Powering our future. The DC Link. Load growth GWh pa. NZ generation Bryan Leyland

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Powering our future Bryan Leyland MSc, DistFEngNZ, FIMechE, FIEE(rtd), MRSNZ Vital Statistics.. 7,000 MW peak 43,000 GWh pa DC Link 220 kv The DC Link By 1950 NI Hydro was running out NI coal was the MWD option Bill Latta s bold concept 1000 MW DC link Remaining hydro potential Hydro 3000 MW Develop SI Hydropower & Transmit to NI How to get it across the Cook Strait? HVDC?? 1952 Gotland 20 MW, 100kV 1962 Cook Strait 600 (1200) MW +/-250 kv Upgraded to 1400 MW Could we make such a bold decision now? Load growth 1930-2004 820 GWh pa 40,000 GWh NZ generation 1970-1998 40,000 GWh

Where our power comes from 978 MW of geothermal generates a lot more than 690 MW of gas! What our load looks like Fuel Dry years NZED power planning must survive a dry year without a shortage In a 1:20 dry hydro generation dropped by 3600 MW The old Meremere coal-fired station and the Huntly coal-fired station were built to provide extra generation in a dry year. With wind and solar added to the system, the dry year problem is even worse Transpower has pointed out that we are at risk of shortages in dry years in a few years No alternative to a coal stockpile! 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 Less wind in a dry year? NZ wind Capacity factor 2017 Long term average And then came the Electricity Reforms.. - 17/04/17 17/05/17 17/06/17 17/07/17 17/08/17 17/09/17 17/10/17 17/11/17 17/12/17 17/01/18

Before and after Before The Electricity Department and MOW had a monopoly on building lines and power stations (Bad) Both were over manned and under political control (Bad) Planned long term (Good) Two CEO s paid at Public service rates (Good) Mostly managed by engineers (Good) After Before and after... Monopoly replaced by ogliopoly (Bad) No long term planning (Bad) 6 highly paid CEO s and management (Bad) 10%+ of staff are traders (Bad) Regulated by the EA which is under the Minister s thumb (Bad) High and unpredictable prices (Bad) Asset values racked up regularly (Bad) The reforms were based on.. Power prices 1993-2017 These (dodgy) assumptions: electricity is a commodity like any other supply and demand will balance at a price that is politically acceptable five generators acting in their selfish interests = the public good They ignored the need for reliable peak capacity and a supply of reserve energy for dry years We once had some of the cheapest power in the world.. New Zealand Wind and solar industries Exist only because of large direct and indirect subsidies Subsidies exist because governments believe that they are a cheap and effective way of reducing man-made CO2 they aren t When the subsidies are abandoned, development stops Can be useful when conventional options are expensive e.g. supplying small loads in isolated situations 17

Man-made global warming is not supported by the evidence The Royal Society of New Zealand has failed to produce evidence supporting this hypothesis yet it continues to promote climate change To my knowledge, the evidence does not exist It could be the biggest hoax in the history of the world There is nothing abnormal or unusual about the temperature record since 1900. There is convincing evidence that global cooling could soon start. Man-made global warming is not supported by the evidence The Royal Society of New Zealand has failed to produce evidence supporting this hypothesis yet it continues to promote climate change To my knowledge, the evidence does not exist It could be the biggest hoax in the history of the world There is nothing abnormal or unusual about the temperature record since 1900. There is convincing evidence that global cooling could soon start. Man-made global warming is not supported by the evidence The Royal Society of New Zealand has failed to produce evidence supporting this hypothesis yet it continues to promote climate change To my knowledge, the evidence does not exist It could be the biggest hoax in the history of the world There is nothing abnormal or unusual about the temperature record since 1900. There is convincing evidence that global cooling could soon start. New renewables cost - $2,500 billion! Capital $2,000 bn, Subsidies ~$500 bn ($88 bn/yr) Capital cost $3000/kW Capacity factor 25% Effective cost $9000/kW Annual capital $billion Wind and solar make a trivial contribution Storage the Achilles Heel of RE Primary energy percentages: Oil - 33% Gas - 28% Coal - 24% Nuclear - 4.5% Hydro - 7% Wind, Solar etc - 3% 2009 data Doubled since then Large scale wind, wave and marine power cannot exist without long term, low cost, efficient, energy storage energy generated when the wind is blowing and the sun is shining must be stored so that it can be used when it is needed No economic technology exists and it is not even on the horizon all we have is expensive long term pumped storage and very expensive batteries So we use inefficient open cycle gas turbines and diesels Producing lots of CO2 21

