Power shares

[Jantar]

The Aharoa Gas Storage, built by Contact, can store up to 18 PJ of gas. To put that in terms of electrical storage, that is the equivalent of 1800 GWH of electrical energy and cost just shy of $400 M. So at first glance it looks like a cheaper option than Onslow. But that is not renewable, and it cannot be used to buffer intermittent generation as easily. Where it is used it is still only in a ratio of 1:1, not 1:2, so 2400 MW of fast start gas fired plant would be needed to do the same job as Onslow.

It also uses gas to run the compressors to feed the gas into the field, and uses more gas to heat the gas coming out of the ground. To recover that 18 PJ of gas actually requires buying 27 PJ of gas off the market between compressing and re-heating. Thus gas from storage being used as generation has a much higher marginal cost than gas purchased directly from the well.

Add in the Opex for gas fired plant and it becomes quickly obvious why electricity prices spike up to the hundreds of dollars per MWh even when there is no overall shortage. Opex for CCGT plant like at Huntly or Stratford is very high, around $40 per MWh plus fuel cost, while Opex for hydro plant is around $2 to $3 per MWh. Hydro fuel is nil for normal hydro plant, but will have a cost at Onslow.

[Jaa]

The Ahuroa gas storage facility was not a financial success, one of many disasters for Contact's shareholders. They have been consistently the worst of the gentailers at capital expenditure for 25 years or more.

Meridian have been consistently the best, even buying and selling well in Aus several times.

[bull....]

That right there is the reason for beginning the discussion about Lake Onslow... It's basically the only renewable storage option suitable for long term storage.

will labour ever do it , all talk no action ( like most things) seems to be there way

[gains]

will labour ever do it , all talk no action ( like most things) seems to be there way

I won't disagree with you. I personally thought it was a distraction to keep people like us talking about the power industry rather than the fact labour hasn't released any new policies yet and the election is getting bloody close!

The real question is, who do we think would own and operate Onslow? Some others earlier mentioned Contact?

Personally I thought Genesis as it might be incentivised by the government, close huntly and you can have onslow but that's a shallow opinion from me.

[Jantar]

…...

Personally I thought Genesis as it might be incentivised by the government, close huntly and you can have onslow but that's a shallow opinion from me.

There is no reason why any of the major players couldn't own and operate Onslow.

Contact do have an advantage as they already have management, engineering, operations, and maintenance facilities in the area. They would need to employ 6 to 10 additional operations/maintenance staff to allow for the extra plant. Any other company would need to duplicate some management and engineering roles and would need a full complement of operations and maintenance staff, so perhaps 30 extra employees. That is not a lot, but would add around $2 M to wages bill each year.

[Snoopy]

There is no reason why any of the major players couldn't own and operate Onslow.

Contact do have an advantage as they already have management, engineering, operations, and maintenance facilities in the area. They would need to employ 6 to 10 additional operations/maintenance staff to allow for the extra plant. Any other company would need to duplicate some management and engineering roles and would need a full complement of operations and maintenance staff, so perhaps 30 extra employees. That is not a lot, but would add around $2 M to wages bill each year

It might make sense for Contact to run Onslow from an operational perspective. But what about from a market perspective? Onslow would be upstream of that part of the Waitaki catchment that includes Contact's Roxbourgh and Clyde dams. So with Contact as the owner, there would be an incentive to manipulate water flow from Onslow to maximise the earning ability of Roxbourgh and Clyde. Likewise if Meridian owned it, they could restrict water flow into the Waitaki catchment to maximise the earning power of their own dams like Benmore. Mercury would at least me a 'neutral' owner as they would be equally incentivised to upset the dam levels of both Meridian and Contact. Meanwhile Genesis could manipulate the Onslow economics to maxmise the value of their gas generation booster assets in the North Island. Can even Trustpower be trusted? Given all of this, I wonder if Transpower, that has to sort out the distribution of power if the regional supplies become unbalanced, is in fact the logical owner of Onslow?

SNOOPY

[Jantar]

It might make sense for Contact to run Onslow from an operational perspective. But what about from a market perspective? Onslow would be upstream of that part of the Waitaki catchment that includes Contact's Roxbourgh and Clyde dams. So with Contact as the owner, there would be an incentive to manipulate water flow from Onslow to maximise the earning ability of Roxbourgh and Clyde. Likewise if Meridian owned it, they could restrict water flow into the Waitaki catchment to maximise the earning power of their own dams like Benmore. Mercury would at least me a 'neutral' owner as they would be equally incentivised to upset the dam levels of both Meridian and Contact. Meanwhile Genesis could manipulate the Onslow economics to maxmise the value of their gas generation booster assets in the North Island. Given all of this, I wonder if Transpower, that has to sort out the distribution of power if the regional supplies become unbalanced, is in fact the logical owner of Onslow?

SNOOPY

Sorry Snoopy, I am struggling to understand what you mean by Onslow being "upstream of that part of the Waitaki catchment that includes Contact's Roxbourgh and Clyde dams".
If you mean hydrologically, then Onslow is downstream of Clyde, but upstream of Roxburgh, and is on the Clutha River, not the Waitaki River. If Meridian owned it they could not not use it to change the flow in the Waitaki River, but could, and should, use it to manipulate the amount of storage in Lake Pukaki. Onslow at full load would release 186 cumecs, and at full pumping would draw 150 cumecs. The mean flow of the Clutha River at that point is 530 cumecs.

If you mean electrically, then Onslow is in parallel with Roxburgh, but upstream of Clyde, Waitaki stations and Tekapo in North flow, or downstream of those in south flow, and any dispatch of generation is performed by Transpower. There is no advantage in being upstream electrically, as it is the generators that are downstream, i.e. closest to the load centres, that have the big advantage.

