today for small scale applications. There are a myriad of forms under consideration for larger scale storage applications14.

• Energy storage in fuel form

These possible options include:





• Using renewable electricity to produce hydrogen which can be used as a transport fuel or for energy storage – the so-called “hydrogen economy”;





• Using solar energy to dissociate ammonia15





• Converting biomass to biofuel and storing it in this form until its use;





• Solar energy storage within the power plant in heated oil or salt solutions or in combination with a geothermal resource.

•

Compatible loads

Where large loads can be temporarily interrupted or shifted to another part of the day, this can be used to manage intermittent energy supplies. This includes technologies such as remotely switched hot water systems.

A form of hydro generation called “run-of-river” hydro where there is no significant dam storage is not included. See for example http://www.sandia.gov/ess/Technology/technology.html 15 See for example http://solar-thermal.anu.edu.au/high_temp/thermochem/index.php 13 14

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5 | SO whAT DOES IT SAY AND MEAN?

Whether one or more practical large scale energy storage solutions relevant to the Victorian context emerge over the next few decades remains to be seen. Nevertheless, a commitment to very large scale conversion to renewable energy probably depends on having confidence that the intermittency issue can be properly addressed. 5.2.3. How do we connect the resource to the electricity grid? Any large scale development of renewable energy projects in Victoria would necessarily require consequential infrastructure developments to support them. One of these infrastructure needs would be the extension and reinforcement of the electricity grid. The current electricity grid infrastructure in Victoria is shown in Figure 25.

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PART 1 – ANALYSIS & DISCUSSION

5 | SO whAT DOES IT SAY AND MEAN?

VICTORIAN ELECTRICITY & GAS TRANSMISSION NETWORKS fIGURE 25 | Victoria’s electricity and gas networks16 ELECTRICITY

GAS

500kV Transmission

Principal Transmission System

330kV Transmission

Other Transmission System

275kV Transmission 220kV Transmission HVDC Transmission

Berri-Mildura Pipeline

South Australian Interconnector (Murraylink)

New South Wales Interconnector

Red Cliffs

New South Wales Australian Pipeline Trust

New South Wales Interconnector

Culcairn Koonoomoo

Kerang Echuca

Albury/Wodonga Shepparton

Horsham

Springhurst CS Dederang

Euroa

Bendigo

New South Wales Interconnector

Mt. Beauty

Carisbrook SEA Gas Pipeline Eildon South Australian Interconnector

Sydenham Ballarat Brooklyn CS Moorabool

Hamilton

Wollert CS South Morang

Geelong LNG Pt. Henry Portland

UGS Iona

Eastern Gas Pipeline

Victoria

Pakenham

Gooding CS

VicHub Longford

SEA Gas

Latrobe Valley

Anglesea

Tasmanian Gas Pipeline BassGas

Tasmanian Interconnector (Basslink)

As we noted in Section 4.10, a large proportion of the renewable energy resource of Victoria is located in the north and west of the State where there is relatively little electricity grid infrastructure at present. The existing infrastructure has been designed to carry electricity from the State’s main power producing region in the Latrobe Valley to the main load centre areas of Melbourne and Geelong, and to interconnect with the adjacent States. At present, the electricity network does not have the capacity to transport very large amounts of new electricity generated in the north-west to Victoria’s load centres.

16

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VENCorp (now part of Australian Energy Markets Operator (AEMO)), “Victorian Annual Planning report, 2009”

PART 1 – ANALYSIS & DISCUSSION

5 | SO whAT DOES IT SAY AND MEAN?

This would mean that new and upgraded infrastructure – such as electricity “poles and wires” – would be required in due course. Although the scale of the additional network infrastructure required is large, it is not the dominant factor in the decision to invest in the renewable energy supply system. For example, if 200GW of wind power were to be provided, then the wind generation itself would cost of the order of $400 billion and the extra electricity network capacity would be expected to cost of the order of 5% of this amount (around $20 billion). Similarly, the environmental and social impacts of the extra wind generation would be expected to be larger than those of the extra network infrastructure, but these factors would all require appropriate evaluation in due course. 5.3. Transport fuels – how might they change in future? Our treatment of renewable energy – in that it is calculated based on conversion to electrical energy – has some connotations for the treatment of transport fuels. This is touched upon in Section 3.6. Road transportation alone uses approximately 260PJ/year of fuel energy. Our current transport fuel use is dominated by oil-based fuels and cannot readily be converted to other energy sources except with some technical developments and as the existing stock of vehicles is retired and replaced. However in future, besides the possibility that our vehicles might be powered by similar fuel burning engines to those used today, some other scenarios are possible. For example: • Hydrogen may become an intermediate fuel. Hydrogen can be produced from renewable energy sources, transported in special containers to filling stations, and used to fuel vehicles that have been set-up to operate on hydrogen fuel (including engines and fuel cells); • Electric vehicles may progress from their current form to allow more widespread use. Electric vehicles would be charged up using electricity connections at our homes (for charging overnight for example), at a fast charge service station or via a battery exchange station; and •

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Biofuels could be further developed to displace more fossil fuel. However, to make a large contribution to transport energy needs from biomass energy resources within Victoria would require different assumptions regarding land-use for energy crops than have been made in the current review.