Hydro 1 MWh STORAGE Coal 6 MWh 5c/kWh ~2 7 c/kwh o clock would you like Nuclear fuel 2 MWh Hydro 1 MWh ~2 c/kwh STORAGE Coal 6 MWh 5c/kWh 7 o clock would you like Nuclear fuel 2 MWh 1 MWh 30c/kWh 0.5 c/kwh Storage sizes and cost of storing 1 kwh 6 drums Oil Batteries 1MWh ~50 c/kwh 1000 elect water heaters 1MWh 0c/kWh ~$2million 22 1 MWh 30c/kWh 0.5 c/kwh Storage sizes and cost of storing 1 kwh 6 drums Oil Batteries 1MWh ~50 c/kwh 1000 elect water heaters 1MWh 0c/kWh ~$2million 22 Wind power: Technology and costs Technology is stable no significant technological improvements in the last 20 years variable speed operation becoming more common as time goes on, unit size increases with a small decrease in costs/kw O&M costs are high due to problems with blades, bearings, gearboxes and generators Costs are dropping only slowly currently ~$NZ 2100/kW - equivalent to Geothermal at $6500/kW 23 Cost of wind power International Renewable Energy Agency Capital Cost $NZ2100/kW Energy Cost 8.2 cents at 35% capacity factor Operation and Maintenance ~2 c/kwh increases as time goes on Exclude subsidies and include reserve plant etc Energy cost Onshore 15.1 c/kwh Offshore 19.2 c/kwh Combined cycle GT ~ $NZ 1400/kW and ~7cents/kWh 24 Aussie wind farms April 12 Output over peak ~75 MW - in spite of being widely spread! 100% 750 MW Installed capacity 2500 MW 75 MW 25 Status Expensive and intermittent Relies on a belief that it is an effective and cheap method of reducing man-made CO2 it isn t Costs not decreasing Serious O&M problems Not a good investment 26

Solar power Olmedilla Solar Voltaic Farm Cost is ~$2000/kW - at 10-20% capacity factor ~ $3000/kW for rooftop installations Maximum power in the middle of summer none during most NZ system peaks Rapid drop in output when a cloud crosses the sun Solar companies are going broke Solyndra defaulted on a $500 m loan Suntech - bankrupt owing $1.6 billion SunEdison, the world s largest green energy company, broke - owes $11 billion 27 60 MW for $US530 million $US8800/kW ~87.5 GWh pa ~60c/kWh Loses 60% output on a cloudy day and 100% every night Subsidy: ~6 times market price for 25 years! A lot of glass to clean! Spain 28 Wind, solar and wave power The Harbour Bridge lighting - the promise These technologies exist only because governments have chosen to subsidise them at the expense of consumers and taxpayers Because they are intermittent, unpredictable and have a low capacity factor they load considerable additional costs on to the power system paid for by consumers With present technologies, they have no prospect of competing with conventional generation on an equal basis. The reality Status Expensive and intermittent Costs not decreasing Share prices have collapsed Not a good investment Transpower has concluded that grid connected batteries are not economic Workers needed to produce the same amount of electricity: coal - 1; natural gas - 2; wind - 12; solar -79 32

Wave power 750 kw Pelamis: Average output 100 kw Weight 1300t - 700t of machinery +600t of sand Company went bust in 2014 Sea Wave A new concept Under development Great potential At $5000/t, cost is ~$9000/kW 33 34 Status Expensive Technically difficult Costs are high Sea Wave could be a breakthrough watch this space.. 35 Why wind and solar power? If the objective is reducing CO2 nuclear is far better and cheaper or converting from coal to gas low cost power CCGT and coal wins every time But if the objective is transferring wealth from the poor to the rich Subsidised wind and solar will do it! 36 Nuclear power Nuclear power The safest and most environmentally friendly form of power generation Uranium resources proven:~80 years supply expected:~250 years supply 1000+ years with breeder reactors! Energy from thorium 3 times as abundant as uranium ~750 years supply The safest and most environmentally friendly form of power generation Uranium resources proven:~80 years supply Nuclear power could supply expected:~250 years supply 1000+ all years the with energy breeder reactors! the world needs for more than 500 3 times as abundant years as uranium ~750 years supply Energy from thorium 37 37

Scenarios for the future Rational scenario Continue to build hydro and geothermal Stop building uneconomic wind and solar power Keep nuclear power under review Set up a market for dry year reserve energy Set up a market for those who: provide reliable power over peak demand periods manage demand over peak demand periods Outcome: a reliable and economic supply Scenarios for the future.. Likely scenario Continue with geothermal development Encourage/subsidise the construction of wind and solar power Avoid hydropower Shut down Huntly Run down gas supplies Outcome: High prices and frequent shortages Loss of energy intensive industries such as wood processing Extreme difficulty in matching the fluctuations of wind and solar power no gas for open cycle gas turbines frequent under frequency load shedding Questions Type a quote here. Johnny Appleseed