[Gasification] More on, gasification economics

[Peter & Kerry]

On 20/04/2012 5:00 AM, gasification-request at lists.bioenergylists.org wrote:
> It does seem to be very much a matter of having all your technical
> details available in the form they want so that you can demonstrate that
> you will disconnect from the grid when it's down, your power quality
> will be good etc It's simple now to get PV's - up to 100kWe anyway -
> connected to the grid in Oz as the regulators/utilities are comfortable
> with the technical issues. 20 years ago this was definitely not the
> case. When I suggested to the Vic regulator in the mid-90's that we
> should follow the US lead with PURPA the response was decidedly not
> favorable. Now we have getting on for 1 million rooftop PV installations
> in Oz. If you have new kit you can expect to have to jump through some
> hoops.
>
> As for supplying in to the grid as against supplying a co-located demand
> on a levelised energy cost basis you will struggle in Australia to
> compete against large coal fired stations producing electricity at a few
> cents/kWh receiving perhaps 5-6c/kWh to supply into the grid. If you can
> supply a co-located load that's paying the utility for power at, say,
> 10c-25c/kWh your economics start to look a lot better. If you start
> bidding to supply into the grid to meet peak loads the price can be a
> lot better but you will be on the hook to supply that power. Or to hedge
> your supply which will cost you.
David,

You are quite right and we made the decision not to actively seek grid 
connection opportunities and focus on off grid or avoided grid cost 
reduction and non electricity centric products as all our experiences 
with Utilities were very negative, "Every assistance short of help" 
seems to be the unspoken policy.

They seem less reluctant to wear <10kWe connections (so long as 
individual branch line loads don't exceed 200kW) though it is hard to 
say yet whether this will apply to biomass power plants but we will see 
in due course, remember solar was mandated so they had no choice, but 
every manager I spoke to whined about the burden on their resources, the 
uncertainties imposed on grid management and the high cost they would 
need to pass on to their customers. Given the million or so small solar 
installations have made not one jot of difference to the traditional 
infrastructure cost of utilities or the level of conventional generating 
assets required to meet peak demand they might have some grounds to 
complain.

The highest "in principle" PPA offered (for a proposed 2MWe biomass 
power plant) was 4c/kWhr (the average coal fired wholesale price at this 
location was 5c...), which is as you say another disincentive. We even 
had a client in the ACT who was really keen to put in a 1MWe waste wood 
fueled plant but after spending all day on the phone to the local 
utility being passed from one person to another they gave up after the 
6th such shuffle referred them back to the utilities website so our 
client could buy green power off the utility rather than go to the 
trouble to generate it themselves...(there appears no transparency as to 
how such "Green" power sold at a premium by the utility was actually 
obtained). Yet the ACT Government was willing to spend millions to get a 
large MW scale solar plant into the region...go figure.

Anyway the point is the demand and market requirements often talked 
about are largely intellectual constructs, with a catch 22 thrown in 
which reads something like "We need to promote and develop technologies 
for this purpose, unless this is inadvertently achieved in which case we 
need to change the requirements"

(Hey its not my fault, I was born an optimist they made me into a cynic)

I am told by the solar installers that the grid tied systems can't act 
as stand alone house power when the grid goes down for any reason, even 
though this is technically possible without risking the safety of line 
workers repairing a blown transformer for example, somewhat detracting 
from many home owners dreams of being self sufficient in a crisis. We 
have discussed this with some utilities and they seemed to like the idea 
of "Smart Grid" controls fitted to biomass power plants as these could 
then be managed directly by the utility, turning them off, on, up and 
down as required for best grid management (great synergy then with solar 
PV & wind as a flexible renewable energy matrix), cumulatively the 
"poles & wires" providers could embed dozens or even hundreds of MW's of 
distributed generation capacity without the normal costs or problems of 
large centralised plants, early days in all this though since it also 
requires a change in status quo, never easy. If it did happen though, 
then Oz could potentially meet 30% of its existing electricity needs 
from such "Stored Solar" (biomass) resources and bootstrap a higher 
solar/wind mix than otherwise prudent for grid stability.

At the end of the day though electricity is second only to process heat 
as the lowest value commodity, transport fuels and chemical feed stocks 
being a far more attractive target for gasification technologies with 
avoided landfill/waste disposal costs topping returns. Lots of public 
funding available to research and develop this, but not for anyone who 
can actually do it though since this would disrupt the gravy train.

Is it all depressing? Not at all. Firstly at a small scale lots of 
people want or need to be grid independent (if you can build a system 
that meets their needs), secondly at commercial scales with some careful 
planning and hard real life research there are some really intriguing 
and potentially viable approaches using a little technology blending and 
lateral marketing...hate to spoil this though by announcing it in time 
for the policy makers and vested interests to stuff it up...


Cheers,
Peter