Saturday, March 27, 2010

SE Qld power station to close in 2012

A 40-YEAR-old coal-fired power station in southern Queensland will be shut down by 2012 - but workers' jobs have been guaranteed.
The closure will not impact on Queensland power supplies as the nearby 385MW Swanbank E power station, commissioned in 2002, will continue operation.

Swanbank E, a gas-fired power station, produces 50 per cent fewer greenhouse emissions than the average coal-fired plant.

There were plans to build a gas fired power station in the valley... The council knocked the plans back. I wasn't opposed, and thought that those who were opposed were just NIMBYs.

After finding out a bit about how expensive gas fired power is and why (check out the comments on this thread from Wand and Skeeter), and seeing how much and how quickly our power bills have risen just from the government getting rid of the revenue section of the power authority. Now I think it's not such a good idea.


Wand said...

Here is one outcome:

In general terms the efficiency of a base load black coal fired power is about 36%. 1 Megawatthour (MWh) is equivalent to 3.6 Gigajoules (GJ). This means that the energy input to the power station to produce 1 MWh is 10 GJ. Current coal costs to a power station are about $3/GJ so the cost of generation of coal fired electricity is about $30/MWh or 3 cents per kWh (for base load power).

The gas fired power station that is to replace Swanbank B is a combined cycle gas turbine (CCGT) power station. A power station of this type recovers the exhaust heat from two or more open cycle gas turbines and uses the heat to generate steam which is then used to power an additional (steam) turbine. This station must be operated continually because backing off any of the gas turbines will immediately have a multiplier effect as the steam driven turbine would back off even faster. So this is the ‘new’ base load power station. The overall efficiency of this type of station is about 52%. Using a gas price of about $9/GJ means that the new generation cost for base load power is about $62.30/MWh or say 6.35 cents per kWh, i.e., more than twice that of coal power. The other station at Darling Downs mentioned in the linked article is also a CCGT station.

Of course this is happening because of deliberate government policies that prevent the construction of base load coal fired power stations but in the process all we are doing is throwing away our competitive advantage of low cost electricity for industry.

If an ETS is added to the equation the position will become suicidal as has been pointed out many times by Terry McCrann. Interestingly there is this paper that I heard presented recently that factors in a cost for an ETS and decided that electricity prices would increase by 50% or so. Well I say in your dreams. It is not possible to model the effects of a rationing system that will screw the economy into the ground. If the beast does get implemented, supposedly the whole of the Australian economy will be covered but the throttle will be applied to about 70% of the economy being the organisations required to buy emissions permits. It’s complex but have a look at the list of businesses that have reported (under National Greenhouse and Energy Reporting) for 2008/09. The businesses with the high emissions are most likely to need permits (ration coupons) and they will be the hardest hit. They are the electricity utilities, the miners, the aluminium companies, cement industry, steel industry etc. Whoever thinks a business can work within a framework such as this? The gradual decline may look innocuous enough but it will be National Suicide.

Skeeter said...

I urge all Kae's readers to check out Wand's links in the above comment. What we are being told by the politicians has no connection with reality.
IIRC Wand, you recently explained the 2008-09 34% increase in SEQ domestic power charges as being largely caused by the introduction of a gas-fired generator in our region.
I also recall your telling us that the power station went on line before any gas storage resources had been built at the station, thus forcing reliance on the pipeline for fuel storage.
Is my memory correct? —and were you referring to Swanbank E in your explanation for the 34% price increase?
I am in the process of writing to politicians about the recent (pre-ETS) consequences of demonising coal, and will be using your "this paper" link above.

Wand said...

Skeeter, the price increases are due to the switch to gas fired power generation at the expense of coal as well as provision of funds to allow the utilities to upgrade / repair and maintain the network. In Queensland, domestic customers are supplied under an electricity tariff that is determined by the Queensland Competition Authority - see here for the tariff components. I imagine the process would be similar to the process in NSW where the energy retailers make a submission to the Regulator to adjust the tariffs for the coming year based on all their anticipated costs for the year. Part of their costs relates to their expectation on the price they will have to pay to purchase the electricity that they sell.

The price that a retailer pays for electricity will depend on whether the electricity is purchased on or off the pool. The pool price is set each half hour as the highest price for the last dispatched generator. What this means is that each night, each power generator places a bid sequence to the network operator for power for the next day. The network operator will then dispatch generators onto the grid in sequence to meet the demand on the network and generators with the next lowest cost would be dispatched. For example a coal fired power station may offer to supply power at $30/MWh and provided there were no lower bids would then be dispatched (i.e., authorised to connect and supply power to the grid) at all times. A CCGT baseload power station would need to be dispatched all the time because it would not be able to easily back off the heat recovery steam generator component of the station. The CCGT station could bid low during the night to ensure that is too was dispatched but would then run at a loss. At other times it would have to remain running at a much higher price to recover costs and make a profit.

The government knows full well how the electricity market operates. If no new coal power stations are allowed to be built then the system eventually will run out of low priced coal fired electricity (in the pool) and higher priced electricity will be dispatched. The government can point a finger at the market and claim it is the market that determines the prices but the government has deliberately through ‘green policies’ right across Australia systematically manipulated the market. What we are seeing is the construction of gas fired power stations on the basis that they will be dispatched for sufficient time to be profitable at much higher electricity prices. The construction of CCGT stations is a natural extension of this reality where the supply of cheap coal based electricity becomes less to the point that a CCGT can be justified at a much higher price. These changes are a direct result of state government policies.

The comment I made about the gas supply to a gas fired power station related to NSW where the particular station could only be used as a peaking plant for maybe 6 hours a day if dispatched. In the absence of new coal power stations the market would become easier for other generators because they would all be powered by gas at the fuel costs that I indicated. BTW the best price for an open cycle gas turbine (peaking station) would be say an efficiency of 45% would be a fuel price of $77.15 per MWh (7.8 cents/kWh). Other costs - power station operation, network, distribution etc add considerably to this price.

Another aspect of the national grid allows electricity to be sold directly by a power station to an end customer such as a utility which obliges the power station to be on line at all times when the utility requires power under the contract. Otherwise the power station would be obliged to make up any shortfall at the prevailing pool prices.

Is this long enough?? Skeeter give me a call if you like- I think you have my phone number. Cheers.

Skeeter said...

Thanks, Wand.
That is great and it gives me a lot to work on. I do have your number and I will give you a call tomorrow.

One way the retailers can cut down on their costs is to stop stuffing the customers' billing envelopes with blatant AGW propaganda.
This is a sample that arrived with my last Origin bill.
I very much object to contributing to the costs of this brainwashing, but I doubt that I will have much luck finding a retailer that doesn't do it.