Transpower are prevented from owning any generation assets, as being the grid owner would automatically give them an advantage in managing constraints and nodal prices.

[Snoopy]

Hi Snoopy,
Just to clarify about gas generation
My understanding is that you have combined cycle and peakers.
Combined cycle being gas turbine plus steam utilising waste heat so 50% more efficient than the peakers.
The peakers however reach full efficiency in 10 minutes.

The Combined Cycle Power Generation unit utilises a heat exchanger to heat steam from the heated output of a gas turbine, the primary power generating mechanism in a CCPG unit. That 'waste heat' heated steam can then be used to power a steam turbine with what would other wise have been 'waste energy'. All this pre-supposes that the heat generated from the gas turbine is in fact wasted. There are some large industrial sites that need heat energy. So if you install a gas turbine without an associated steam turbine at such a site it can still be efficient from an overall energy perspective.

'Peakers' is not a description of power generation hardware. Any energy source that can be brought on steam quickly to fill a power hole in the grid can be described as a peaker. A hydro-dam and turbine is also a 'Peaker'. So the phrase 'Peaker' means something that can be brought onto the grid quickly, but is neutral on the technology used to achieve this effect. Anyone who has been on jet aircraft knows it doesn't take that long to fire the engines up. So a jet engine, which is really what these 'peaker' gas turbine plants are (i.e. a jet engine in a box) are pretty good at filling a hole in the power generation grid. Theoretically it would be possible to design a 'peaker' power station that is much more efficient than a stand alone jet engine. But that might negate the very real advantage that the typical peaker gas turbine today of being a 'capital light' project.

The older rankine units use a slightly different combined cycle and I would imagine using coal would take some time to operate efficiently.

The Rankine units use exactly the same combined cycle as the poster boy 'Unit 5', both utilising heat exchangers to recover output turbine energy to superheat steam. I think the difference is that the Rankine units were commissioned in the 1980s and use 1980s turbine technology. They can never be as efficient as an equivalent gas turbine designed 35 years later. I was slightly surprised to see from the Genesis website, https://www.genesisenergy.co.nz/assets, that the rankine units are used for base loan and peaking duties. Whether the heat recovery and associated steam turbines 'accessories' are operating with the Rankine units in peaker mode is something only the likes of Jantar could tell us.
You may be right, but I notice on t

The power companies seem to want to use more peakers and less combined cycle.
To me this may reflect a competitive bidding process rather than making the country more energy efficient.

I think it is power generating companies are keen to take advantage of high spot power prices. Not a preference for one technology over another.

In theory hydro could be increased for short periods for peak demand and combined cycle kept continuous generation during times of low inflow.

Quite right. This would be the more climate friendly way to go and is the driving force behind the Onslow project.

SNOOPY

[Snoopy]

Sorry Snoopy, I am struggling to understand what you mean by Onslow being "upstream of that part of the Waitaki catchment that includes Contact's Roxbourgh and Clyde dams".
If you mean hydrologically, then Onslow is downstream of Clyde, but upstream of Roxburgh, and is on the Clutha River, not the Waitaki River. If Meridian owned it they could not not use it to change the flow in the Waitaki River, but could, and should, use it to manipulate the amount of storage in Lake Pukaki. Onslow at full load would release 186 cumecs, and at full pumping would draw 150 cumecs. The mean flow of the Clutha River at that point is 530 cumecs.

If you mean electrically, then Onslow is in parallel with Roxburgh, but upstream of Clyde, Waitaki stations and Tekapo in North flow, or downstream of those in south flow, and any dispatch of generation is performed by Transpower. There is no advantage in being upstream electrically, as it is the generators that are downstream, i.e. closest to the load centres, that have the big advantage.

OK I have some of my deep south geography crossed - thanks for the corrections. The point I was trying to make, and so poorly articulated in my previous post, is that whatever catchment Onslow drains into it will affect the power generating stations that are on that same river catchment. It sounds dangerous to me to have the 'battery' of the nation under the control of just one of the power generators. There is room for manipulation of dam levels to favour the power generator owner that controls Onslow, whoever that owner of Qnslow turns out to be. And that 'dangerous risk' would also apply to an Onslow owner that had no previous direct interest in the catchment, but was nevertheless connected to the same electricity grid.

Transpower are prevented from owning any generation assets, as being the grid owner would automatically give them an advantage in managing constraints and nodal prices.

From a grand 'all of New Zealand' perspective don't we want the constraints managed and the nodal prices manipulated - downwards? If we can manage the constraints, doesn't that guard against overbuilding the distribution network and wasted sunk costs? Of course the law would have to be changed to allow Transpower to take ownership of Onslow. But if this is the best thing for New Zealand then the government could do it.

SNOOPY

[Jantar]

…... There is room for manipulation of dam levels to favour the power generator owner that controls Onslow, whoever that owner of Qnslow turns out to be. .. …..

SNOOPY

OK, I am starting to see your concerns. However I do not believe that manipulation of dam levels would be an issue. Onslow would draw from, and feed back into, the Roxburgh dam Roxburgh has very little storage available to it, only 163 cumec-days. Upstream is the Clyde power station, which is also a run-of river station. It has slightly more storage at 278 cumec days. But both of these stations also have minimum flows as resource consent conditions, 140 cumecs at Clyde and 250 cumecs at Roxburgh. The combination of this small amount of storage, uncontrolled inflows, and minimum outflows does not allow for any significant manipulation of lake levels.