“Base Load Power” a Convenient Myth for Fossil Fools
March 7, 2016
Last week, leading lights of the global fossil power industry gathered at a conference in Houston, Texas, for CERA, known in the sector as the “Davos of Energy”. They reportedly got the shock of their professional careers.
They had invited the most senior executives from the biggest network owner (Chine State Grid Corp) in the biggest energy market in the world (China). The organisers fully expected their Chinese guest to endorse the “all of the above” marketing pitch, which is underpinning the “keep coal” campaign.
No such luck. Despite prodding by leading oil industry commentator Daniel Yergin, the chairman of State Grid Liu Zhenya reportedly said the “fundamental solution was to accelerate clean energy, with the aim of replacing coal and oil.”
Gasp number one. And then to more stunned silence, he and State Grid’s R&D chief Huang Han dismissed coal’s claim to be an indispensable source of “base load” generation.
As the network operator builds out its clean power sources, they noted, coal-fired generators could only serve as “reserve power” to supplement renewables.
“The only hurdle to overcome is ‘mindset’,” Liu said. “There’s no technical challenge at all.”
Here, video from 2012. Amory Lovins of Rocky Mountain Institute states his perspective on the base load power myths, while another analyst argues a bearish case against solar/renewables. The last 3 years of history tend to support Lovins case.
The “base load” mindset, though, is a pretty big and powerful hurdle. Across the world it infests incumbent utilities, the coal and nuclear lobbies, conservative politicians, energy regulators, and many in mainstream media, who are clinging to the concept of “base load generation” as the last resort to try to ridicule wind, solar and other technologies.
In Australia, which has more coal generation as a percentage of its energy supply than any other developed country, this perpetuation of this idea has reached fever pitch, particularly with the imminent exit of the large coal-fired power station in South Australia.
But according to Tim Buckley, from the Institute of Energy Economics and Financial Analysis, the idea of “base load” generation as an essential part of the energy mix is becoming redundant, and turning into a myth dreamed up by the fossil fuel industry to protect its interests.
“It’s as dangerous as the marketing term of “clean coal” and the idea that coal is “good for humanity”,” Buckley says.
New data bears this out. In China, thermal power plant utilisation rates (capacity factors) declined from 56.2 per cent on average in 2014 to a record low of just 50.9 per cent in 2015.
“This highlights coal is not ‘base load’, even in China,” Buckley says. “It is the marginal source of supply. Coal-fired power plants aren’t designed to run only half the time, but that is what is happening in China, and increasingly that is occurring in India as well.”
Indeed, CLP, the Hong Kong-based owner of the Yallourn and Mt Piper coal-fired power stations in Australia, revealed this week that its “flagship” Jhajjar coal plant in India ran at a capacity factor of just 49.9 per cent in 2015.
In Australia, it was even worse. The 1,400MW Mt Piper power station near Lithgow in NSW operated at just 45 per cent of its capacity, even after its neighbouring Wallerawang coal plant had been shut down.
Other black coal generators have been similarly afflicted, so much so that the Northern power station in South Australia is to shut permanently in May.
Grid operators also understand this. The head of UK’s National Grid says that “centralised energy” will soon be a thing of the past. The Australian Energy Market Operator says that the exit of “base load” coal generation in South Australia should not impact reliability or security of supply.
It does mean that supply it is dependent on other factors, including a connector to the main grid, but also a “different way of doing things.” Culture, not technology, is the biggest challenge here.
A study by energy consultant Energeia suggests that wind energy will become the default “base load” generation in South Australia, and dispatchable power sources – which previously dominated the grid, the markets and the business models – will have to fill in the gaps left by wind and solar.
The study conducted on behalf of South Australia transmission network operator ElectraNet, and released in December, illustrated a range of scenarios that suggested there was no room for “base load” generation.
And it wasn’t needed. The gaps would be filled by flexible plant such as solar towers, or battery storage, or from gas – as long as it can compete with the new technologies.