Agile Energy Projects in the Marketplace

It has been a hectic couple of weeks, after the release of my first quarterly power bill. I’ve been on radio, TV, in print, and sprayed around the internet. Its a bit like the install day back in January, but obviously with a dollar figure attached.

Despite that, there is still a lot of people ready to step up and put the boot into Powerwall, and lithium storage in general. I will never fathom why these parties are against progress, so I don’t read into it too much.

BUT ENOUGH ABOUT THAT…

During that time the world rolled on, and it appears renewable energy, particularly solar hybrid, has been going from strength to strength. One tweet in particular caught my eye, from Noah Smith.

The Telegraph article linked by that tweet, written by Ambrose Evans-Pritchard, is an interesting discussion on battery storage as it affects the landscape. It is also a bit of a dig at the Hinkley Point nuclear project in England.

I wrote something previously on Nuclear Power, so without a re-hash I will reiterate: I AM NOT ANTI-NUCLEAR. However, I did point out there are significant financial hurdles to overcome in Australia. Leaving aside the social issues, that is.

Three paragraphs in the article from Evans-Pritchard got me thinking.

Perhaps the Hinkley project still made sense in 2013 before the collapse in global energy prices and before the latest leap forward in renewable technology. It is madness today.

The latest report by the National Audit Office shows that the estimated subsidy for these two reactors has already jumped from £6bn to near £30bn. Hinkley Point locks Britain into a strike price of £92.50 per megawatt hour – adjusted for inflation, already £97 – and that is guaranteed for 35 years.

That is double the current market price of electricity. The NAO’s figures show that solar will be nearer £60 per megawatt hour by 2025. Dong Energy has already agreed to an offshore wind contract in Holland at less than £75.

Those are some pretty compelling numbers, but the reasons why it got me thinking relate to my own work life.

A Short History Of Dwarves

I’ve been an IT guy for a living nearly 20 years now, working mainly in databases where I can help it. I’ve seen almost every tech acronym or buzzword put into practice, sometimes very poorly. Or for the sake of change.

One of the better periods was back in the day, when the technical stuff was held apart. I like the imagery that Neal Stephenson uses in Cryptonomicon – IT guys were like the Dwarves in Tolkein; working away in the dark, hammering out things of beauty like Rings of Power.

The company (Elves) would frolic up to the entrance of the forge, beseeching the Dwarves for a solution. The Dwarves would give a range of timelines and costs, and the Elves would pick one. We’d go into the forge, create what they wanted, and the land was content.

With advances in technology, and the hunger for globalisation, things needed to move faster. Thus, “Agile” was born as the new way to do things.

Dilbert official site "Agile" search - click for more...
Credit www.dilbert.com

Generally speaking, the move to Agile is positive from my point of view. It seeks to guide the Good Ship Project through the icebergs as each one appears, not assert a course from Day 1 and expect no issues with implementation at all.

As long as Agile is implemented the right way, it can do good things.

There is a caveat though, and the seed of this started with smart devices in my opinion. If we’re ever having a beer, talking shop, I’d pinpoint smart devices as disruptive in more than just a good way.

Now non-technical people see an awesome app for $1.99 and wonder why projects still cost millions. As a result, they demand more.

Agile has collided with this belief that speed of delivery, and convenience, is cheap. Non-technical people don’t necessarily understand the systems. They’re trying to tell the developer how to do their job down to the finest detail. That isn’t actually helpful.

Dear Managers: right now, there IT guys reading this, and nodding their heads. Maybe muttering. Likely, swear words and dark thoughts are being countenanced.

Agile Energy Projects

One thing that holds true of IT projects, energy infrastructure, and pretty much anything down to a backyard deck, is the Quality Triangle.

Time vs Cost vs Scope as it affects Quality

If you are going to implement or change the project in terms of finances, timeline, or scope/size, then you have to accept it will affect the quality of the outcome. Aiming for all three is purely theoretical, in my opinion.

As with the recent Census Fail incident in Australia, sometimes it doesn’t matter how many resources you throw at a project, or how long it runs. The excreta hits the rotary ventilator, and its time to put out fires.

Hinkley Point C is subject to some base requirements, but the main one is the generation of 3200 MWe from a nuclear reactor. Not the biggest in the world but still a mighty undertaking.

Once you’ve decided it will generate that much, you’ve set your course. A prescribed amount of effort, human resources, and other elements must go into it. Critically, the reactors will be of a certain size and type, and you’ll pay the capital cost of that regardless.

If you encounter cost overruns or other issues, generally speaking you just have to suck it up, as per the article:

… the estimated subsidy for these two reactors has already jumped from £6bn to near £30bn. Hinkley Point locks Britain into a strike price of £92.50 per megawatt hour – adjusted for inflation, already £97 – and that is guaranteed for 35 years.