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5 | SO whAT DOES IT SAY AND MEAN?

Both hydrogen fuelled and electric vehicles could conceivably be supplied by our useable amount of renewable energy. Either of these two other scenarios fit with our handling of the renewable energy in electrical energy form. In the first case hydrogen is commonly produced from electricity by electrolysing water17, and in the second case, renewable energy derived electricity is delivered to the battery charging facility through the grid in the same way that non-renewable energy derived electricity would be. Current commercial electric vehicles have limited range (typically 150 to 250 kilometres) and their use is subject to practical recharging times and battery life18. This is caused by current technology limitations on batteries. If further or future developments in battery technologies continue to progress then this electric-powered pathway may be the future for our passenger vehicles and even trucks. The scenario that might eventually become predominant is not yet known. The treatment adopted is considered credible however – a push to convert Victoria to 100% renewable energy would itself tend to direct the transportation market towards options that were compatible with this. If our vehicles remain fuelled by oil based fuels, or fuels that can readily be substituted for these (such as biofuels) then the analysis indicates this would require very different land use assumptions to be made if this was to be met with Victorian renewable energy sources as this would then depend on biomass energy sources. Figure 8 and Figure 9 show that transportation fuel energy is the largest portion of Victoria’s energy consumption at approximately 300PJ/year. This is vastly in excess of the assessment of biomass derived energy from Victoria. Although the assessment of biomass energy was based largely on waste products rather than specifically converting agricultural land (or sub-agricultural land for that matter) to energy crop production this remains a large hurdle19. Take for example Victoria’s entire wheat crop of around 900,000 tonnes/year (see Part 2 of this report). The raw energy value of this crop if it was all converted to biofuel without any losses would be only 13.5PJ/year. There would be a considerable impact on Victoria’s land-use and economy if large scale diversions of land to energy cropping were applied. Whether this is conceivable or not has not been evaluated. Logically, if the community were requiring large shifts in stationary energy supplies to renewable energy sources, then the community would also desire transportation energy forms that were compatible with renewable energy supplies. The community would select similar economic, environmental and social trade-offs in its selection of both stationary and transportation energy supplies. This would especially be the case where the communities over substantial parts of the world are making similar decisions at similar times. Vehicle suppliers and energy suppliers would respond to widespread consumer preferences.

Passing an electric current through water to decompose its molecules into hydrogen and oxygen. See http://www.fueleconomy.gov/Feg/evtech.shtml for example 19 On the other hand the treatment of the biomass energy as converted to electrical form understates the amount of energy that could be obtained if it were instead converted to liquid fuel form, depending on the process and biomass type employed. 17

18

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6

PAThwAyS

Scientific consensus is strongly in favour of addressing climate change as a matter of urgency. We have no doubt that renewable energy will be one of the solutions to reducing our greenhouse gas emissions. The conclusion that we have drawn from our assessment is that it is indeed possible that at some time in the future that all Victoria’s energy needs could be supplied from domestic (ie Victorian) renewable energy resources. That is:

VICTORIA hAS A lICENSE TO DREAm Of A fuTuRE whERE ITS ENERGy NEEDS ARE whOlly PROVIDED by RENEwAblE ENERGy RESOuRCES This is the main conclusion of this review. However, what must be kept in mind is that this review did not go on to consider any of the economic, environmental, social or regulatory restrictions which might apply to an assessment of Victoria’s renewable energy resources. Nevertheless the importance of these should not be underestimated. It is these factors which will ultimately determine how much renewable energy Victoria will generate in future. For example, Victoria’s wind and solar resources are by far the State’s largest potential renewable energy contributors. We gave some broad illustrations on the physical and economic implications should all our energy needs be supplied from solar or wind. While we did not undertake a comprehensive analysis of the economic implications, it is commonly accepted that solar power is presently very much more expensive than many other energy sources – renewable and non-renewable. Wind is presently one of the lowest cost new renewable electricity sources available – but if it were developed to the extent necessary to substantially supply all our needs, the cost may be significantly higher than current costs. This is because more marginal wind resources would need to be used, and significant expenditure on electricity networks would be needed. An immediate commitment to follow the 100% renewable pathway would almost certainly require an economic commitment of such a significant scale that it would impact on the achievement of many other of society’s economic needs and goals. There would also be social and environmental impacts from developments of wind and solar facilities on this scale.