In Australian terms, that is $160 / MWh, which is frankly ridiculous.

All of this points to the fault lines emerging in “baseload” power argument. Not only is “base” power a myth, but the agility of these big power generation units is practically nonexistent from conception through to decommission.

As Hinkley Point C, and Finland’s Olkiluoto construction debacles show, centralised nuclear power might be green, but it isn’t necessarily going to stand the test of time, economically.

Smart Advantage of Renewables

Technologies I have seen work, or worked with directly (like Reposit Power) show us that agility is the biggest factor in any tech marketplace today.

And let’s not kid ourselves: energy delivery is now a technology field. This is particularly true of renewable energy, which eschews the old school sledgehammer approach to power generation, in favour of smarts.

Smart use of power, smart direction of power, are going to be the big players moving forward. It starts with domestic applications, such as Tesla Powerwall, and smart management to deliver benefits for the home owner.

Beyond serving one household, it has the potential (and in some ways, the obligation), to serve the wider community.

This is achieved by using the battery as a trading platform. Benefits abound for the network willing to engage with customers, as I discussed in May. Reduced overall costs and waste benefit everyone in the longer term.

This move toward smarter storage also helps address the business sector. The power needs there are large, and despite being mainly during the day, will not going to tolerate the intermittent fluctuations of solar PV and wind.

Storage using batteries is one leg of the argument, across a various range of chemical makeups. Energy storage like pumped hydro can also assist deliver stable power on a larger scale. The big one for Australia should probably be molten salt reactors, particularly for South Australia, which has suffered issues recently.

Certain industries have scope for change today. Heavy transport, and transport in general, is already under the microscope in nations like Sweden, where they seek further reduction in carbon emissions.

Electric Vehicles take carbon off our roads and out of the manufacturing process through a simpler template of construction. If you don’t believe that, think about the amount of metal required to build a drive train for a petrol engine, versus an EV’s battery & motors setup.

How do we address the remaining heavy industry players, and areas outside domestic power supply that aren’t easily converted to renewable technologies?

Scale Advantage of Renewables

Critics of renewable energy sources often derisively quote land area required for building large-scale generation. Regardless of whether its wind, solar PV, pumped hydro, molten salt, or another method, a “farm” for renewable power will take space, that is true.

Solar Sunwerx 6 Florence Street BURWOOD VIC 3125
Nyngan Solar farm, Australia. Credit: Solar Sunwerx

Renewable energy projects are much simpler to implement from an engineering point of view, compared to a nuclear reactor. They are also more flexible.

A nuclear plant, once scoped, has very little opportunity for changing the Quality Triangle. It also isn’t going to get much more efficient if you delay implementation, because the technology is largely static.

Manufacturing issue with your solar PV arrays? Let’s just get less panels for now. They’ll be cheaper later on, or more efficient, anyway.

Dispute over one of your wind turbines? Fine: proceed with the rest of the farm until the outcome is known.

These are two examples (there are more) where the scalability of renewable energy creates a huge advantage. The unit size of a wind turbine, or a solar array, is in no way limiting for people who know how to implement them.

Concentrating Solar Power for an MSR (Molten Salt Reactor)

Pumped hydro and molten salt reactors are similar to traditional power stations, in that their capacity is roughly determined at time of construction. The key difference is they are primarily storage, over and above being generation.

They don’t need to be on all the time, only engaged when other resources are running low, or as demand spikes. This is another advantage over “baseload” coal or nuclear, which cannot uplift to address demand spiking.

Only gas-fired stations have this ability at the moment. The surging price for gas, as well as its status as a fossil fuel, renders it a short-term option at best.

The Paradigm Shift

You cannot simply build a traditional network and throw more and more renewables at it until you reach a very high number.

Coal in Australia has been built to over-capacity, resulting in wasted capital expenditure, and poorly managed outcomes. Witness the issues South Australia has at the moment, because of short-term thinking around renewable energy integration.

We need “smart” implementation of renewable energy projects. Flexibility must remain a core tenet of implementing this intelligence.

As Evans-Pritchard covers in his article, there are many storage options in development across the world right now. We’re in a period of real transition where more options will blow the marketplace right open.

This requires the right thinking, to engage renewable sources on a far larger scale, holding hands with storage options of all kinds. Markets will shift rapidly. Consumer needs, particularly in the developing world, will have no need, and no money, for sledgehammer tactics like “baseload” power.

Projects designed for even 30-year life cycles will find themselves at risk of rejection. It will be simply uneconomical to support such inflexible systems.

With the right people at the wheel, concerns over our energy needs, and the perceived shortcomings of renewable energy, needn’t be a concern.

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