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Commitments such as these are all about trade-offs. These trade-offs are generally between the economic, environmental and social outcomes. Evaluation of any major pathway decision such as a major project is all about determining what the trade-offs are and whether the community wants to, or should, accept them. It is possible that the costs of many technologies will reduce over time, and that some technologies will improve in performance or life cycle cost – perhaps energy storage options for example – such that in future we do not have the same trade-offs that we would face today. Future costs and impacts are still being determined for many of the important renewable energy options. They are also still being determined for many of the non-renewable options that could alternatively be applied to achieve some of our goals (such as the use of coal with carbon capture and storage). Not all of the options under consideration are at the same stages of development. For example wind power technology is relatively mature and proven whereas carbon capture and storage is still being technically assessed. These potential future developments mean that we are uncertain, at this point in time, about how much of our renewable energy resource we could practically use. The community does not have the information today to make decisions about committing exclusively to a 100% renewable energy pathway. Further information on the renewable energy technologies considered in this report, including how the energy is converted to useable form, can be found in Part 2 of this report.

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APPENDIx A | ENERGy uNITS

For readers not familiar with the energy industry, a short note on energy units might be helpful. The basic unit for energy is the Joule, J. The basic unit for power is the Watt, W. Power is the rate at which energy is used or converted and in fact 1 Watt equals 1 Joule per second. In this review we are concerned with the quantity of fuels and resources we use in an annual period rather than the rate at which we use them at any particular instant and hence we are concerned with energy rather than power. A joule is quite a small amount of energy. It takes around 350,000J to heat a litre of water from room temperature to 100°C. When we want to look at quantities of energy used in significant activities and over long periods we need energy units that are more practical to handle. GJ are a handy unit for measuring energy usage in a single household over a year or for a single business. When dealing with energy consumptions for a year for a whole State, the most convenient unit is the PJ. The values of common energy units are shown in Table 6. TAbLE 6 | Energy units (S.I.) Energy unit

Scientific notation

Value (Joules)

J

10

0

kJ (kilojoule)

10

3

1,000

MJ (Megajoule)

10

6

1,000,000

GJ (Gigajoule)

10

9

1,000,000,000

TJ (Terajoule)

12

10

1,000,000,000,000

PJ (Petajoule)

10

1,000,000,000,000,000

15

1

Another energy unit we are familiar with in our everyday lives, because it is the unit by which our household electricity consumption is measured, is the kWh. This unit measures energy (and not power) because it is the amount of energy employed if we used energy at a rate of 1kW for an hour. Since there are 3,600 seconds in an hour, 1kWh = 3,600kJ, and hence 1PJ = 278GWh. Convenient and common units using this measure are kWh (for electricity usage at household level), MWh (for electricity usage at an industrial business level) and GWh (for aggregated usage over the whole State). The calculated Victorian renewable energy resources in both PJ/year and GWh/year units are shown in Table 7.

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TAbLE 7 | Renewable resource potential and energy consumption in Victoria (2006) Theoretical PJ/y

Usable PJ/y

Wind

15,900

Solar Geothermal

Theoretical GWh/y

Usable GWh/y

5,630

4,425,000

1,564,000

32,780

2,520

9,106,000

699,000

>>270

180

>>75,000

50,000

57

3

15,000

934

Biomass

>>57

33

>>15,700

9,300

Wave

>>27

27

>>7,400

7,400

Tidal

>>0.1

0.1

>>39

39

>49,000

8,400

>13,645,000

2,331,000

Hydro

TOTAL

Consumption PJ/y

855

Consumption GWh/y

238,000

It is sometimes appropriate to differentiate the form of energy being discussed (see Section 2.2 of the Part 2 report for a discussion on energy forms). If energy is in heat form, we might sometimes add a “th” subscript, as in PJth, to identify the energy as being in thermal form. Similarly, an “e” subscript might denote electrical energy and an “f” subscript might denote fuel energy. The amount of energy a particular power generator can produce in a year depends on the generator’s rating (for example a typical 2MW wind turbine at a high wind speed will produce approximately 2MW). The annual output also depends on how much of the year the turbine is available to run (that is the time when it is not being repaired or maintained), whether there is any average degradation of performance due to wear-and-tear, whether any electrical losses have to be accounted for and the extent to which the speed of the wind resource is lower than the high wind speed that produces the maximum output. Since most of the time the wind will be blowing at more moderate speeds, a typical wind turbine might have an annual average output relative to its maximum output (called its capacity factor) of typically 20% to 45%. Since there are 8766 hours in an average year, the annual energy output for this 2MW wind turbine if it had a 35% capacity factor would be 2MW x 8766hours x 35% = 6,136MWh. The capacity factors of different types of power generation plants vary considerably. The capacity factors of different hydro plants alone can vary from around say 10% up to nearly 100% depending on the plant’s characteristics and on water availability.

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APPENDIX A | ENERgY UNITS

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